Assignment 2: Case Study

You work for a marketing department in a hospital within a suburban location of a large metropolitan area. Though it neighbors million-dollar homes, the hospital’s mission includes providing care to underserved and indigent populations in the area.

A new primary care physician moved into the area and approached your hospital to partner with her as she begins a new practice in the community. Because the administration is always anxious to welcome new practitioners to the hospital, you agree to meet with the physician. During the meeting, the physician explains that she wants to establish the first concierge medical practice in the community. The physician plans to attract around 100 families to her practice, and she plans to charge from $300 to $1,000 per month, depending on the size of the family unit. (Note: A goal of 100 families may not be realistic; however, the number makes for easier calculations.)

The patients who join the concierge practice will receive access to the physician’s services 24 hours a day, 7 days a week, at an office located near the hospital. Families will receive preventive care services, and the physician will design wellness programs to encourage healthy lifestyles for her patients. The physician will use the hospital for all emergent care, day surgeries, rehabilitation, and in-patient care. The physician also plans to use nutritionists and the hospital’s fitness center facilities.

1. Discuss some of the goods or services that could be highlighted in a marketing campaign that involves a concierge practice of medicine.
2. What advantages do you think a concierge practice of medicine might contribute to the hospital’s offerings of products to the community?
3. Discuss some of the issues and challenges that may arise from the hospital sponsoring a concierge practice of medicine.

Management Science Problems

Module Problems

Complete the following problems and submit the results in either a Microsoft Word document or a Microsoft Excel spreadsheet. If you choose to use an Excel spreadsheet, place each problem on a separate sheet and label the tab with problem number. Save your document with a descriptive file name, including the assignment and your name.

5-1       The Outdoor Furniture Corporation manufactures two products, benches and picnic tables, for use in yards and parks.  The firm has two main resources:  its carpenters (labor force) and a supply of redwood for use in the furniture.  During the next production cycle, 1,200 hours of labor are available under a union agreement. The firm also has a stock of 3,500 board feet of good-quality redwood.  Each bench that Outdoor Furniture produces requires 4 labor hours and 10 board feet of redwood; each picnic table takes 6 labor hours and 35 board feet of redwood. Completed benches will yield a profit of $9 each, and tables will result in a profit of $20 each.

a.       How many benches and tables should Outdoor Furniture produce to obtain the largest possible profit?  Use the graphical LP approach.   (Submit both the QM and the graphical solution.)

5-2       MSA Computer Corporation manufactures two models of minicomputers, the Alpha 4 and the Beta 5.  The firm employs six technicians, working 160 hours each per month, on its assembly line.  Management insists that full employment (i.e., all 160 hours of time) be maintained for each worker during next month’s operations.  It requires 20 labor hours to assemble each Alpha 4 computer and 25 labor hours to assemble each Beta 5 model.  MSA wants to see at least 10 Alpha 4s and at least 15 Beta 5s produced during the production period.  Alpha 4s generate $1,200 profit per unit, and Beta 5s yield $1,800 each.

a.       Determine the most profitable number of each model of minicomputer to produce during the coming month.

b.      What would the profit be if they decided to make at least 15 of each model?

5-3       Woofer Pet Foods produces a low-calorie dog food for overweight dogs.  This product is made from beef products and grain.  Each pound of beef costs $1.50, and each pound of grain costs $0.70.  A pound of the dog food must contain at least 9 units of Vitamin 1, 10 units of Vitamin 2, and 6 units of Vitamin 3.  A pound of beef contains 6 units of Vitamin 1, 12 units of Vitamin 2, and 4 units of Vitamin 3.  A pound of grain contains 12 units of Vitamin 1, 9 units of Vitamin 2, and 10 units of Vitamin 3.  Formulate this as a LP problem to minimize the cost of the dog food.

a.       How many pounds of beef and grain should be included in each pound of dog food?

b.      What is the cost and vitamin content of the final product?

c.       What would the distribution of beef and grain be if the cost of beef increased to $3.50 per pound?

5-4       The Feed ‘N Ship Ranch fattens cattle for local farmers and ships them to meat markets in Kansas City and Omaha. The owners of the ranch seek to determine the amounts of cattle feed to buy so that minimum nutritional standards are satisfied, and at the same time total feed costs are minimized.  The feed mix can be made up of the three grains that contain the following ingredients per pound of feed:

	FEED (OZ)
INGREDIENT	STOCK X	STOCK Y	STOCK Z
A	3	2	4
B	2	3	1
C	1	0	2
D	6	8	4

The cost per pound of stocks X, Y, and Z are $3.50, $4.75, and $4.50, respectively. The minimum requirement per cow per month is 4 pounds of ingredient A, 5 pounds of ingredient B, 1 pound of ingredient C, and 8 pounds of ingredient D.  The ranch faces one additional restriction:  it can only obtain 500 pounds of stock Z per month from the feed supplier regardless of its need.  Because there are usually 100 cows at the Feed ‘N Ship Ranch at any given time, this means that no more than 5 pounds of stock Z can be counted on for use in the feed of each cow per month.

a.   Formulate this as an LP problem.

b.   Solve using LP software.

You may submit just the answers or you may submit the answers and the QM worksheets you used to arrive at the answer. Choosing the latter will afford instructors the opportunity to review your work and determine if you understand the concept but have made some minor computational error, therefore allowing them to assign some credit based on your understanding. Submitting just the answers does not provide for any partial credit.