Question

Beth Zion Hospital has received initial certification from the state of California to become a center for liver transplants. The hospital, however, must complete its first 10 transplants under great scrutiny and at no cost to the patients with the hospital picking the expenses. The cost per hour of surgery is estimated to be $5, 200. The very first transplant, just completed, required 27 hours. On the basis of research at the hospital, Beth Zion estimates that it will have an 80% learning curve. Using Table E.3, estimate the time it will take to complete:

a) the 10^th transplant

b) The cost of 10^th surgery to Beth Zion Hospital =

c) the first 10 transplants

d) The cost of all 10 surgeries to Beth Zion Hospital = $

Answer 1

Learning curve \(=80 \%\)

Time for first transplant \(=27\) hours

From Learning-Curve Coefficient Approach we know

\(T_{N}=T_{1} C\)

\(T_{N}=\) number of hours required to transplant the Nth unit

\(\mathrm{T}_{1}=\) number of hours required to transplant the 1st unit

\(C=\) learning-curve coefficient \(=\mathrm{N}^{\text {(log of learning rate } / \text { log2) }}\)

a)

By using the table E.3 for 10th transplant with 80\%learning curve \(C=0.477\)

Time to complete 10th transplant \(T_{10}=27^{*} 0.477=12.879\) hours

b) cost of 10 th surgery \(=\) No of hours to complete 10 th transplant * cost per hour \(=12.879 * 5200=\) \(\$ 66970.8\)

c) To complete total 10 transplants with learning curve \(80 \% \mathrm{C}=6.315\)

Total time for first 10 transplants \(=27^{*} 6.315=170.505\)

d) Total cost for 10 surgeries \(=170.505^{*} 5200=\$ 886626\)