Part 3: Decision Analysis (30 marks) Students should select only one of the following questions (choose either question 3.1, or 3.2) Part 3 General Info: As part of a widerimprovement initiative,the hospital manager is considering how the hospitals blood bank service can be made more efficient and more effective. At present, the main blood bank, where donated blood is stored, is at a large regional hospital about 80km away. The local hospital has only a small blood bank facility where typically only a few days supply of blood can be safely stored. The regional hospital routinely supplies blood on an anticipated or forecast basis and these stocks are replenished every few days or, in the event of a stock shortage at the local hospital, can be shipped through at a few hours notice (although at considerable cost). The hospital manager is reviewing a number of options and has heard (vaguely) about the use of multi-criteria methods. She has asked you to develop an outline multi-criteria model to help her reach a decision between the options. The options under consideration are: Option A: continue the existing system. In one sense this would be the easiest option. However, it also carries some risks as the hospital occasionally experiences times when it runs out of stocks of certain blood types and emergency supplies have to be sent across from the regional hospital. The cost of this is high (because of the specialist transportation needed) contributing to budget overspend and there are also clinical risks for patients. There have also been occasions in some winters where emergency supplies have not been able to be sent because of severe weather conditions. Option B: expand the blood bank at the local hospital to allow it to carry its own stock requirements in full. The local blood bank would then be effectively independent which would contribute to minimising risk to patients of blood supply shortage. However, the capital cost of this would be high (roughly estimated at about 0.75 million) and in the current economic climate might be difficult to obtain. Once built the hospital would also incur higher annual running costs (again roughly estimated at around 175,000 per year). Option C: improve the local hospitals Management Information System (MIS) and stock control system (SCS). At present the local hospital does little to try to predict blood use requirements or to manage its blood stocks effectively. This option would focus on two things. First, better analysis and forecasting of blood use requirements in the hospital linked to the scheduling of patient treatments and surgical operations. It is felt that this would enable the hospital to better and more accurately predict the blood it requires. Secondly, investing in an up-to-date stock control system so that blood supplies are more effectively tracked and monitored to reduce wastage, stock levels and associated costs. Most of the effort under this option would go into the development of better IT/IS systems. Anticipated development costs are around 100,000 with ongoing costs on an annual basis of around 50,000. Question 3.1 3.1 Info: Additional information on the improvement options is as follows: Option B: Senior medical staff might be unhappy at the additional costs associated with this option and have commented that the money would be better spent employing more doctors and nurses. Option C: The exact tangible benefits from this are very difficult to quantify although the manager thinks that wastage will be reduced. ASDM Assignment 12 3.1 Task: Which of the improvement options (A, B or C) is preferred, when multiple criteria are used to rank the options, and multiple stakeholder perspectives are considered. Identify at least three criteria/attributes which can be used to rank the three options. Consider the perspectives of at least three potential stakeholder groups for this problem and identify conflicting interests. Use appropriate software to analyse the problem and recommend a course of action. Assume values for any data that you do not have, and briefly explain your reasoning for the values that you use. Question 3.2 3.2 Info: You have been given access to an expert in the hospital on their current blodd transfusion services. The expert has been able to provide some more detailed data on the improvement options, but for some pieces of information, the expert is unsure. The additional information on the improvement options is as follows: Option A: under this option there is a 10% chance that the hospital has insufficient stock per patient. Specialist transportation of emergency supplies has an average cost of 5,000. In 80% of cases, this arrives within 3 hours and on average there is no detriment to care. Of the remaining cases, 75% of the time emergency supplies arrive between 3 and 6 hours after requested, and the potential delay to treatment incurs an additional expected cost of 20,000 due to lasting health conditions. For the remaining cases, there is a substantial risk to the patient. If the emergency supply can be delivered in time, the potential delay to treatment incurs an additional expected cost of 100,000. However, in 5% of cases, the emergency supplies do not reach the hospital in time and result in a fatality. This cost placed on this outcome is 1.83 million. Option B: there are three options for the expansion noted as small, medium and large. The costs described above refer to the medium expansion (0.75 million for construction, and 175,000 per anum for maintenance). If the medium expansion is in place, the expert predicts that the increased storage capacity would reduce the likelihood of insufficient stock to 5%. The expert does not have data on the small or large expansions. Option C: under this option, the expert predicts that improved analysis and management would of blood supplies and demand would reduce the likelihood of insufficient stock to 7%. 3.2 Task: Which of the improvement options has the lowest expected value over one year? Over 5 years? Over 10 years? Assume values for any data that you do not have and explain your reasoning for the values that you use.