INSTRUCTIONS:

1. Read and study again Supplemental chapter 7 on Capacity planning, particularly Figure S7.6 and the discussion.
2. Plot the demand on a graph.
3. Conduct some research to understand the needs and operations of Arnold Palmer Hospital. Present and discuss these needs and operations.

Discussion questions (REQUIRED)

1. What kind of major changes could take place in Arnold Palmer Hospitals demand forecast that would leave the hospital with an underutilized facility (namely, what are the risks connected with this capacity decision?). Based on your research, how likely will these changes occur? What are the trends over time for at least two of these variables? Plot them and analyze the trend.
2. Do a regression analysis for each of the two factors affecting the demand against the demand of the hospital. Make some analysis of these two regression analysis and how it affects the hospitals decision to add capacity.
3. What are the factors affecting the adding of capacity to the hospital? Can the hospital actually match the demand? How should the hospital manage these factors?
4. What other factors should the hospital consider in matching the demand? Discuss each.
5. What are your learnings and insights from the case?

CASE STUDY Capacity Planning at Arnold Palmer Hospital Video Case Since opening day, Arnold Palmer Hospital has experienced 281 beds and a capacity for 6,500 births per year, the hospital an explosive growth in demand for its services. One of only six steadily approached and then passed 10,000 births. Looking at hospitals in the US. to specialire in health care for women and Table S7A, Executive Director Kathy Swanson know an expan children, Arnold Palmer Hospital has cared for over 1,500,000 sion was necessary patients who came to the Orlando facility from all 50 states and With continuing population growth in its market area serving more than 100 other countries. With patient satisfaction scores 18 central Florida counties, Arnold Palmer Hospital was deliver in the top 10% of US hospitals surveyed (over 99% of patients ing the equivalent of a kindergarten class of babies every day and would recommend the hospital to others), one of Arnold Palmerstill not meeting demand. Supported with substantial additional Hospital's main focuses is delivery of babies. Originally built with demographic analysis, the hospital was ready to move ahead with a capacity expansion plan and a new Il-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 $100 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. TABLE SZA YEAR 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 Births at Arnold Palmer Hospital BIRTHS 6.144 6.230 6.432 6.950 7.377 8.655 9.536 9.825 10.253 10.555 12.316 13.070 14,028 14.241 13,050 12.571 12.978 13.529 13.576 13.994