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Appendix A: XYZ Hospital

The staff of the XYZ Hospital had committed itself to introduce a new diagnostic procedure in the clinic. This procedure required the acquisition, installation, and introduction of a new medical instrument. Dr. Ed Windsor was assigned the responsibility for assuring that the introduction be performed as quickly and smoothly as possible.

Dr. Windsor created a list of activities that would have to be completed before the new service could begin. Initially, three individual steps had to be taken: (1) write instructions and procedures, (2) select techniques to operate the equipment, and (3) procure the equipment. The instructions and selection of the operators had to be completed before the training could commence. Dr. Windsor also believed it was necessary to choose the operators and evaluate their qualifications before formally announcing the new service to the local medical community. Upon arrival and installation of the equipment and completion of the operators' training, Edward Windsor wanted to spend a period checking out the procedures, operators, and equipment before declaring that the project was successfully completed.

Jack Worth, a member of the Bay Community Hospital staff, reported that it would be possible to save time on the project by paying some premiums to complete certain activities faster than the normal schedule listed in Table 1. Specifically, if the equipment were shipped by express truck, one week could be saved. Air freight would save two weeks. However, a premium of $200 would be paid for the express truck shipment and $750 would be paid for air shipment. The operator training period could also be reduced by one week if the trainees worked overtime. However, this would cost the hospital an additional $600. The time required to complete the instructions could be reduced by one week with the additional expenditure of $400. However, $300 could be saved if this activity was allowed to take three weeks.