Reference no: EM131247415

Heavenly Mercy Hospital wants to improve the efficiency of its radiology department and its responsiveness to doctors needs. Administration have observedthat. every hour, doctors submit an average of 18 x-ray films for examination by staff radiologists. Each radiologist is equipped with a conventional piece of viewing equipment that reads one film at a time. Because of complications taht vary from case to case, the actual time needed for report preparation is exponentially distributed with a mean of 30 minutes. Together, the cost of leasing one piece of viewing quipment and each radiologist's salary is $100 per hour. Althoug it is difficult to put a dollar value on a doctor's waiting time, each doctor would like to get a daiologist's report within an average of 40 minutes from the time the film is submitted.
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a. How many radiologist should the hospital hire? Compute the resulting hourly cost of of operating the radiology department.

The hospital could also change its diagnostic procedure by leasing more sophisticated X-ray devices: this would reduce a radiologist's average film-processing time to 20 minutes, but the rental and salaries would boost costs per radiologists to $150.

b. How many radiologist should the hospital hire? What is the resulting hourly cost of operating the radiology department? Would the new arrangement be advantageous?