Question
Pareto chart and cost of quality report for a service company The administrator of Liberty Hospital has been asked to perform an activity analysis of
Pareto chart and cost of quality report for a service company
The administrator of Liberty Hospital has been asked to perform an activity analysis of the emergency room (ER). The ER activities include cost of quality and other patient care activities. The lab tests and transportation are hospital services external to the ER for determining external failure costs. The result of the activity analysis is summarized as follows:
Activities | Activity Cost |
Patient registration | $ 6,500 |
Verifying patient information | 9,700 |
Assigning patients | 13,000 |
Searching/waiting for doctor | 9,200 |
Doctor exam | 4,900 |
Waiting for transport | 17,500 |
Transporting patients | 16,200 |
Verifying lab orders | 14,500 |
Searching for equipment | 8,200 |
Incorrect labs | 11,300 |
Lab tests | 17,000 |
Counting supplies | 19,000 |
Looking for supplies | 8,200 |
Staff training | 4,800 |
Total | $160,000 |
Required:
1. Select the following Pareto chart of the ER activities.
a. |
b. |
c. |
d. |
The correct answer is __a___
2. Classify the activities into prevention, appraisal, internal failure, external failure, and other patient care activities. Classify the activities into value-added and non-value-added activities.
Activity | Activity Cost | Cost of Quality Classification | Value-Added/ Non-Value-Added Classification | |
Patient registration | $6,500 | Other patient care | Value-added | |
Verifying patient information | 9,700 | Appraisal | Value-added | |
Assigning patients | 13,000 | Other patient care | Value-added | |
Searching/waiting for doctor | 9,200 | Internal failure | Non-value-added | |
Doctor exam | 4,900 | Other patient care | Value-added | |
Waiting for transport | 17,500 | External failure | Non-value-added | |
Transporting patients | 16,200 | Other patient care | Value-added | |
Verifying lab orders | 14,500 | Appraisal | Value-added | |
Searching for equipment | 8,200 | Internal failure | Non-value-added | |
Incorrect labs | 11,300 | External failure | Non-value-added | |
Lab tests | 17,000 | Other patient care | Value-added | |
Counting supplies | 19,000 | Appraisal | Value-added | |
Looking for supplies | 8,200 | Internal failure | Non-value-added | |
Staff training | 4,800 | Prevention | Value-added | |
Total | $160,000 |
3. Use the activity cost information to determine the percentages of total ER costs that are prevention, appraisal, internal failure, external failure, and other patient care activities.
Quality Cost Classification | Activity Cost | Percent of Total Department Cost | |||||
Prevention | $ | % | |||||
Appraisal | % | ||||||
Internal failure | % | ||||||
External failure | % | ||||||
Other patient care | % | ||||||
Total | $ | % |
4. Determine the percentages of the total ER costs that are value-added and non-value-added.
Activity Cost | Percent of Total Department Cost | ||||||
Value-added | $ | % | |||||
Non-value-added | % | ||||||
Total | $ | % |
5. The ER has ____% of its total costs as non-value-added. Internal failure and external failure costs represent ____ % of the total costs.
Note:I just need help with questions 3, 4, and 5.
Pareto Chart of Quality Activities $20,000 $18,000 $16,000 $14,000 $12,000 Lab tests Assigning patients Incorrect labs Patient registration Doctor exam Staff training Counting supplies Waiting for transport Transporting patients Verifying lab orders Looking for supplies Searching for equipment Verifying patient information Searching/waiting for doctor Pareto ChartQuality Activities 25,000 20,000 15,000 Dollars 10,000 5,000 Lab tests Incorrect labs Doctor exam Staff training Counting supplies Waiting for transports Assigning patients Verifying lab orders Transporting patients Looking for supplies Patient registration Searching for equipment Verifying patient information Searching/waiting for doctor Pareto ChartQuality Activities 25,000 20,000 15,000 Dollars 10,000 HH 5,000 Lab tests Incorrect labs Doctor exam Staff training Counting supplies Waiting for transports Assigning patients Verifying lab orders Transporting patients Looking for supplies Patient registration Searching for equipment Verifying patient information Searching/waiting for doctor Pareto ChartQuality Activities 25,000 20,000 15,000 Dollars 10,000 HH 5,000 Lab tests Incorrect labs Doctor exam Staff training Counting supplies Waiting for transports Assigning patients Verifying lab orders Transporting patients Looking for supplies Patient registration Searching for equipment Verifying patient information Searching/waiting for doctor Pareto Chart of Quality Activities $20,000 $18,000 $16,000 $14,000 $12,000 Lab tests Assigning patients Incorrect labs Patient registration Doctor exam Staff training Counting supplies Waiting for transport Transporting patients Verifying lab orders Looking for supplies Searching for equipment Verifying patient information Searching/waiting for doctor Pareto ChartQuality Activities 25,000 20,000 15,000 Dollars 10,000 5,000 Lab tests Incorrect labs Doctor exam Staff training Counting supplies Waiting for transports Assigning patients Verifying lab orders Transporting patients Looking for supplies Patient registration Searching for equipment Verifying patient information Searching/waiting for doctor Pareto ChartQuality Activities 25,000 20,000 15,000 Dollars 10,000 HH 5,000 Lab tests Incorrect labs Doctor exam Staff training Counting supplies Waiting for transports Assigning patients Verifying lab orders Transporting patients Looking for supplies Patient registration Searching for equipment Verifying patient information Searching/waiting for doctor Pareto ChartQuality Activities 25,000 20,000 15,000 Dollars 10,000 HH 5,000 Lab tests Incorrect labs Doctor exam Staff training Counting supplies Waiting for transports Assigning patients Verifying lab orders Transporting patients Looking for supplies Patient registration Searching for equipment Verifying patient information Searching/waiting for doctorStep by Step Solution
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