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Healthcare related economics and accounting

2. For what sorts of inventory and supply items is just-in-time management a reasonable goal? Explain.

3. What are the advantages of leasing?

4. What prevents most health care organizations from initiating commercial paper for short-term financing?

5. What makes the profitability index better than the net present value as a guide for capital rationing decision? What does it take into account that new present value does not?

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2. For what sorts of inventory and supply items is just-in-time management a reasonable goal? Explain.
JIT is designed to achieve high volume production using minimal inventory of raw materials, work in progress and finished goods. Since JIT works on pull process, it requires high levels of quality at each stage of the process, stronger vendor relations and a fairly predictable demand for the end product. Since JIT requires stable schedules over a lengthy time horizon, it requires accomplishing level scheduling, freeze windows and underutilization of capacity. Thus, the reasonable goals for inventory are nearly zero inventory at all stages of production in system and a strong supplier base producing quality and standardized supplies.

3. What ...

Solution Summary

The solution discusses a number of questions relating to just-in-time management, leasing, and health care organizations.

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