The Royal London Hospital administrators have 28 nurses to schedule. Suppose the demand uncertainty is uniformly distributed between the lower and upper bounds specified in Table 1.

Table 1: The demand for nurses is uncertain (uniform distribution)

The demand for the nurses cannot be guaranteed to be satisfied completely by scheduling the 28 nurses. The hospital administrator’s objective is to minimize the probability of understaffing over all shifts.

1. Scenario Analysis [30 marks]

• State the key risk factors
• State the performance measure (the total number of shifts in a day that experience understaffing) using the key risk factors
• Using the Excel model, determine the best-case and worse-case

2. Getting Ready for Simulation [30 marks]

• To perform simulation analysis, we need to identify an appropriate distribution to model each of the risk factors. Determine an appropriate distribution and their parameters for each of the risk
• State the steps that you would take to run the simulation
• What are some benefits of running simulations compared to performing scenario analysis or sensitivity analysis?

3. Simulation Analysis [40 marks]

Each nurse can cover two shifts, meaning 56 shifts can be covered. Suppose you examine the nurse schedule shown in Table 2.

Table 2

3. Risk Profile for each Decision [30 marks]

• Examine the risk profile for FiveGrains with the action with £1m, and without

• If the demand turns out to be high, what is the expected profit with and without the action?
• If the demand turns out to be low, what is the expected profit with and without the action?

If the FiveGrains cannot afford to lose money, which decision would you recommend?