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Question 2.8 - Cost Effective Decision Making The head of the pathology laboratory at a major medical center is reviewing her options for laboratory testing.

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Question 2.8 - Cost Effective Decision Making The head of the pathology laboratory at a major medical center is reviewing her options for laboratory testing. The laboratory plans the amount of testing work for the lab by classifying pathology tests into two categories: routine and complex. From experience she estimates a routine test to require 2 hours of lab technician time and a complex test to require 4 hours of lab tech time. The following is the expected demand for each type of test for the next quarter: Month Simple Routine Complex July 800 450 August 600 400 September 750 450 Laboratory technician salaries, including fringe benefits, average $3,600 per month. Each technician works 150 hours per month. If the laboratory workload exceeds the available staff time, the laboratory has the test performed at a neighboring private pathology laboratory that charge $60 for a routine test and $120 for a complex test. a) Determine how many lab technician positions are required to minimize the total cost of performing the required tests. The number of positions is constant for the entire quarter. b) What are the other employee and staffing issues that should be considered

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