Laboratory Management 4th Long Exam Reviewer

material management

Systematic process of overseeing and controlling the acquisition and utilization of supplies to ensure both availability and cost effectiveness

material management

consists of purchasing and the oversight of products after they arrive

purchasing and stock room

two sections of material management

purchasing

oversees the ordering of supplies and the processing of invoices from vendors

stock room

maintains security and inventory levels and issues supplies throughout the facility

1. supplies arrive in a timely manner

2. spoilage is reduced to a minimum

3. back orders and delays are avoided

4. storage space is used to the best advantage

5. the most economically advantageous price is observed

goals of material management

1. over-replenishment

2. when staff prefer to use fresh supplies over near-expiry supplies

two scenarios leading to spoilage

1. open communication

2. gentle follow-up of suppliers

how can back orders and delays be avoided

supplies

items that are consumed within 1 year or have a shelf life of less than 1 year

yes, if they are items below a certain price level as established by the controller

can items with shelf lives over 1 year be considered supplies? why or why not?

supply ordering process

several documents used to expedite and simplify the record-keeping process

purchase order, traveling requisition, standing orders

what are the different documents relating to supplies

product standardization committee

the people behind the selection of supplies

product standardization committee

their job is to ensure that the best product is obtained, to avoid duplication of products

FALSE, the product standardization committee is composed of representatives from ALL areas of the organization

TRUE/FALSE: the product standardization committee is composed of representatives from select areas of the organization

product standardization committee

standardize the supplies that will be used by the whole hospital

product standardization committee

canvas for supplies and decide which supplier to buy from

TRUE. quality may be compromised as long as the service itself isn't

TRUE/FALSE: quality may be compromised in choosing supplies

product standardization committee

resolve differences between preferences in areas that may share a common product

product standardization committee

develop standards for selection and quality assurance

product standardization committee

weigh in the options in buying materials to reach the break-even point and arrive at targeted profit

purchase order

a document authorizing the purchase of a product or services from a vendor

Traveling requisition

a catalog of products used to order supplies stocked by material management

standing orders

a purchase order issued for a product or service to be delivered according to a preset schedule

1. perpetual system

2. periodic system

3. random checks

types of inventory level checks

perpetual system

keeps account of the inventory each time a product is used or removed from inventory

census or tally sheet

what does a perpetual system use to keep track of inventory

periodic system

inventory levels are checked according to an established timetable or schedule

random checks

a method used to verify inventory levels

1. minimum-maximum

2. just-in-time

types of stock replenishment techniques

minimum-maximum

establishes a set point at which inventory is to be recorded and a "recorder to" level to be maintained just in time

just-in-time

commitment by the supplier to guarantee delivery of an item at the exact moment of need

viable or special tests

just-in-time is effective for what type of test

routine test

just-in-time is ineffective for what type of test

economic ordering quantity

what does EOQ mean

EOQ

formula used to determine the quantity of supplies to order at one time

EOP

the point at which inventory should be reodered

economic ordering point

what does EOP mean

optimal reorder time

what does ORT mean

ORT

the best time to place an order to take advantage of EOQ and EOP

annual usage

based on the workload of the laboratory and can also be based on the previous year

amount of supplies ordered in a year/365 years

average daily use formula

expenses of the purchasing section/number of purchase orders issued

cost of ordering formula

amount of supplies ordered in a year/365 days

average daily use formula

cost of ordering

expenses of the purchasing section/number of purchase orders issued

annual holding cost

based on bulk orders, space utilization and whether it is better to have the product on hand or in the supplier's warehouse

purchase price/container size

cost per unit formula

lead time

it influences the minimum inventory that must be kept in stock as well as the quantity that needs to be requested

lead time

amount of time or advance notice needed between placing an order and its arrival

budgeting

planning, forecasting, controlling, and monitoring the financial resources of the organization

budgeting

it is through this that an organization turns its strategic plans into daily operations

budget

serves as a tool and a benchmark for monitoring the performance of the organization throughout the fiscal year

operational budgeting

planning for the laboratory as an ongoing business concern

operational budgeting

accounting for everyday needs and expenditures

operational budgeting

represents the financial parameters of the laboratory's goals for the coming year

capital budget

acquisition and completion of specific equipment and building projects that require major financial commitment

1. forecast budgeting

2. flexible budgeting

3. zero-based budgeting

types of operational budgets

projection method

forecast budgeting is also known as

forecast budgeting

projection method is also known as

forecast budgeting/projection method

based on a forecast of what is expected to occur during the next period

forecast budgeting/projection method

this makes projections of the increases or decreases that will occur on each line item in the budget based on historical information and adjustment for anticipated changes

flexible budgeting

set expenditures based on a variable workload volume

zero-based budgeting

analyzes needs based on prioritizing of goals and objectives and not on past allocations

-time frame

-forecasting stage

-scheduling stage

-synthesis of information

issues that must be addressed in preparing an operational budget

time frame

an annual budget, which covers 1 year, is the main working guideline for management

-shifts in patient mix or volume

-changes in medical staff composition

-expansions or cutbacks in services offered by the hospital/laboratory

-population fluctuations

factors to consider in the forecasting stage

6 months before the beginning of a new budget year

when do most institutions start the operational budget preparation process

synthesis of information

tells how the financial information is organized and is very important in budget preparation

-actual costs

-ratios

-percentage calculations

three methods of obtaining future budgeting figures

actual costs

refers to the actual expenditure including market price, delivery, and setup price

ratios

this is the total expense divided by the total income

percentage calculations

allocating parts on your income to your operation expenses for the coming months

pro forma budget

a budget based on the extrapolation of historical data

pro forma budget

this calculation projects the income and outflow for the incoming months

capital budgeting

process used by organizations to plan, evaluate, and choose between future investment opportunities

capital budgeting

this is a mechanism where a laboratory selects and authorizes the purchase of major equipment and building projects

1. identifying investment opportunities

2. evaluating investment proposals

3. choosing a profitable investment

4. capital budgeting and apportionment

5. performance review

5 steps in capital budgeting

-capital item

-time criteria

-price criteria

-purpose criteria

4 issues in capital budget preparation

1 year

the usual time frame for a capital item

price criteria

represent the characteristics of a customer or deal

purpose criteria

where will be the budget intended for either capital project or operational budget

capital project

this purpose criteria mainly focuses on purchasing new instruments, furniture, or building projects under several tax rules

operational budget

this purpose criteria mainly focuses on repairs or a replacement of part of an existing equipment or structure

-projects costing less than a set limit

-projects costing above the set limit

two parts of a capital budget according to the amount of expenditure

minimal paperwork

projects costing less than a set limit require...

extensive in-depth anaylsis

projects costing above the set limit require...

certificate of need

what does CON mean

CON

a document issued by a government regulatory body to authorize a capital project

CON

established in an attempt to control spiraling medical costs

CON

established to avoid duplication of services and overbuilding of needs

-narrative tools

-quantitative tools

two types of analysis used to evaluate capital expenditure

instrument/project capital proposal

needed to evaluate capital expenditure

-justification

-prioritization

-opportunity costs

types of narrative tools

justification

explanation why the project is needed, how it will benefit the laboratory, and why it should be considered over competing projects

1. is it necessary to maintain present service levels?

2. will it provide significant savings over current

3. will it enhance or improve current programs?

4. will it offer new procedures or services?

4 categories proposal justifications can be grouped in

prioritization

giving relative importance or urgency of the project

opportunity cost

value of what is given up in order to pursue another project

1. Payback Period

2. ARR

3. Net present value

4. internal rate of return

5. required rate of return

types of quantitative tools

payback period

the length of time it will take to recover the cash outlays for a project

payback period

the simplest method for calculating the return on an investment