Section A - Group 14 - Cleareyes

Case Submission On
ClearEyes Cataracts Clinic
Submitted in partial fulfilment of the requirements of
Operations Management - 1
By:-
Group No. 14
Amit Gawai (221007)
Rohith K S (2210046)
Sagar Bhoriya (2210047)
Srishti Jain (2210058)
Sumit Kishore (2210062)
Under the guidance of
Prof. Rohit Titiyal

Case Analysis & Solutions
Q-1 Solution:-
Fig 1.1: Process Flow Diagram

Table 1.1:-
Table 1.2:-
Table 1.3:-
The capacity utilization of each category of staff is given in table 1.1. It has been calculated
by considering 8-hour working days for all staff apart from the surgeon, who works for 7
hours a day. Assuming minutes in an hour, 48 weeks in a year and 5 days a week, and
numberthe number of workers in each category as given in the table, we obtain the time
available with each employee category per year. The time utilised was given in the exhibit 2,
Time utilised
and capacity utilisation hence becomes
Time available
Q-2 Solution:-
According to the case, 34.42% of patients who finish the intake process didn’t show up for
their scheduled procedure.
34.42/2 = 17.21% will be the increase in the number of patients who finish the intake process
and show up for their scheduled procedure.
Hence, 65.58% + 17.21% , i.e. 82.79% of patients finish the intake process and show up for
the surgery.
8,056 people present themselves for intake, which results in a total of 6,670 patients being
seen. 6,670-5,283/8,056 = 1,387/8,056 = 17.21% increase in patient volume.
Annual capacity for non-surgeon minutes is calculated as 115,200 minutes (5 days * 48

weeks * 8 hours * 60 minutes).
Receptionist utilisation = 29,452/115,200 = 25.57%
PSR usage (per person) is 353,290 divided by 115,200, which equals 306.68%, multiplied by
four employees for this job title, which equals 76.67%
Utilisation rate of technicians (per person) = 212,906/115,200 = 184.81%/3 employees with

this job title = 61.60%
Cleaner usage = 51,826/115,200 = 44.99%
The annual capacity of a surgeon's minutes is equal to 5 days * 48 weeks * 7 hours * 60

minutes, which equals 100,800 minutes.
Utilisation of the Staff Surgeon = 119,960 out of 100,800 = 119.01%
Hence, staff required will be increased for surgeons, since their utilisation has increased
beyond 100%. This can be done by employing an additional part time staff surgeon.
Total Time Capacity

Rooms Availability Time Utilised
Available Utilisation
Intake 2 259,200 161,120 62.2%
Surgical Room 3 388,800 174,339 44.8%
Examination Room 2 259,200 114,593 44.2%
The utilization of the surgery room and exam room will be changed to 60% and 55.8%,
respectively (refer to the table above). Hence there are no requirements to add any new
surgery or exam room. The utilization of the intake room remains the same, as the yield
increase happens after the intake.
Q-3 Solution:-
Description Rate Calculation Before Yield After Yield

Formula Increase ($) Increase ($)
Procedures Yield increase 5283 6670

per year: calculated above
Revenues: 1,338 net revenue per 1,338 * no of 7068654 8924460

procedure patients
Total 7068654 8924460

Revenue
Costs
Direct Variable Cost 480 * no of 2535840 3201600

per procedure patients
Wages Surgeon : 200,000 + 200000+40*no of 384440 (A) 439920

40/operation patients
1 Receptionist :38,000 Fixed Cost 38000 (B) 38,000
4 PSRs : 38,000 Fixed Cost 152000 (C) 152000
3 Technicians: 48,000 Fixed Cost 144000 (D) 144000
1 Cleaner : 31,000 Fixed Cost 31000 (E) 31000
Benefits at 28% of labor costs =0.28*(A+B+C+D 209843 217963

+E)
Other Costs Advertising Fixed Cost 48000 48000
Facility Cost net of Fixed Cost 36000 36000

rent
Cleaning and Fixed Cost 36000 36000

Maintenance
Other facilities: Fixed Cost 90238 90238

insurance, IT, various
Legal Fixed Cost 280969 280969
Miscellaneous Fixed Cost 80420 80420
Accounting Fixed Cost 90000 90000

Depreciation Fixed Cost 160000 160000
Total Cost 4156750 5046110
Total Pre Total Revenue - 2911904 3878350

Tax Total Cost
Revenue
Hence, from the above table, it can be concluded that the pre-tax revenue has increased
from $2911904 to $3878350, i.e., an increase of $9,66,446 due to the rise in the yield of the
process.
Q-4 Solution:-
From the available data in exhibit 3, the following actions can be taken to increase yield:
● Lack of funds is the reason for a majority of the population not to show up, and to
tackle this; discounts could be offered for the patients who do not show up due to this
reason since there is a margin of $(1338-480), i.e., $858 for operation.
● Conners can consider providing a ride to and fro from a clinic during scheduling the
calls. It can be planned so that the patients from the same area are called on the same
day.
● Regular follow-up calls to patients planning to do it in the future are to be done so that
the number of people who plan to do it in the future increases.
Q-5 Solution:-
We recommend that Dr. Connors investigate lowering yield loss, which would boost the
clinic's pre-tax profitability. In addition, if she chooses to increase worker hours, she risks
destroying morale, which has an intangible cost. Moreover, if she did not handle the no-
shows for surgery, she would run the risk of a decrease in staff utilization and an increase in
other costs (such as cleaning and maintenance), with no assurance that an increase in volume
would offset these expenses. And, if she expanded the existing space, she would lose $24,000
per year in rent from the small business tenant ($2,000 per month), incur a one-time cost of
$60,000 to buy out the tenant, incur significant construction and furnishing costs (exam room
= $42,000, surgical room = $93,000, and intake room = $30,000), and risk closing the clinic
for a minimum of one month for construction. Expanding to a new location would strain Dr.
Connors. It could result in losing other intangible advantages, such as those from her soothing
anxious patients and their families. How many people may not have completed the operation
if she were not present in the initial clinic to calm their fears? The increase in pre-tax
earnings from minimizing yield loss overcomes the dangers associated with the other
alternatives.

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What are the main factors affecting yield and how can they be addressed?

What are the main factors affecting yield and how can they be addressed?

How does revenue and costs change with an increase in yield?

How does revenue and costs change with an increase in yield?

Case Submission On

ClearEyes Cataracts Clinic

Submitted in partial fulfilment of the requirements of

Amit Gawai (221007)

Sagar Bhoriya (2210047)

Srishti Jain (2210058)

Sumit Kishore (2210062)

Under the guidance of

Prof. Rohit Titiyal

Fig 1.1: Process Flow Diagram

Annual capacity for non-surgeon minutes is calculated as 115,200 minutes (5 days * 48

Receptionist utilisation = 29,452/115,200 = 25.57%

Utilisation rate of technicians (per person) = 212,906/115,200 = 184.81%/3 employees with

Cleaner usage = 51,826/115,200 = 44.99%

The annual capacity of a surgeon's minutes is equal to 5 days * 48 weeks * 7 hours * 60

Utilisation of the Staff Surgeon = 119,960 out of 100,800 = 119.01%

Total Time Capacity

Description Rate Calculation Before Yield After Yield

Procedures Yield increase 5283 6670

Revenues: 1,338 net revenue per 1,338 * no of 7068654 8924460

Total 7068654 8924460

Direct Variable Cost 480 * no of 2535840 3201600

Wages Surgeon : 200,000 + 200000+40*no of 384440 (A) 439920

1 Receptionist :38,000 Fixed Cost 38000 (B) 38,000

4 PSRs : 38,000 Fixed Cost 152000 (C) 152000

3 Technicians: 48,000 Fixed Cost 144000 (D) 144000

1 Cleaner : 31,000 Fixed Cost 31000 (E) 31000

Benefits at 28% of labor costs =0.28*(A+B+C+D 209843 217963

Other Costs Advertising Fixed Cost 48000 48000

Facility Cost net of Fixed Cost 36000 36000

Cleaning and Fixed Cost 36000 36000

Other facilities: Fixed Cost 90238 90238

Legal Fixed Cost 280969 280969

Miscellaneous Fixed Cost 80420 80420

Accounting Fixed Cost 90000 90000

Total Cost 4156750 5046110

Total Pre Total Revenue - 2911904 3878350

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