CASE NOTES:

This spreadsheet contains yearly operating fixed costs & per patient variable costs for three different models of MRI Scanning Machines as well as the number of patients from 2021.

Due to the expected patient growth over the next 3 years, the hospital is planning to buy new equipment. With new machines, MRI Scan times are faster & more accurate, therefore the Director feels she can replace the current 3 machines with 2 new machines & still improve their processing times. In order to choose the correct machine, we need to know the 2022 patient forecast. However since we are buying TWO machines, only half the forecast is needed to determine which machine is the best choice based on the Break Even Crossover points.

COMPLETE THE FOLLOWING ANALYSIS:

•Mathematically calculate patient crossover points where the total costs are equal for:

•Siemens vs. General Electric

•Philips vs. Siemens

•Detemine the number of patients expected for Year 2022 based on 12% growth.

•Calculate ½ the 2022 patient count since two machines will be used.

•Graph the cost curves for each of the three machines showing visually the crossover points graphically. Steps include:

•Set up a range of patients from 0 to ≥ ½ of 2022 Forecast

•HINT: Increase by increments of 250 patients. 

•Set up columns with formulas calculating the fixed & variable costs for each machine type based on the patient amount.

•Highlight the data & choose a line graph.

•Be sure to change the Chart Title to something meaningful & include a legend.

•Indicate which machine brand should be purchased based on future patient forecasts & costs. 

Hospital-MRI-Machine-Choice-Data-Case-Part-3