operational research presentation
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Uncertainty on the Molecular Level
Group Fuchsia:Heather Jacobson, Jessica Landin, Will Liu & Brian
Wiggs
The Problem
• Reduce Operational Costs• Improve Patient Satisfaction
How can the laboratory meet these objectives?
Currently…..
HPVs, HSVs, CT/NGs and specimens for Vaginitis Panel are outsourced to
Average 5 day testing TAT
Costs lab an estimated $46.9 million/yr
•Possible solution….
• Expand laboratory to include a molecular testing department (provide testing for HPV, HSV, CT/NG)
Reduce Outsourcin
g Costs
Expand Services
Reduce Turnaround
Time
Improve Patient
Satisfaction
Maximize Employee Resources
Uncertainty Present in Solution
Demand by test type
Number of tests to run
Number of instruments needed
Number of FTEs
Modeling Methods Used to Explore Uncertainty
Optimization
Simulation
Basic Spreadsheet Modeling (NPV, 5 Yr Forecast)
Sensitivity Analysis
Inputs
Demand
Optimization
Goal of Optimization…
Help determine how many tests can run per day per instrument
How many FTEs needed
Help define action plan
Sensitivity Table created "by hand" by changing the number of FTEs and running solver each time, and then recording the test run cycles.Optimal Breakdown of Run Cycles (by test types):
HPV HSV CT/NG Vaginitis Panel1 FTE 336 12 0 0 2 FTE 336 360 0 0 3 FTE 336 360 0 2088 4 FTE 336 360 0 4133 5 FTE 336 360 202 4133 6 FTE 336 360 202 4133
Sensitivity Table created "by hand" by changing the number of FTEs and running solver each time, and then recording the in-house test volumes.
Optimal Breakdown of Tests (by types):
HPV HSV CT/NG Vaginitis Panel1 FTE 29568 1056 0 0 2 FTE 29568 31680 0 0 3 FTE 29568 31680 0 12528 4 FTE 29568 31680 0 24798 5 FTE 29568 31680 13736 24798 6 FTE 29568 31680 13736 24798
Breakeven Analysis
Goal of Breakeven Analysis…
Help to quantify each test that would have to be performed in-house in order to breakeven from the initial investment
Simulation
Goal of Simulation…
To address the high degree of uncertainty related to test volume
To determine the distribution of net saving based on the probability distributions of test demand volumes
NPV, 5 Year Forecast
Goal of NPV/5 Yr Forecast…
Determine NPV of cost savings over next 5 years
Sensitivity Analysis of 5 YR Forecast
5
FH should lease the Rapid Capture system and purchase the remaining equipment.
To optimize cost savings testing must be prioritized: (1)HPV, (2) HSV (3) Vaginitis (4) CT/NG
•Conclusions and Recommendations
FH should expand laboratory services to run the 4 tests thereby reducing costs by an avg $38 M.
5 FTEs should staff the molecular department
Staffing in department must be flexible with demand
1
2
3
4
Continued…
FH should advertise the expanded services/quicker TAT 6
•Conclusions and Recommendations
7 After implementation, test demand must be monitored so adjustments can be made if necessary
Significant Learnings Store all givens on one sheet for easier range name
maintenance and cleaner formatting
Important to clearly define your objectives: Net profits (not applicable) vs. Net savings
Do not create all of the analysis models at once (e.g. create shells for optimization, breakeven, simulation, and NPV all at once)
Optimization• If solver cannot identify a solution, simplify your
optimization model and re-evaluate your constraints
• When there are multiple optimal solutions, solver may reach one that is not the most optimal solution. You have to be cognizant of that possibility and adjust the trial values to ‘help’ solver calculate the most optimal solution.
Significant Learnings
Simulation• To eliminate the constant refresh of the rand()
function, change formula options to ‘manual’
NPV• Using logic statements to determine in-house test
completion across the 5 years• Two of the tests were already at maximum based
on resource constraints determine during optimization
• Sensitivity analysis completed during optimization for test prioritization
Continued…
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