Case summary:
AP hospital is one of the top hospitals dedicated to serving women and children. The hospital consists of 2000 employees, 431 bed facilities covering 676,000 square feet. With numerous limitations, AP hospital was once a part of a large buying group serving over 900 members.
AP hospital and seven other hospitals partnered and formed a small firm by the powerful name of HPA Corporation. With two changes the corporation saved $7 million in its first year. First, the corporation was structured and staffed so that saving with its contract efforts went to eight members.
Second, it made a long term contract with 3 to 4 years and not a short-term one within a year. The supply chain activities varied in service-based firms and in AP hospital the supply chain measure manifested itself through the MEO committee. The committee evaluated the purchase bills to achieve economic targets.
The companies succeed to make customized products with the help of third tier suppliers. The customized packs are used in the operating room, which is delivered by MGM and later assembled. The HPA permitted AP hospital to be creative and save costs which would benefit the hospital.
To determine: AP hospital’s constraints in making decisions based on economics alone.
Want to see the full answer?
Check out a sample textbook solutionChapter 11 Solutions
EBK PRINCIPLES OF OPERATIONS MANAGEMENT
- Avion, Inc. Susan Dey and Bill Mifflin, procurement managers at Avion, Inc., sat across from each other and reviewed a troubling performance report concerning a key supplier, Foster Technologies. The report detailed the deteriorating performance of Foster Technologies in the areas of material quality and on-time delivery. At this point, Kevin ODonnell, another procurement manager, entered the room. Explain the role of performance measurement in managing supply chain activities.arrow_forwardMattress Wholesalers, Inc., is constantly tryingto reduce inventory in its supply chain. Last year, cost ofgoods sold was $7.5 million and inventory was $1.5 million.This year, cost of goods sold is $8.6 million and inventoryinvestment is $1.6 million.a) What were the weeks of supply last year?b) What are the weeks of supply this year?c) Is Mattress Wholesalers making progress in its inventoryreduction effort?arrow_forwardMattress Wholesalers, Inc. is constantly trying to reduce inventory in its supply chain. Last year, cost of goods sold was $7.48 million and inventory was $1.53 million. This year, costs of goods sold is $8.57 million and inventory investment is $1.64 million. a) What was its weeks of supply last year? weeks (round your response to two decimal places). b) What is its weeks of supply this year? c) Is Mattress Wholesalers making progress in its inventory reduction effort? Since the number of weeks that cover the supply has weeks (round your response to two decimal places). Mattress Wholesalers is making in its inventory-reduction effort.arrow_forward
- Arnold Palmer Hospital, one of the nation’s top hospitals dedicated to serving women and children, is a large business with over 2,000 employees working in a 431-bed facility totaling 676,000 square feet in Orlando, Florida. Like many other hospitals, and other companies, Arnold Palmer Hospital had been a long-time member of a large buying group, one servicing 900 members. But the group did have a few limitations. For example, it might change suppliers for a particular product every year (based on a new lower-cost bidder) or stock only a product that was not familiar to the physicians at Arnold Palmer Hospital. The buying group was also not able to negotiate contracts with local manufacturers to secure the best pricing So in 2003, Arnold Palmer Hospital, together with seven other partner hospitals in central Florida, formed its own much smaller, but still powerful (with $200 million in annual purchases) Healthcare Purchasing Alliance (HPA) corporation. The new alliance saved the HPA…arrow_forwardBy using Michael Porter’s five forces model, evaluate airline industry.please provide detailed answer.arrow_forwardWhat is a supply chain? What is the purpose of supply chain management systems?2. What is the purpose of cost accounting ISs?3. What is the relationship between CAD and CAM systems?4. What are the concerns in cash management, and how do cash management ISs help finan- cial managers?5. What is time to market? How have ISs affected time to market?6. In brief, what is the purpose of customer rela- tionship management systems?7. WhatarethetypicalcomponentsofERPsystems?8. Although technologically the full linking of the SCM systems of suppliers and buyers is feasible, many buyers are reluctant to do so. Why?9. Why do the ERP installation and testing of systems require that experts be involved? Whydoes the implementation of so many ERP sys-tems face severe challenges or totally fail?10. What is EOQ? Which two problems do ISs thatcalculate EOQ help minimize?11. What is JIT? How do MRP and MRP II systems help achieve JIT?12. For the human resource managers of some orga- nizations the entire…arrow_forward
- Question 2Events and experiences such as the FIFA world cup competitions attract sponsors who put in substantial amounts of money.Assess the wisdom of being a headline sponsor at the FIFA world cup event.arrow_forward9 Aldi has been a successful retailer in Australia in the last 20 years. This success has been achieved in a highly competitive market in which two other giants, Coles and Woolworths, have dominated the market for many decades. Use desk research and find out about the reasons behind Aldi's success in Australian marketplace.arrow_forwardwhat is The supply chain concept in Walmart?arrow_forward
- Purchasing and Supply Chain ManagementOperations ManagementISBN:9781285869681Author:Robert M. Monczka, Robert B. Handfield, Larry C. Giunipero, James L. PattersonPublisher:Cengage Learning