“Shouldice Hospital, the house that hernias built, is a converted country estate which gives the hospital ‘a country club’ appeal.”

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?

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 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.