Simulation_Review

Simulation Review Kimberly Shaw HCS/405 June 27, 2011 Diana Schilling This essay will discuss the decisions that were made when completing the simulation. This essay will discuss the reasoning on the choices that were made in phase one of the simulation that discussed capital shortage with the financial accounting from a cardiac care hospitals perspective. This essay will discuss the options that were taken to decrease the capital shortage for the company. This essay will also discuss the cost cutting options, and the loan option selected as well as the outcome of these decisions. In phase two the options for funding equipment was looked at and this essay will discuss the outcome of the decision. This essay will also look at the funding options for funding options for capital expansion and what options were chosen and the outcome of this decision. Finally, this essay will discuss what lessons were learned from this simulation and if had the option would these same decisions be made, and this essay will also discuss how these decisions would be applied at current or future jobs. In phase one of the simulation we looked at the impact on the cost cutting measures. The options that were chosen were reducing agency staff as well as changing the skill mix. These two cost cutting options did not leave a shortfall. This was the best option for the organization. Reducing the agency staff is a great option because the organization would constantly have to train new agency staff when current agency staff may find permanent positions. These staff members also have the salaries of two times the permanent staff that could be hired because they are called upon short notice and do not offer any type of benefits within the agency they are working. The other option that was chosen was the changing the skill mix this means hiring people to do job duties that do not require licenses this would leave the nurses able to delegate duties so they can focus on patient care and the duties that require nursing licenses. The options for repaying loans decided on option one with repaying the loan within six months from the time the loan was obtained. The shorter timeframe a loan is paid off the more interest the organization will save. The reason six months was decided was because it would be more realistic for a company to try and repay the loan in this timeframe then trying to repay in less then six months. These options will be a better outcome for the company after the first quarter because after the first quarter then the company will begin to have higher revenue that will coming into the organization. Looking at the information that was submitted the decisions that were made for the company was a great choice these choices will save the company approximately $811,249.00 by quarter one. Phase two of the simulation looks at the options for cost effective acquisition. The option that was decided for the organization was to opt for the operating lease for all of the necessary equipment needed for the organization. Purchasing refurbished equipment would have been the best option for the organization because this equipment does not last longer than ten years. This means that if the organization purchases refurbished equipment that is five year old or less in five years this equipment would need to be replaced. The company would not have to spend as much money on a refurbished one. They would a new one, the operating lease would cost too much, and the company would just be losing out the lease money they are spending because they would still need to replace the equipment within the ten years. The option that was the best choice for the x-ray machines would be the capital lease option. X-ray machines have a life span of about 15 years. So actually purchasing would be a good investment for the organization. The operating lease option however was a good choice for ultrasound equipment because these types of machines do not last very long. The operating lease is great for when the equipment needs to be updated. This option also makes sure the organization always has the most recent technology for the patients. The final phase was the funding options for the expansion projections for the organization. The option that was chosen for this phase was the private bank funding. The loan maturity for this option was a lot less duration then the other two choices and for the cost of the project being $75,000 the net present value was the lowest in this option then the other two. However, this option was not the best option for the organization. The best option was HUD 242 funding option this is because the net present value was the highest that supplies the organization the ability to use their debts as an investment and if this was not utilized then the debt of the organization would be useless for the organization and could hurt the company. The lessons that were learned within this essay were that just because it sounds like the best option for the company it may not always be. Companies really need to take the time for research all options for the situations before making decisions. When one just looks at the information and does not take time to analyze then it could cause detrimental effects for the company and could be the difference between success and failure of the company. When looking at finance an option as well cutting costs for the company this is a very extensive process. If this simulation was completed again one would look at all the information not only what looked like the best numbers because they were not necessarily the best options. It is not always how the information looks on paper it is more about the end result when it comes to finances. The information may look great on paper but in the end could hurt the company. When utilizing this information in ones current or future career options one would need to really analyze the information and bring into discussions multiple members of the organization to obtain their ideas for the company. These types of decisions should never be left up to one person to decide. \ In conclusion, this essay discussed the simulation for analyzing financial indicators. One now understands all three phases of the simulations and the choices that were made as well as if these choices were the best option for the company and why. This essay also supplied the information on if one completed this simulation again would the same decisions be made as well as what was learned from these decisions. Finally, this essay supplied information on how this information would be applied in current or future career options.