Economic Models - Convex Optimization

Health Service Management 153
increase, say R i , is considered. It should be noted that in some groups, this
rate is well above the rate of inflation growth, and the rate stated in the
collective wage and salary agreements for each employees group. These
rates of annual salary increase for all groups are presented in Table 3.
Denoting by A 0 (i) the annual salary of all members of group i at the base
year t 0 , and the final annual salary at year t 5 for all members of the same
group, denoted by A n (i), is computed from:
(
A n (i) = A 0 (i) 1 + R ) 5
i
. (1)
100
Thus for group 1, where R 1 = 6.5%, the final salary for all group members
will be:
A n (1) = 260(1 + 0.065) 5 = 356.222.
It should be noted, that these rates of salary increases have been formed
in accordance to the personnel claims. Other additional expenses for the
final year of of the planning period are presented in Table 2.
On the top of Table 2, the forecast regarding the expected number
of patients for the final year is stated. It should be pointed out that not
all patients necessarily need an axial-tomography and/or X-ray treatment.
That is why the average per patient cost stated in Table 2 seems to be
relatively low.
The interactive voice response (IVR) systems which are effectively used
in healthcare and hospitals are described by Mouza (2003). It should be
noted that replacement expenses together with expenses for obtaining new
devices, seems more reasonable to be equally distributed over the five years
of the planning period. Needless to say, that in case of replacements, the
estimated salvage on old equipment has to be subtracted from the relevant
cost. Thus, at the final year, only one fifth of such expenses is stated. For the
case under consideration, the replacement refers to the server of the local
area computer network (LAN), together with two stations. Their net cost
sum up to 2000, which has been equally spread over the five years of the
planning period.
From Table 1, I computed the average salary per employee at the final
year which, when multiplied by the group size gives the total salary for the
corresponding group, as it can be verified from Table 3.
It can be seen from Table 3, that X i (i = 1,...,10) denotes the size (i.e.,
the members) of group i and c i , the average salary of each group member.
Thus, the total salary of all the members of group 1, for instance, can also