Question

Please answer in detail, I got this answer couple time in very nutshell. URGENT

Answers given without showing steps or providing explanations will not be considered. Where possible, use tables and/or graphs to support your answers.

1. The World Health Organization (WHO) is considering sending in a team of experts to deal with an outbreak of schistosomiasis in a developing country. It costs $25,000 for every additional five team members sent. Sending a larger team will allow WHO to prevent more fatalities, and they estimate the following effectiveness:

Number of Team Members	Number of Deaths
0	1200
5	500
10	200
15	100
20	60
25	40
30	30
35	25
40	22
45	20
50	20

a) (20’) Please plot the incremental cost-effectiveness ratios in a two-dimensional graph with total effectiveness along the horizontal axis and incremental cost-effectiveness ratios along the vertical axis.

b) (20’) If saving a life is valued at $10,000, what is the optimal number of team members sent?

c) (20’) Suppose the WHO has a total budget of $150,000 to be spent on fighting this epidemic. How would your answer to b) change?

2. Patient BN is a 36-year-old female with a type of organ failure that reduces her quality of life to half of what it would be in good health. Without treatment she can expect to live only two years. With a successful transplant, BN can expect to live four years and have a quality of life that is near 80% what she would enjoy in good health. However, the transplant costs $100,000, plus $10,000 each year for drugs and follow-up care, and carries a 15% risk of rejection resulting in immediate death.

a) (20’) What is the cost per additional year of life gained (without discounting for time or quality of life)?

b) (20’) What is the cost per discounted Quality-adjusted Life-year (QALY) gained (assuming a 5%-time discount rate)?

Answer 1

The Theory of Constraints is a methodology for identifying the most important limiting factor (i.e. constraint) that stands in the way of achieving a goal and then systematically improving that constraint until it is no longer the limiting factor. In manufacturing, the constraint is often referred to as a bottleneck.

The Theory of Constraints takes a scientific approach to improvement. It hypothesizes that every complex system, including manufacturing processes, consists of multiple linked activities, one of which acts as a constraint upon the entire system (i.e. the constraint activity is the “weakest link in the chain”).

So what is the ultimate goal of most manufacturing companies? To make a profit – both in the short term and in the long term. The Theory of Constraints provides a powerful set of tools for helping to achieve that goal, including:

• The Five Focusing Steps (a methodology for identifying and eliminating constraints)
• The Thinking Processes (tools for analyzing and resolving problems)
• Throughput Accounting (a method for measuring performance and guiding management decisions)

Dr. Eliyahu Goldratt conceived the Theory of Constraints (TOC), and introduced it to a wide audience through his bestselling 1984 novel, “The Goal”. Since then, TOC has continued to evolve and develop, and today it is a significant factor within the world of management best practices.

One of the appealing characteristics of the Theory of Constraints is that it inherently prioritizes improvement activities. The top priority is always the current constraint. In environments where there is an urgent need to improve, TOC offers a highly focused methodology for creating rapid improvement.

A successful Theory of Constraints implementation will have the following benefits:

• Increased profit (the primary goal of TOC for most companies)
• Fast improvement (a result of focusing all attention on one critical area – the system constraint)
• Improved capacity (optimizing the constraint enables more product to be manufactured)
• Reduced lead times (optimizing the constraint results in smoother and faster product flow)
• Reduced inventory (eliminating bottlenecks means there will be less work-in-process)