Group #8 Assignment #1: Shouldice Hospital case
1. How does the hospital's operations strategy support its business strategy? 2. How well is the hospital currently utilizing its beds? 3. Evaluate the effects of the following two alternatives on the utilization of the bed capacity. a) a. Adding operations on Saturday (assuming that 30 operations would still be performed each day). b) b. Increasing the number of beds by 50 percent (assuming that the hospital would increase the number of operations performed each day and perform operations five days per week with the same number of operations per day). 4. What is your recommendation to the hospital (consider the two options above and the option of no change on capacity)?
Shouldice hospital's operations strategy supports its business strategy in many ways. The hospital is widely known for hernia repair and actually ONLY performs this one operation at its hospital. The business strategy for Shouldice is to be the “best hernia repair” hospital and its operation strategy helps to carry out this business strategy. The case discusses in detail some of the ways the service delivery system contributes to its business strategy success (for ex: only accepting patients with uncomplicated hernias etc...). Shouldice has done an excellent job of utilizing the operations systems to support the business strategy. After analyzing the data presented on exhibit 4.7 it is evident that Shouldice Hospital is currently utilizing its beds in a reasonably efficient and effective manner. This conclusion can be adequately drawn after using the capacity utilization rate (capacity used divided by the best operating level) to show how close to its best operating level Shouldice Hospital is operating. The best operating level is the capacity for which the process was designed, and is the volume of output at which unit cost is minimized. The best operating level remains constant on a daily basis throughout the course...
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