The pros and cons of using average demand to assess the capacity requirements

Categories: DemandEconomicsMoney

I believe there are a few reasonable details as to why Average Demand would work in this case. The 30% incursion of population is due to the ER being in a city that has high level of tourism in particular periods. Although there probably are outbreaks of numbers of treated patients from time to time, it wouldn´t be sustainable for the ER to expand their capacity in regards of these forecasted spikes in trends. It is much more cost effective to expand by demand than by forecasting, as miscalculated forecasting can cost the ER a lot more money than accommodating to any shortages as these incidents occur.

However, the productivity of the ER will be much lower when they have to treat patients in rooms and closets where there are other interferences occurring. This will actually be a counter-productive solution, as the lower treatment turnover will contribute to more people in the halls, rather than less. Therefore, I don´t feel this is a good approach to assess the capacity requirements.

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Make a recommendation for Jenn as to what she should do and the information that she should provide in her request? First of all, Jenn would have to state that the average demand is not a proper solution to the ER. It would be of importance to stress the unethical aspects of having people placed hallways and closets as one of main points. Furthermore she should make it clear that having adequate rooms will build staff morale and create a better environment for both patients and workers.

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She should also present data to assess the need to hire enough staff for the peak season to increase the number of treated people in the ER. This increase will lead to higher turnover, and more free capacity. Down the line, when and if these points that Jenn have stated can show proof of improvement of the ER´s productivity and capacity use, the management can use this information to increase monetary funding.

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The pros and cons of using average demand to assess the capacity requirements. (2016, Apr 03). Retrieved from

The pros and cons of using average demand to assess the capacity requirements

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