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Arvind eye hospital is one of the busiest hospital in the country which operate round the perform maximum

of surgeries. A survey is conducted by the management in order to streamline its operations. Survey disclose that there is uneven rush of patients and uneven supply of doctors (i.e. maximum during day shifts and minimum during night shifts), which sometime create a mismanaged situation. Most of the doctors and assistants are the medical students who are available at different times. Duty shifts are of 8 hours and there are five shifts per day As per the requirement of different shifts the honorarium of doctors also vary in different shifts. The following table disclose the requirement of doctors, timing of shifts and honorarium per shift. Time 6.00 am to 8.00am 8.00 am to 10.00am 10.00 am to noon noon am to 2.00pm 2.00 pm to 4.00pm 4.00 pm to 6.00pm 6.00 pm to 8.00pm 8.00 pm to 10.00pm 10.00 pm to midnight Midnight to 6.00am Requirement of Doctors 48 79 65 87 64 73 82 43 52 15 Timing of duty Shifts(Hours) 6.00 am to 2.00 pm 8.00 am to 4.00 pm Noon to 8.00 pm 4.00 pm to Midnight 10.00 pm to 6.00 pm Honorarium per shift (Rs.) 1700 1600 1750 1800 1950

Since Arvind Eye Hospital is running as a charitable institution it always face problems in managing its financial affairs. Hospital has a bank loan of Rs. 500,000 for which bank wants atleast security deposit of Rs. 100,000. It normally perform three types of operations whose variable cost per surgery is given below which is to be made in cash within the same month of purchases, where as honorarium of doctors can be made in next month. Bank Loan FDR(given to bank as Security Deposits) Monthly revenue Variable cost:- Surgery Type I Variable cost:- Surgery Type II Variable cost:- Surgery Type III Rs. 500,000 Rs. 100,000 Rs.400,000 Rs.,10,000 Rs.,4,000 Rs.,2,000

Formulate the above problem as LPP and find out the minimum cost for hospital for honorarium which satisfy the requirement of patients. Also analyze the impact of above mentioned decision from managerial point of view.

Following are the summarized balance sheets of ESS GEE Ltd. as on December, 31 2001 and 2002 which is engaged in investment of number of project. Liabilities 2001 Rs. Share Capital General Reserve Profit and Loss A/c Bank Loan (Long-term) Sundry Creditors Provision for tax 1,00,000 25,000 15,200 35,000 75,000 15,000 2002 Assets Rs. 1,30,000 Land & Building 30,000 Machinery 15,400 Stock Sundry Debtors 2001 Rs. 1,001000 75,000 50,000 40,000 200 2.65.200 2002 Rs. 95,000 84,500 37,000 32,100 300 4,000 7,500 2,60,400

67,500 Cash 17,500 Bank Goodwill



The cost of capital of ESS GEE Ltd. Is 10 % and it made investment in five projects, whose cash flows are given in the following matrix Year Projects:- P1 Projects:- P2 Projects:- P3 Projects:- P4 Projects:- P5 Projects:- P6 Available resources 0 (100,000) (20,000) (30,000) (40,000) (20,000) (60,000) 120,000 1 (50,000) (60,000) Nil (60,000) (60,000) (20,000) 200,000 2 (10,000) (70,000) (40,000) 50,000 50,000 40,000 Nil 3 70,000 10,000 (80,000) 10,000 (5,000) 20,000 Nil

Cash generated by a particular project can also be reinvested in the same year. The accounting department of the organization has also computed the NPV of all the projects at 10% discount rate which is given in the following table Projects NPV at 10% discount rate P1 20,000 P2 15,000 P3 20,000 P4 15,000 P5 20,000 P6 10,000 Formulate the above problem as LPP if the objective of the organization is to maximize NPV within given resources. Also find out the optimum mix of investment keeping in mind that the cost of capital is 10%. If ESS GEE Ltd. has surplus money of Rs. 200,000 then in which project it is to be invested.