John F. Kros, PhD, is a professor of marketing?and supply chain management in the College of Business at East Carolina University in Greenville, North Carolina.?He also is the coauthor of Statistics for Health Care Professionals: Working with Excel.Evelyn C. Brown, PhD, is a professor in the Department of Engineering and Associate Dean for Research in the College of Technology and Computer Science at East Carolina University, Greenville, North Carolina.

• Tables and Figures xiPreface xxiThe Authors xxxiPART I STRATEGY 1Chapter 1 Health Care Operations and Supply Chain Strategy 3Health Care Operations and Supply Chain Management 4Purchasing, Logistics, and Vendor-Managed Inventories 7Efficiency, Effectiveness, and Value 8Competitive Dimensions of Health Care 12The Bullwhip Effect in Health Care 14MiniCase: The Bullwhip Effect in Health Care Organizations 18Chapter 2 Financial Aspects of Health Care Operations and Supply Chain Management 21Health Care Finance and Operations/Supply Chain Management 22Income Statement/Operating Statement 24Balance Sheet 27Statement of Cash Flows 32Basic Financial Ratios and Metrics 35Time Value of Money 47Break-Even Analysis 49Crossover Analysis 53Chapter 3 Managerial Accounting Aspects of Health Care Operations and Supply Chain Management 61Managerial Aspects of Health Care Operations and Supply Chain Management 62Managerial Accounting 62Activity-Based Costing 65Supply Chain Management behind the Scenes: Cost Drivers at Hospitals 69PART II PROCESS DESIGN AND ANALYSIS OF HEALTH CARE OPERATIONS 75Chapter 4 Data and Statistical Tools for Health Care Operations Improvement 77Descriptive Statistics for Describing Data Sets 78Graphical Methods of Data Description 78Numerical Methods of Data Description 81Hypothesis Testing: Analyzing the Difference of Two Means 101Pareto Analysis 116Box-and-Whisker Plots 117Tornado Diagrams and Sensitivity Analysis 129Chapter 5 Problem Solving and Decision-Making Tools in Health Care Operations 143Health Care Operations and Supply Chain Management in Action: How Legal Decision Makers Use Decision Models 144Framing the Decision Problem 146Components of a Decision-Making Problem 146Payoff Tables 149Decision-Making Criteria without Probability Assessments 151Decision-Making Criteria with Probability Assessments 159Expected Value of Perfect Information 162Modeling 177Decision Trees 179Chapter 6 Simulation 201Introduction 202Process Flows 202Probability Distributions 203Random Number Generation 210Discrete-Event versus Continuous Simulation 211Monte Carlo Simulation 213Agent-Based Simulation 215Simulation in Health Care 215Queuing Analysis 216Chapter 7 Process Improvement and Patient Flow 229Introduction 230Process Mapping 231Value Stream Mapping 233Use of Maps and Charts in Health Care 240Staffing 242Workload Management 243Productivity and Efficiency Analysis 245Common Health Care Productivity and Efficiency Measures 248Improving Productivity and Efficiency 249MiniCase: Improving Process Flow to Improve Service-Level Performance Statistics 253Chapter 8 Facility Layout 257Introduction 257Layout Considerations 258Types of Layouts 262Muther Diagrams 264Workload Management 266Evaluating Different Types of Layouts 267Basics of Optimization 270Optimization Using Excel Solver 272Optimizing Facility Layout and Design 280PART III MANAGING HEALTH CARE OPERATIONS QUALITY 287Chapter 9 Managing Quality in a Health Care Setting 289What Is Service Quality? 290Quality Planning, Control, and Improvement 291Quality and Financial Performance 292Seven Tools for Quality Control 294Six Sigma Concepts 305Six Sigma and Lean 311MiniCase: Delayed Room Cleaning Dilemma 320Chapter 10 Quality Control and Improvement 323Design of Quality Control Systems 324Process Quality Control 324Variables Control 327Using Control Charts 331Process Capability 334Total Quality Management and Continuous Improvement 337International Organization for Standardization Certification 338Malcolm Baldrige Award 340PART IV PLANNING AND CONTROLLING HEALTH CARE OPERATIONS 351Chapter 11 Lean Concepts in Health Care 353Introduction 354What Is Lean? 354Controlling Waste 355Controlling Flow with a Kanban System 357Kaizen Events 359Value Stream Mapping 362Measures and Tools 362Adverse Effects of Becoming Too Lean 364MiniCase: Using Lean Concepts to Improve Inpatient Care 366Chapter 12 Forecasting for Health Care Management 369Analyzing Data Using Time Series and Regression Models 370Linear and Nonlinear Trends 371Seasonality in Data 372Naive Forecasting 376Moving Averages 378Weighted Moving Averages 381Exponential Smoothing 383Autocorrelation 387Regression as a Forecasting Technique 393Multiple Regression Model 402Measuring Accuracy 409Measuring Forecasting Errors 423Chapter 13 Project Management 431Introduction 432Role of Project Manager 432Objectives and Trade-Offs 433Planning and Control in Projects 435Project Scheduling 437Critical Path Method 440Gantt Charts 448Program Evaluation and Review Technique 451Implementation 453MiniCase: Implementing Electronic Medical Records at St. Hampton’s Hospital 457Chapter 14 Aggregate Planning, Scheduling, and Capacity Management in Health Care 461Aggregate/Central Planning 462Resource Planning and Control 464Scheduling and Capacity Management 468Workforce Scheduling 468Dispatching Rules 473Job Sequencing 474Johnson’s Rule 475Service Facility Location Analysis 486Center of Gravity Method 487Chapter 15 Inventory Management 501Introduction 502Purpose of Inventories 502Costs of Inventories 504Economic Order Quantity 506Independent versus Dependent Demand 509Periodic Review Systems 510Continuous Review Systems 511ABC Inventory Management 515Inventory Management Technology 519Index 525

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John F. Kros, PhD, is a professor of marketing?and supply chain management in the College of Business at East Carolina University in Greenville, North Carolina.?He also is the coauthor of Statistics for Health Care Professionals: Working with Excel.Evelyn C. Brown, PhD, is a professor in the Department of Engineering and Associate Dean for Research in the College of Technology and Computer Science at East Carolina University, Greenville, North Carolina.

• Tables and Figures xiPreface xxiThe Authors xxxiPART I STRATEGY 1Chapter 1 Health Care Operations and Supply Chain Strategy 3Health Care Operations and Supply Chain Management 4Purchasing, Logistics, and Vendor-Managed Inventories 7Efficiency, Effectiveness, and Value 8Competitive Dimensions of Health Care 12The Bullwhip Effect in Health Care 14MiniCase: The Bullwhip Effect in Health Care Organizations 18Chapter 2 Financial Aspects of Health Care Operations and Supply Chain Management 21Health Care Finance and Operations/Supply Chain Management 22Income Statement/Operating Statement 24Balance Sheet 27Statement of Cash Flows 32Basic Financial Ratios and Metrics 35Time Value of Money 47Break-Even Analysis 49Crossover Analysis 53Chapter 3 Managerial Accounting Aspects of Health Care Operations and Supply Chain Management 61Managerial Aspects of Health Care Operations and Supply Chain Management 62Managerial Accounting 62Activity-Based Costing 65Supply Chain Management behind the Scenes: Cost Drivers at Hospitals 69PART II PROCESS DESIGN AND ANALYSIS OF HEALTH CARE OPERATIONS 75Chapter 4 Data and Statistical Tools for Health Care Operations Improvement 77Descriptive Statistics for Describing Data Sets 78Graphical Methods of Data Description 78Numerical Methods of Data Description 81Hypothesis Testing: Analyzing the Difference of Two Means 101Pareto Analysis 116Box-and-Whisker Plots 117Tornado Diagrams and Sensitivity Analysis 129Chapter 5 Problem Solving and Decision-Making Tools in Health Care Operations 143Health Care Operations and Supply Chain Management in Action: How Legal Decision Makers Use Decision Models 144Framing the Decision Problem 146Components of a Decision-Making Problem 146Payoff Tables 149Decision-Making Criteria without Probability Assessments 151Decision-Making Criteria with Probability Assessments 159Expected Value of Perfect Information 162Modeling 177Decision Trees 179Chapter 6 Simulation 201Introduction 202Process Flows 202Probability Distributions 203Random Number Generation 210Discrete-Event versus Continuous Simulation 211Monte Carlo Simulation 213Agent-Based Simulation 215Simulation in Health Care 215Queuing Analysis 216Chapter 7 Process Improvement and Patient Flow 229Introduction 230Process Mapping 231Value Stream Mapping 233Use of Maps and Charts in Health Care 240Staffing 242Workload Management 243Productivity and Efficiency Analysis 245Common Health Care Productivity and Efficiency Measures 248Improving Productivity and Efficiency 249MiniCase: Improving Process Flow to Improve Service-Level Performance Statistics 253Chapter 8 Facility Layout 257Introduction 257Layout Considerations 258Types of Layouts 262Muther Diagrams 264Workload Management 266Evaluating Different Types of Layouts 267Basics of Optimization 270Optimization Using Excel Solver 272Optimizing Facility Layout and Design 280PART III MANAGING HEALTH CARE OPERATIONS QUALITY 287Chapter 9 Managing Quality in a Health Care Setting 289What Is Service Quality? 290Quality Planning, Control, and Improvement 291Quality and Financial Performance 292Seven Tools for Quality Control 294Six Sigma Concepts 305Six Sigma and Lean 311MiniCase: Delayed Room Cleaning Dilemma 320Chapter 10 Quality Control and Improvement 323Design of Quality Control Systems 324Process Quality Control 324Variables Control 327Using Control Charts 331Process Capability 334Total Quality Management and Continuous Improvement 337International Organization for Standardization Certification 338Malcolm Baldrige Award 340PART IV PLANNING AND CONTROLLING HEALTH CARE OPERATIONS 351Chapter 11 Lean Concepts in Health Care 353Introduction 354What Is Lean? 354Controlling Waste 355Controlling Flow with a Kanban System 357Kaizen Events 359Value Stream Mapping 362Measures and Tools 362Adverse Effects of Becoming Too Lean 364MiniCase: Using Lean Concepts to Improve Inpatient Care 366Chapter 12 Forecasting for Health Care Management 369Analyzing Data Using Time Series and Regression Models 370Linear and Nonlinear Trends 371Seasonality in Data 372Naive Forecasting 376Moving Averages 378Weighted Moving Averages 381Exponential Smoothing 383Autocorrelation 387Regression as a Forecasting Technique 393Multiple Regression Model 402Measuring Accuracy 409Measuring Forecasting Errors 423Chapter 13 Project Management 431Introduction 432Role of Project Manager 432Objectives and Trade-Offs 433Planning and Control in Projects 435Project Scheduling 437Critical Path Method 440Gantt Charts 448Program Evaluation and Review Technique 451Implementation 453MiniCase: Implementing Electronic Medical Records at St. Hampton’s Hospital 457Chapter 14 Aggregate Planning, Scheduling, and Capacity Management in Health Care 461Aggregate/Central Planning 462Resource Planning and Control 464Scheduling and Capacity Management 468Workforce Scheduling 468Dispatching Rules 473Job Sequencing 474Johnson’s Rule 475Service Facility Location Analysis 486Center of Gravity Method 487Chapter 15 Inventory Management 501Introduction 502Purpose of Inventories 502Costs of Inventories 504Economic Order Quantity 506Independent versus Dependent Demand 509Periodic Review Systems 510Continuous Review Systems 511ABC Inventory Management 515Inventory Management Technology 519Index 525

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John F. Kros, PhD, is a professor of marketing?and supply chain management in the College of Business at East Carolina University in Greenville, North Carolina.?He also is the coauthor of Statistics for Health Care Professionals: Working with Excel.Evelyn C. Brown, PhD, is a professor in the Department of Engineering and Associate Dean for Research in the College of Technology and Computer Science at East Carolina University, Greenville, North Carolina.

• Tables and Figures xiPreface xxiThe Authors xxxiPART I STRATEGY 1Chapter 1 Health Care Operations and Supply Chain Strategy 3Health Care Operations and Supply Chain Management 4Purchasing, Logistics, and Vendor-Managed Inventories 7Efficiency, Effectiveness, and Value 8Competitive Dimensions of Health Care 12The Bullwhip Effect in Health Care 14MiniCase: The Bullwhip Effect in Health Care Organizations 18Chapter 2 Financial Aspects of Health Care Operations and Supply Chain Management 21Health Care Finance and Operations/Supply Chain Management 22Income Statement/Operating Statement 24Balance Sheet 27Statement of Cash Flows 32Basic Financial Ratios and Metrics 35Time Value of Money 47Break-Even Analysis 49Crossover Analysis 53Chapter 3 Managerial Accounting Aspects of Health Care Operations and Supply Chain Management 61Managerial Aspects of Health Care Operations and Supply Chain Management 62Managerial Accounting 62Activity-Based Costing 65Supply Chain Management behind the Scenes: Cost Drivers at Hospitals 69PART II PROCESS DESIGN AND ANALYSIS OF HEALTH CARE OPERATIONS 75Chapter 4 Data and Statistical Tools for Health Care Operations Improvement 77Descriptive Statistics for Describing Data Sets 78Graphical Methods of Data Description 78Numerical Methods of Data Description 81Hypothesis Testing: Analyzing the Difference of Two Means 101Pareto Analysis 116Box-and-Whisker Plots 117Tornado Diagrams and Sensitivity Analysis 129Chapter 5 Problem Solving and Decision-Making Tools in Health Care Operations 143Health Care Operations and Supply Chain Management in Action: How Legal Decision Makers Use Decision Models 144Framing the Decision Problem 146Components of a Decision-Making Problem 146Payoff Tables 149Decision-Making Criteria without Probability Assessments 151Decision-Making Criteria with Probability Assessments 159Expected Value of Perfect Information 162Modeling 177Decision Trees 179Chapter 6 Simulation 201Introduction 202Process Flows 202Probability Distributions 203Random Number Generation 210Discrete-Event versus Continuous Simulation 211Monte Carlo Simulation 213Agent-Based Simulation 215Simulation in Health Care 215Queuing Analysis 216Chapter 7 Process Improvement and Patient Flow 229Introduction 230Process Mapping 231Value Stream Mapping 233Use of Maps and Charts in Health Care 240Staffing 242Workload Management 243Productivity and Efficiency Analysis 245Common Health Care Productivity and Efficiency Measures 248Improving Productivity and Efficiency 249MiniCase: Improving Process Flow to Improve Service-Level Performance Statistics 253Chapter 8 Facility Layout 257Introduction 257Layout Considerations 258Types of Layouts 262Muther Diagrams 264Workload Management 266Evaluating Different Types of Layouts 267Basics of Optimization 270Optimization Using Excel Solver 272Optimizing Facility Layout and Design 280PART III MANAGING HEALTH CARE OPERATIONS QUALITY 287Chapter 9 Managing Quality in a Health Care Setting 289What Is Service Quality? 290Quality Planning, Control, and Improvement 291Quality and Financial Performance 292Seven Tools for Quality Control 294Six Sigma Concepts 305Six Sigma and Lean 311MiniCase: Delayed Room Cleaning Dilemma 320Chapter 10 Quality Control and Improvement 323Design of Quality Control Systems 324Process Quality Control 324Variables Control 327Using Control Charts 331Process Capability 334Total Quality Management and Continuous Improvement 337International Organization for Standardization Certification 338Malcolm Baldrige Award 340PART IV PLANNING AND CONTROLLING HEALTH CARE OPERATIONS 351Chapter 11 Lean Concepts in Health Care 353Introduction 354What Is Lean? 354Controlling Waste 355Controlling Flow with a Kanban System 357Kaizen Events 359Value Stream Mapping 362Measures and Tools 362Adverse Effects of Becoming Too Lean 364MiniCase: Using Lean Concepts to Improve Inpatient Care 366Chapter 12 Forecasting for Health Care Management 369Analyzing Data Using Time Series and Regression Models 370Linear and Nonlinear Trends 371Seasonality in Data 372Naive Forecasting 376Moving Averages 378Weighted Moving Averages 381Exponential Smoothing 383Autocorrelation 387Regression as a Forecasting Technique 393Multiple Regression Model 402Measuring Accuracy 409Measuring Forecasting Errors 423Chapter 13 Project Management 431Introduction 432Role of Project Manager 432Objectives and Trade-Offs 433Planning and Control in Projects 435Project Scheduling 437Critical Path Method 440Gantt Charts 448Program Evaluation and Review Technique 451Implementation 453MiniCase: Implementing Electronic Medical Records at St. Hampton’s Hospital 457Chapter 14 Aggregate Planning, Scheduling, and Capacity Management in Health Care 461Aggregate/Central Planning 462Resource Planning and Control 464Scheduling and Capacity Management 468Workforce Scheduling 468Dispatching Rules 473Job Sequencing 474Johnson’s Rule 475Service Facility Location Analysis 486Center of Gravity Method 487Chapter 15 Inventory Management 501Introduction 502Purpose of Inventories 502Costs of Inventories 504Economic Order Quantity 506Independent versus Dependent Demand 509Periodic Review Systems 510Continuous Review Systems 511ABC Inventory Management 515Inventory Management Technology 519Index 525

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