Profit Centers: Hospitals Suburban General Hospital owns and operates several communityhospitals in North Carolina. One of its hospitals, Cordona Community Hospital, is a not-for-profitinstitution that has not met its financial targets in the past several years because of decreasing volume.It has been losing market share largely because of the entrance of a new competitor, JeffersonMemorial Hospital. Jefferson has successfully promoted itself as the premier provider of qualitycare; its slogan is “Patients Come First.” To compete with Jefferson, Cordona has developed a new[LO 18-3][LO 18-3][LO 18-3]Final PDF to printerChapter 18 Strategic Performance Measurement: Cost Centers, Profit Centers, and the Balanced Scorecard 821blo17029_ch18_775-825.indd 821 02/19/18 09:10 AMdepartment, guest services, to improve patient relations and overall customer service. Guest servicespersonnel will be positioned throughout the hospital and at major entrances to help patients andtheir families get where they are going. Guest services will also be visible in the waiting rooms ofhigh-volume areas such as cardiovascular services and women’s services to help guide the patientsthroughout their visit. Cordona’s management is wrestling with how to charge guest services to thevarious profit centers in the hospital.Required What are some different ways to allocate the costs of guest services, and what would be theeffect of each on the behavior of the managers of the different profit centers?
Critical Path Method
The critical path is the longest succession of tasks that has to be successfully completed to conclude a project entirely. The tasks involved in the sequence are called critical activities, as any task getting delayed will result in the whole project getting delayed. To determine the time duration of a project, the critical path has to be identified. The critical path method or CPM is used by project managers to evaluate the least amount of time required to finish each task with the least amount of delay.
Cost Analysis
The entire idea of cost of production or definition of production cost is applied corresponding or we can say that it is related to investment or money cost. Money cost or investment refers to any money expenditure which the firm or supplier or producer undertakes in purchasing or hiring factor of production or factor services.
Inventory Management
Inventory management is the process or system of handling all the goods that an organization owns. In simpler terms, inventory management deals with how a company orders, stores, and uses its goods.
Project Management
Project Management is all about management and optimum utilization of the resources in the best possible manner to develop the software as per the requirement of the client. Here the Project refers to the development of software to meet the end objective of the client by providing the required product or service within a specified Period of time and ensuring high quality. This can be done by managing all the available resources. In short, it can be defined as an application of knowledge, skills, tools, and techniques to meet the objective of the Project. It is the duty of a Project Manager to achieve the objective of the Project as per the specifications given by the client.
Profit Centers: Hospitals Suburban General Hospital owns and operates several community
hospitals in North Carolina. One of its hospitals, Cordona Community Hospital, is a not-for-profit
institution that has not met its financial targets in the past several years because of decreasing volume.
It has been losing market share largely because of the entrance of a new competitor, Jefferson
Memorial Hospital. Jefferson has successfully promoted itself as the premier provider of quality
care; its slogan is “Patients Come First.” To compete with Jefferson, Cordona has developed a new
[LO 18-3]
[LO 18-3]
[LO 18-3]
Final PDF to printer
Chapter 18 Strategic Performance Measurement: Cost Centers, Profit Centers, and the Balanced Scorecard 821
blo17029_ch18_775-825.indd 821 02/19/18 09:10 AM
department, guest services, to improve patient relations and overall customer service. Guest services
personnel will be positioned throughout the hospital and at major entrances to help patients and
their families get where they are going. Guest services will also be visible in the waiting rooms of
high-volume areas such as cardiovascular services and women’s services to help guide the patients
throughout their visit. Cordona’s management is wrestling with how to charge guest services to the
various profit centers in the hospital.
Required What are some different ways to allocate the costs of guest services, and what would be the
effect of each on the behavior of the managers of the different profit centers?
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