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Justification of Vendor ROI For a Major Equipment Used In Radiology - Assignment Example
This report discusses the Linear Particle Accelerator which is also referred to as “Linac.” It is used frequently in the radiology department of hospitals around the world. It is a mode of treatment for curing Cancer. The report also highlights the relationship between cost justification and return on investment in detail from the manager’s point of view providing justification for the feasibility of the capital purchase or investment decision to be made to the Vice president of the company…
This paper approves that the hospital requires the capital purchase to be made because it will prove to be a good investment for the hospital. The hospital has a sufficient unutilized budget which it requires to spend on supplies and equipments. Including new equipment will increase the patients who require that facility. The radiology department of the hospital is one of the most expensive departments and requires highly powered equipment for the treatment of the patients.
The management has a sole objective of increasing the revenues. Therefore, this equipment would allow the management to increase its returns and expand its range of services offered by the hospital. Therefore this would not only allow the hospital to satisfy its customer in a better way as customers can have the services from radiology department from the same hospital.
The conclusion for this report is that the variance analysis is very necessary to analyze the proper allocation of the budget and getting proper returns. A variance report is the internal channel of communication between the top management and the line managers. It analyzes the efficient usage of the resources and the budget that has been allocated for a particular department.
Using the variance analysis the budget available for the department is utilized to the maximum for the perfect allocation of the resources on the employees and the equipment of the organization. Where new equipment is concerned the cost which is incurred, the fixed and the variable costs are analyzed to reach to the nearest estimation of the expenses. The minimum difference between the actual and the estimated expenses shows the accuracy of the estimation and the analysis conducted. ...