Posted: September 17th, 2017
Hospital Expansion Problem
Mt. Sinai Hospital in New Orleans is a large, private, 600-bed facility , complete with
laboratories, operating rooms, and x-ray equipment. In seeking to increase revenues ,
Mt. Sinai’s administration has decided to make a 90-bed addition on a portion of
adjacent land currently used for staff parking. The administrators feel that the labs,
operating rooms, and x-ray department are not being fully utilized at present and do not
need to be expanded to handle additional patients. The addition of 90 beds, however,
involves deciding how many beds should be allocated to the medical staff for medical
patients and how many to surgical staff for surgical patients.
The hospital’s accounting and medical records department have provided the following
pertinent information. The average hospital stay for a medical patient is 8 days, and the
average medical patient generates $2280 in revenues. The average surgical patient is in
the hospital 5 days and receives $1515 bill. The laboratory is capable of handling 15000
tests per year more than it was handling. The average medical patient requires 3.1 lab
tests and the average surgical patient takes 2.6 lab tests. Furthermore, the average
medical patient uses one x-ray whereas the average surgical patient requires two x-rays.
If the hospital was expanded by 90 beds, the x-ray department could handle up to 7000
x-rays without significant additional cost. Finally the administration estimates that up to
2800 operations could be performed in existing operating room facilities. Medical
patients, of course, do not require surgery, whereas each surgical patient generally has
one surgery performed. The administrators’ objective is maximize the total revenue of
Prepare a written report to the CEO of Mt. Sinai Hospital on the hospital’s expansion.
Round off your answers to the nearest integer. The format of the results is important.
The CEO is a busy person and wants to be able to find your optimal solution quickly in
your report. Your report needs to cover all the areas given in the following questions:
1. How many medical beds and how many surgical beds should be added to maximize
2. Determine the respective number of medical patients and surgical patients per year.
A1. Are there any empty beds with this optimal solution? If so, how any empty beds are
A2. Discuss the effect of acquiring more beds if needed.
B1. Are the laboratories being used to their full capacity?
B2.Discuss the possibility of performing more lab tests per year. If so, how many more?
B3. Critically analyse the effect of more lab space if needed.
C1. Is the x-ray facility being used to its maximum?
C2. Discuss the possibility of performing more x-rays per year. If so, how many more?
C3. Critically analyse the impact of acquiring more x-ray facilities if needed.
D1. Is the operating room being used to its full capacity?
D2. Discuss the possibility of performing more operations per year. If so, how many
D3. Critically analyse the impact of acquiring more operating room facilities if needed.
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