5.7 Roanoke Medical Center, in partnership with Interfaith Healthcare Ministries, is opening a free clinic to help provide primary care services and chronic disease man- agement services for the uninsured and alleviate some of the strain on the hospi- tals emergency room. The initial proposal for the facility layout is based on a similar clinic operating in Lynchburg, Virginia. However, an operations analyst at the Roa- noke Medical Center has proposed an alternative layout that is believed to provide efficiency savings over the initial proposal. While the clinic is not yet operational, de- posits have already been placed with contractors to implement the initial layout. As a result, switching room locations will cost $8,000 each, with the exception of the dental and vision care areas, which will cost $15,000 to move. It is estimated to cost $0.50 to travel a foot. Table EX 5.7 displays the initial and alternative layouts for the Roanoke clinic. Table EX 5.7 Initial and Alternative Clinic Layouts. Primary Care Vision Care Initial Layout Community Pharmacy Women's Health Dental Care Total Transportation Cost (flow X distance) = $78,615 Mental Health Primary Care Alternative Layout Women's Health Community Pharmacy Mental Health Dental Care Total Transportation Cost (flow X distance) = $140,000 Vision Care a. Confirm whether the analyst's alternative proposal provides efficiency savings. If so, what are the efficiency savings of the alternative layout? b. What is the cost to switch room locations to implement the alternative proposal? How long would it take to recover the costs of implementing the layout in the alter- native proposal? 5.7 Roanoke Medical Center, in partnership with Interfaith Healthcare Ministries, is opening a free clinic to help provide primary care services and chronic disease man- agement services for the uninsured and alleviate some of the strain on the hospi- tals emergency room. The initial proposal for the facility layout is based on a similar clinic operating in Lynchburg, Virginia. However, an operations analyst at the Roa- noke Medical Center has proposed an alternative layout that is believed to provide efficiency savings over the initial proposal. While the clinic is not yet operational, de- posits have already been placed with contractors to implement the initial layout. As a result, switching room locations will cost $8,000 each, with the exception of the dental and vision care areas, which will cost $15,000 to move. It is estimated to cost $0.50 to travel a foot. Table EX 5.7 displays the initial and alternative layouts for the Roanoke clinic. Table EX 5.7 Initial and Alternative Clinic Layouts. Primary Care Vision Care Initial Layout Community Pharmacy Women's Health Dental Care Total Transportation Cost (flow X distance) = $78,615 Mental Health Primary Care Alternative Layout Women's Health Community Pharmacy Mental Health Dental Care Total Transportation Cost (flow X distance) = $140,000 Vision Care a. Confirm whether the analyst's alternative proposal provides efficiency savings. If so, what are the efficiency savings of the alternative layout? b. What is the cost to switch room locations to implement the alternative proposal? How long would it take to recover the costs of implementing the layout in the alter- native proposal
