Discuss two important decisions that can be facilitated by CVP analysis for a 500-bed hospital with a level-4 trauma center

Questions#1
1. Discuss two important decisions that can be facilitated by CVP analysis for a 500-bed hospital with a level-4 trauma center.
2. The CEO of Sunny Hospital believes that CVP is of limited use to his hospital. He states to you: “Most of our costs are fixed, and we cannot control fixed costs.” Provide a coherent critique of his statement.
3. “If a cost is fixed, it is no differential.” Comment and explain your thinking.
4. In your own words, explain two quantitative and two non-quantitative factors that are important when a hospital is evaluating an outsourcing decision.
Questions#2
1. In the Cambridge Hospital Case, because physicians’ time is costly, Cambridge was interested in the possibility of using other, less highly paid, professionals (interns/residents and the nurse practitioner) for some routine visits. According to Exhibit 10 of the case, interns and residents are not less costly than physicians for routine visits. Use the cost system information in Exhibits 7 and 8 to identify two reasons why interns and residents are costly to use, even though they are not paid highly.
2. In the Cambridge Hospital Case, a variety of patient characteristics might affect the costs of providing routine outpatient visits. Identify one patient characteristic that is captured in Cambridge’s cost system. Does this patient characteristic have a substantial effect on costs? (See Exhibits 5 and 10.).
3. In the Owens and Minor Case, identify and discuss two effects of activity-based pricing (ABP) on customer behavior.
4. In the Owens and Minor Case, identify two obstacles to successful implementation of activity-based pricing at Ideal. Also, discuss how you would address these obstacles.
Question#3
1. The ABC system at Cambridge is an improvement over the information available previously but is not completely state-of-the-art. What do you think is particularly good about this system? What would you improve?
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