Since opening day, the Arnold Palmer Hospital has experienced an explosive growth in demand for its services. One of only six hospitals in the U.S. to specialize in health care for women and children, Arnold Palmer Hospital has cared for over 1,500,000 patients who came to the Orlando facility from all 50 states and more than 100 countries. With patient satisfaction scores in the top 10% of U.S. hospitals surveyed (over 95% of patients would recommend the hospital to others), one of Arnold Palmer Hospital’s main focuses is delivery of babies. Originally build with 281 beds and a capacity for 6,500 births per year, the hospital steadily approached and then passed 10,000 births.

Discussion Questions
1. Given the capacity planning discussion in the text (see figure S7.6) what approach is being taken by Arnold Palmer Hospital toward matching capacity to demand?
2. What kind of major changes could take place in Arnold Palmer Hospital’s demand forecast that would leave the hospital with an underutilized facility (namely, what are the risks connected with this capacity decision)?
3. Use regression analysis to forecast the point at which Swanson needs to “build out” the top two floors of the new building, namely, when demand will exceed 16,000 births.