Sources must come from the text Title: Operations and Supply Chain Management: The Core? Authors: Robert Jacobs and Richard

1.    Chapter 3: Objective Question number 6 (page 81). (5 Points)

6. The following tabulations are actual sales of units for six months and a starting  forecast in January. 

a. Calculate forecasts for the remaining five months using simple exponential  smoothing with = 0.2. 

b. Calculate MAD for the forecasts.  ACTUAL FORECAST  January  February  March  April  May  June  100  94  106  80  68  94  80

2.    Chapter 4: Case Shouldice Hospital A Cut Above (page 111). Answer all 4 questions in the textbook. Use this Excel Template (Links to an external site.). (20 points)

Shouldice Hospital, the house that hernias built, is a converted  country estate which gives the hospital a country club appeal.  A quote from American Medical News  Shouldice Hospital in Canada is widely known for one  thinghernia repair! In fact, that is the only operation it performs, and it performs a great many of them. Over the past  two decades this small 90-bed hospital has averaged 7,000  operations annually. Last year, it had a record year and performed nearly 7,500 operations. Patients ties to Shouldice  do not end when they leave the hospital. Every year, the gala  Hernia Reunion dinner (with complimentary hernia inspection) draws in over 1,000 former patients, some of whom  have been attending the event for over 30 years.  A number of notable features in Shouldices service delivery system contribute to its success: (1) Shouldice accepts  only patients with uncomplicated external hernias, and uses  a superior technique developed for this type of hernia by Dr.  Shouldice during World War II. (2) Patients are subject to  early ambulation, which promotes healing. (Patients literally walk off the operating table and engage in light exercise  throughout their stay, which lasts only three days.) (3) Its  country club atmosphere, gregarious nursing staff, and builtin socializing make a surprisingly pleasant experience out  of an inherently unpleasant medical problem. Regular times  are set aside for tea, cookies, and socializing. All patients are paired up with a roommate with a similar background and  interests.

The Production System  The medical facilities at Shouldice consist of five operating  rooms, a patient recovery room, a laboratory, and six examination rooms. Shouldice performs, on average, 150 operations per week, with patients generally staying at the hospital  for three days. Although operations are performed only five  days a week, the remainder of the hospital is in operation  continuously to attend to recovering patients.  An operation at Shouldice Hospital is performed by one  of the 12 full-time surgeons assisted by one of seven parttime assistant surgeons. Surgeons generally take about one  hour to prepare for and perform each hernia operation, and  they operate on four patients per day. The surgeons day ends  at 4 P.M., although they can expect to be on call every 14th  night and every 10th weekend.  The Shouldice Experience  Each patient undergoes a screening exam prior to setting a  date for his or her operation. Patients in the Toronto area are  encouraged to walk in for the diagnosis. Examinations are  done between 9 A.M. and 3:30 P.M. Monday through Friday, and  between 10 A.M. and 2 P.M. on Saturday. Out-of-town patients  are mailed a medical information questionnaire (also available  over the Internet), which is used for the diagnosis. A small  percentage of the patients who are overweight or otherwise  represent an undue medical risk are refused treatment. The  remaining patients receive confirmation cards with the scheduled dates for their operations. A patients folder is transferred  to the reception desk once an arrival date is confirmed.  Patients arrive at the clinic between 1 and 3 P.M. the day  before their surgery. After a short wait, they receive a brief  preoperative examination. They are then sent to an admissions clerk to complete any necessary paperwork. Patients  are next directed to one of the two nurses stations for blood  and urine tests and then are shown to their rooms. They  spend the remaining time before orientation getting settled  and acquainting themselves with their roommates.  Orientation begins at 5 P.M., followed by dinner in the  common dining room. Later in the evening, at 9 P.M., patients  gather in the lounge area for tea and cookies. Here, new  patients can talk with patients who have already had their  surgery. Bedtime is between 9:30 and 10 P.M.  On the day of the operation, patients with early operations are awakened at 5:30 A.M. for preoperative sedation. The  first operations begin at 7:30 A.M. Shortly before an operation  starts, the patient is administered a local anesthetic, leaving  him or her alert and fully aware of the proceedings. At the  conclusion of the operation, the patient is invited to walk  from the operating table to a nearby wheelchair, which is  waiting to return the patient to his or her room. After a brief  period of rest, the patient is encouraged to get up and start  exercising. By 9 P.M. that day, he or she is in the lounge having cookies and tea and talking with new, incoming patients.  The skin clips holding the incision together are loosened, and  some even removed, the next day. The remainder are removed  the following morning just before the patient is discharged.  When Shouldice Hospital started, the average hospital  stay for hernia surgery was three weeks. Today, many institutions push same day surgery for a variety of reasons.  Shouldice Hospital firmly believes that this is not in the  best interests of patients and is committed to its three-day  process. Shouldices postoperative rehabilitation program is  designed to enable the patient to resume normal activities  with minimal interruption and discomfort. Shouldice patients  frequently return to work in a few days; the average total time  off is eight days.  It is interesting to note that approximately 1 out of every  100 Shouldice patients is a medical doctor.  Future Plans  The management of Shouldice is thinking of expanding the  hospitals capacity to serve considerable unsatisfied demand.  To this effect, the vice president is seriously considering two  options. The first involves adding one more day of operations  (Saturday) to the existing five-day schedule, which would  increase capacity by 20 percent. The second option is to add  another floor of rooms to the hospital, increasing the number  of beds by 50 percent. This would require more aggressive  scheduling of the operating rooms.  The administrator of the hospital, however, is concerned  about maintaining control over the quality of the service  delivered. He thinks the facility is already getting very  good utilization. The doctors and the staff are happy with  their jobs, and the patients are satisfied with the service.  According to him, further expansion of capacity might make  it hard to maintain the same kind of working relationships  and attitudes. 

Questions Exhibit 4.7 is a room-occupancy table for the existing system.  Each row in the table follows the patients who checked in on a given day. The columns indicate the number of patients in  the hospital on a given day. For example, the first row of the table shows that 30 people checked in on Monday and were in the hospital for Monday, Tuesday, and Wednesday. By summing the columns of the table for Wednesday, we see that  there are 90 patients staying in the hospital that day. 

1. How well is the hospital currently utilizing its beds? 

2. Develop a similar table to show the effects of adding  operations on Saturday. (Assume that 30 operations  would still be performed each day.) How would this  affect the utilization of the bed capacity? Is this capacity sufficient for the additional patients? 

3. Now look at the effect of increasing the number of beds  by 50 percent. How many operations could the hospital  perform per day before running out of bed capacity? (Assume operations are performed five days per week,  with the same number performed on each day.) How  well would the new resources be utilized relative to the  current operation? Could the hospital really perform  this many operations? Why? (Hint: Look at the capacity of the 12 surgeons and the five operating rooms.) 

4. Although financial data are sketchy, an estimate from  a construction company indicates that adding bed  capacity would cost about $100,000 per bed. In addition, the rate charged for the hernia surgery varies  between about $900 and $2,000 (U.S. dollars), with an  average rate of $1,300 per operation. The surgeons are  paid a flat $600 per operation. Due to all the uncertainties in government health care legislation, Shouldice  would like to justify any expansion within a five-year  time period.