Budget allocation for permanent and contingent capacity under stochastic demand

Abstract

We develop a model of budget allocation for permanent and contingent workforce under stochastic demand. The level of permanent capacity is determined at the beginning of the horizon and is kept constant throughout whereas the number of temporary workers to be hired must be decided in each period. Compared to existing budgeting models, this paper explicitly considers a budget constraint. Under the assumption of a restricted budget, the objective is to minimize capacity shortages. When over-expenditures are allowed, both budget deviations and shortage costs are to be minimized. The capacity shortage cost function is assumed to be either linear or quadratic with the amount of shortage, which corresponds to different market structures or different types of services. We thus examine four variants of the problem that we model and solve either approximately or to optimality when possible. A comprehensive simulation study is designed to analyze the behavior of our models when several levels of demand variability and parameter values are considered. The parameters consist of the initial budget level, the unit cost of temporary workers and the budget deviation penalty/reward rates. Varying these parameters produce several trade-off between permanent and temporary workforce levels, and between capacity shortages and budget deviations. Simulation results also show that the quadratic cost function leads to smooth and moderate capacity shortages over the time periods, whereas all shortages are either avoided or accepted when the cost function is linear.

Flexible nurse staffing based on hourly bed census predictions

“…Workforce flexibility is considered a powerful concept in reducing the required size of the workforce and increasing job satisfaction (Burke et al, 2004;Dellaert et al, 2011;Gnanlet and Gilland, 2009;Griffiths et al, 2005;Jack and Powers, 2009;Siferd and Benton, 1992;Smith-Daniels et al, 1988;Stewart et al, 1994). To adequately respond to variability in patient demand, various types of flexibility are suggested, including the use of part-time employees, overtime, temporary agency employees, and float nurses.…”

Integrated decision making in healthcare : an operations research and management science perspective

“…Workforce flexibility is indicated as a powerful concept in reducing the required size of workforce [74,127,202,451]. To adequately respond to patient demand variability and seasonal influences, it pays off to have substitution possibilities of different employee types, to use overtime, and to use parttime employees and temporary agency employees [451].…”

“…Methods: computer simulation [7,19,104,108,112,156,157,206,221,222,238,241,242,243,244,259,292,295,347,371,372,373,375,415,439,478,497,517,519,523,524], heuristics [309], Markov processes [7,68,172,192,199,245,246,247,335], mathematical programming [127,202,241,318,327,375,376], queueing theory [11,29,…”

“…Staffing levels need to be set both for each care unit's dedicated nurses and for flexible staff in floating pools [309]. Also, [127,222] investigate the potential of on-call nurses who are planned to be available during certain shifts and only work when required.…”

“…Methods: computer simulation [222], heuristics [309], mathematical programming [32,127,507,525], queueing theory [463], literature review [74,166,231,289,399,451].…”