Concept explainers
a capacity expansion plan and a new 11-story hospital building across the street from the existing facility.
Thirty-five planning teams were established to study such issues as (1) specific forecasts. (2) services that would transfer to the new facility. (3) services that would remain in the existing facility. (4) staffing needs. (5) capital equipment. (6) pro forma accounting data, and (7) regulatory- requirements. Ultimately, Arnold Palmer Hospital was ready to move ahead with a budget of S100 million and a commitment to an additional 150 beds. But given the growth of the central Florida region. Swanson decided to expand the hospital in stages: the top two floors would be empty interiors ("shell”) to be completed at a later date, and the fourth-floor operating room could be doubled in size when needed. "With the new facility in place, we are now able to handle up to 16,000 births per year." says Swanson.
Discussion Questions*
1. Given the capacity planning discussion m the text (see Figure S7.6), what approach it being taken by Arnold Palaver Hospital toward matching capacity to demand?
2. What kind of major changes could take place in Arnold Palaver Hospitals demand
3. Use regression analysis to forecast the point at which Swanson needs to "build out" the top two floors of the new building, namely, when demand will exceed 16,000 births
*You may wish to view the video that accompanies the case before addressing these questions.
TABLE S7.4 Births at Arnold Palmer Hospital
YEAR | BIRTHS |
1995 | 6,144 |
1996 | 6,230 |
1997 | 6,432 |
1998 | 6,950 |
1999 | 7,377 |
2000 | 8,655 |
2001 | 9,536 |
2002 | 9,825 |
2003 | 10,253 |
2004 | 10,555 |
2005 | 12,316 |
2006 | 13,070 |
2007 | 14,028 |
2008 | 14,241 |
2009 | 13,050 |
2010 | 12,571 |
2011 | 12,978 |
2012 | 13,529 |
2013 | 13,576 |
2014 | 13,994 |
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