Valley View Hospital faces somewhat seasonal demand. Patients defer elective surgery in the summer and in the holiday season at the end of the year. As a result, the forecast of patient days of demand is as follows (a patient day is one patient staying for one day in the hospital):
The hospital uses regular nurses, part-time nurses (when the hospital can get them), and contract nurses (who are not employees). Contract nurses work a number of hours which varies depending on their contract established with the hospital.
Regular nurses are paid a sum of $8000 per quarter for 60 days of work; part-time nurses are paid $3500 per quarter for 30 days of work. Contract nurses get an average of $9000 per quarter for 60 days of work. It costs $1000 to hire or lay off any of these three types of nurses.
Suppose that regular nurses are set at a level of 800 nurses for the year. Each regular nurse works the equivalent of 60 days per quarter. The remainder of the demand is made up by 50 percent part-time and 50 percent contract nurses on a quarter-by-quarter basis. What is the cost of this plan starting at the beginning of spring with a level of 800 regular nurses, 200 part-time nurses, and 200 contract nurses? Assume it takes 0.8 nurse day to provide around-the-clock care for each patient day.

  • CreatedSeptember 20, 2015
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