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Paws Palace Pet Clinic

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Submitted By jluisax3
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Executive Summary
Paws Palace Pet Clinic is experiencing a high influx of new patients for Dr.Bill Schulke and his wife/manager, Sue Schulke. The opportunity of prospective new patients and profits is wonderful if all new patients could be attended to. The problem lies in the simple question, would a veterinary assistant be necessary in order to treat all patients and still keep profits soaring up for the clinic? Using Monte Carlo simulation and distributions fitting using the @Risk software, the below report will showcase how a veterinary assistant is the best option for the clinic’s future and will double their profits annually.

Background
Paws Palace Pet was initiated by Veterinarian, Bill Schulke, along with his wife/office manager, Sue Schulke. In the beginning two years of their practice, they would work regularly scheduled business hours of 8:30am to 5:30pm. Over the last year they have experienced a growth in patients and have found the need to work past regular hours. Bill has created a policy for self-preservation, he will take the last patient at 7:00pm and if there are any remaining patients, they would need to return the following day.

Although working past hours has allowed profit and gain in patients, at the end of the day, Bill still has 2-5 patients left without attention. This then results in lost patients who do not return again the following day and it also results in loss in potential profits.

His wife, Sue, was instructed to keep track of 100 customers in detail. Once this was done, and all details from arrival times and length of time required to see the doctor were taken into account. It was noticed that the likely service time was about 25 minutes, the worst was about 45 minutes, and the best was about 5 minutes. The date then also showed that half of the customers who had to wait 40 minutes or more would leave without seeing the doctor, ensuing in more profit loss as those patients not seen at the end of the day.

Problem Statement
With the recent growth of customers Paws Palace Pet has experienced, should they hire a veterinary assistant ?
Analysis
The method of analysis used was Monte Carlo simulation. Monte Carlo simulation is a technique that involves using random numbers and probability to solve decision problems. This method was used because there was limited knowledge and limited information on the input variables. The only two input variables available consisted of the service times and inter-arrival times. Along with this method of analysis, the @Risk software was also utilized. The simulation and software helped created distributions of the service times and inter-arrival times. The 3 distributions created were triangular, uniform, and normal, of which the triangular was best suited. The parameters used to formulate the distributions were 10,000 iterations and sample data was also used.
Below you will find a chart showing the Max, Min, Mean, Median, Mode, and 95th Percentile for the wait times, customers served, reneges, daily profit and annual profit.

Paws Palace Pet Clinic - Current and New Model C | Without Vet Assistance (Model 1) | With the Vet Assistance (Model 2) | Number of Customers Served | 25 | 26 | Average Wait Times | 31 | 0 | Number of Reneges | 4 | 0 | Daily Profit | 2,000 | 2,800 | Annual Profit | 500,000 | 1,123,200 |

Paws Palace Pet Clinic - Simulation Model Reports(10,000 Iterations) | Without Vet Assistance (Model 1) | With the Vet Assistance (Model 2) | Number of Customers Served | Max | 31 | 33 | Min | 19 | 19 | Mean | 25 | 26 | Median | 25 | 26 | Mode | 25 | 26 | 95th Percentile | 27 | 29 | Average Wait Times | Max | 133 | 56 | Min | 8 | 1 | Mean | 35 | 16 | Median | 34 | 16 | Mode | 36 | 13 | 95th Percentile | 52 | 28 | Number of Reneges | Max | 16 | 7 | Min | 0 | 0 | Mean | 5 | 1 | Median | 5 | 0 | Mode | 4 | 0 | 95th Percentile | 9 | 3 | Daily Profit | Max | 2,320 | 2,080 | Min | 1,280 | 1,520 | Mean | 1,890 | 1,986 | Median | 1,920 | 2,000 | Mode | 1,920 | 2,080 | 95th Percentile | 2,080 | 2,080 | Annual Profit | Max | 580,000 | 1,123,200 | Min | 320,000 | 820,800 | Mean | 472,386 | 1,072,491 | Median | 480,000 | 1,080,000 | Mode | 480,000 | 1,123,200 | 95th Percentile | 520,000 | 1,123,200 |

Model 1 * How many patients per day does the clinic serve on average? There is a 95% probability that ___27____ or more clients will be served per day. * What are the average daily and annual profits from the business? There is a 95% chance that $_2,080__ or more profit will be made per day; and $_520,000__ or more will be made during the first year. * What are the average and maximum wait times? There is a __10__% chance that customers will have to wait 25 minutes or less, a __60___% chance that customers will have to wait between 20 and 40 minutes, and a __75__% chance that customers will have to wait longer than 40 minutes. * What is the average number of reneges? There is a 95% chance that at least _9__ of customers will renege daily. There is a 65% chance that no more than _6__ customers will renege daily.

Model 2 * If Dr. Shulke were to hire vet assistant, hence, improving service time, how do outputs “1” – “4” in above (Assignment Week 3) change? * How many patients per day does the clinic serve on average? There is a 95% probability that _29__ or more clients will be served per day. * What are the average daily and annual profits from the business? There is a 95% chance that $__2,080___ or more profit will be made per day; and $__1,123,200___ or more will be made during the first year. * What are the average and maximum wait times? There is a __90__% chance that customers will have to wait 25 minutes or less, a _25__% chance that customers will have to wait between 20 and 40 minutes, and a ___0__% chance that customers will have to wait longer than 40 minutes. * What is the average number of reneges? There is a 95% chance that at least _3_ of customers will renege daily. There is a 65% chance that no more than __1___ customers will renege daily.

After comparing all distributions and numbers, you can see that hiring a veterinary assistant will have a big impact on all areas across the board. The biggest areas impacted would be average wait times, number of reneges and the annual profitability.

When taking a look at the wait times, when the doctor is alone, a patient has a max wait time of 133 minutes and minimum of 8 minutes. When compared to the veterinary assistant, a patient’s wait time goes from a max of 56 minutes to a min of 1 minute. Customers will be very happy to see a dip in the wait times at the office. In addition, with the veterinary assistant, there is a 95% chance that the wait time of a patient will be 28 minutes instead of the 95% chance wait time of 52 minutes when there is no assistant.

The other drastic area of change is the number of reneges. As stated previously, even when the hours were extended by Bill Schulke, he still had 2-5 patients not seen by him by the end of the day. The output data revealed that he has a max of 16 reneges that could leave in a day and a mean of 5. If a veterinary assistant would be involved, the number of reneges would drop almost by half to a max of 7 and the average of there being a renege patient goes down to just 1. In addition, it is noticeable that there is a 95% chance that there will only be 3 reneges when there is an assistant, but that number triples to 9 when it is the doctor alone.

Lastly, the biggest impact in results can be seen in the annual profit. With the doctor running the practice alone, he stands to make a maximum of $580,000 a year. Then you take into account hiring the veterinary assistant and that money doubles to a maximum of $1,123,200.

Conclusion and Recommendation
In conclusion, the answer to the problem statement is: a veterinary assistant should be hired. After taking a look at all the data and analysis, hiring an assistant for $45,000 a year would be a small price to pay in order to double profit and reduce wait times and reneges. A veterinary assistant would be a great addition and can be hired full time.

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