Part A:
1- Considering the same parameters for all stages of the process (slides 30 to 33) and the same duration of the simulation replica (20 days, working 24x7h), make a comparison on the following indicators between a model created in FlexSim and another in Arena:
1- Average duration of each request in the modeled process
2- Average cost of reviewing a request
3- Maximum review time for a request
4- Maximum number of applications awaiting review
5- Percentage of occupation of the risk manager
Part B:
2- Implement the modifications discussed in following 2 Exerciseds with Arena or FlexSim, and comment on how this affects the maximum number of requests that come to be under review.
Exercise 1: Add a new filter or control task (process in the tool) prior to the review of the mortgage application The filtering time is a minimum of 20 minutes (m), with 25m being normal, and a maximum of 50m Assign a Receptionist to carry out the filtering. The cost per hour of this worker is 6.75/hour
Exercise 2: Return some requests after the filtering process of the previous exercise 8% of the requests do not pass the filter Now the percentage of requests that, once filtered, are approved goes from 88% to 94% and the review time is reduced by 10% How do these changes affect the cost of the process? And the total review time of an application? Try to respond to the same points as in the previous exercise: percentage of occupancy of the risk manager, number of requests waiting, etc.
3- The formula to obtain the cycle time of a section of a process in which there is a rework, that is, a part of the process in which with probability r, a set of tasks with a duration of time T would have to be performed again. (see figure), is given by the expression T1r.
Build a new model, in Arena or FlexSim, that allows you to verify that, indeed, the execution times of a rework are close to the value obtained after applying the formula. You can freely choose the processing and arrival times between entities. The model has to be very simple and consist only of a process with a task that can be iterated again with probability r.
Ordinarily, why would times be different in reality? Think about the justifications that exist for using models and simulation techniques, and what parameters of those used in the example models on the transparencies, you would not specify in the requested model so that the times of the formula and those obtained after the executions coincide ( or were very similar).
In your model, and in light of the simulation results obtained in your model and with the time parameters that you have established, would you be able to determine how many resources (units) would be necessary so that the times of the formula and those of a model that used resources Would they also coincide?
The Social Problem of Pharmaceutical Drug Pricing: A Market Analysis
Introduction
The pharmaceutical industry is often at the center of discussions about social problems related to free-market functionality, particularly concerning drug pricing. In many countries, the market for pharmaceutical drugs does not operate under the principles of a free market, leading to significant issues such as affordability, accessibility, and ethical dilemmas. This paper explores the social problem of pharmaceutical drug pricing, examines how free-market principles could be introduced to alleviate the issue, and discusses the risks associated with applying these principles within a context fraught with ethical concerns. Additionally, it addresses the role of government in maintaining ethical business practices in the pharmaceutical sector.
The Social Problem of Pharmaceutical Drug Pricing
Pharmaceutical drug pricing represents a significant social issue, particularly in countries like the United States, where prices can be dramatically higher than in other nations. The complexities surrounding drug pricing arise from a combination of factors including:
1. Research and Development Costs: The high costs associated with developing new drugs, which can span millions or even billions of dollars, are often cited as reasons for elevated prices.
2. Market Exclusivity: Patent protections allow pharmaceutical companies to maintain monopolies on new drugs for many years, limiting competition and enabling high prices.
3. Insurance and Reimbursement Structures: The involvement of insurance companies creates a disconnect between consumers and actual drug prices, leading to situations where patients are unaware of the costs until they attempt to fill a prescription.
These factors contribute to a market where supply and demand do not function effectively, resulting in a mismatch between the availability of essential medications and their affordability.
Introducing Free-Market Features
To alleviate issues related to pharmaceutical drug pricing, introducing features of a free market could help create a more efficient allocation of resources. Here are several potential strategies:
1. Increased Competition: Allowing generic drugs to enter the market more quickly after patent expiration could foster competition and drive down prices. Streamlining the approval process for generics would enable lower-cost alternatives to reach consumers sooner.
2. Transparent Pricing: Implementing regulations that require pharmaceutical companies to disclose prices and costs associated with drug production could empower consumers. Transparent pricing allows patients to make informed choices, driving competition between companies for lower prices.
3. Market-Based Approaches to Drug Development: Encouraging private investment in drug research through tax incentives or grants could stimulate innovation while reducing reliance on monopolistic pricing strategies.
4. Direct-to-Consumer Sales: Allowing consumers to purchase medications directly from manufacturers or through online platforms could cut out intermediaries and lower prices.
Risks of Introducing Market Mechanisms
While introducing market mechanisms may provide some benefits, there are significant risks associated with applying free-market principles in the pharmaceutical sector:
1. Ethical Concerns: The commodification of life-saving drugs raises ethical questions about profit motives versus patient welfare. When profit becomes the primary driver of drug pricing, access can become inequitable, particularly for vulnerable populations who may be unable to afford necessary medications.
2. Quality Assurance: Increased competition may lead some companies to cut corners in research or production processes to lower costs, potentially compromising drug safety and efficacy. Effective regulatory oversight is essential to ensure quality standards are maintained.
3. Market Failures: Health care markets have unique characteristics that can lead to market failures, such as information asymmetry between consumers and producers. Patients may lack the knowledge necessary to make informed decisions about treatment options, complicating the operation of a free market.
4. Regulatory Capture: There is a risk that powerful pharmaceutical companies could influence regulatory bodies to enact policies that benefit their interests rather than public health.
Role of Government in Maintaining Ethical Business Practices
The government plays a crucial role in ensuring ethical practices within the pharmaceutical industry through regulation and oversight. Key functions include:
1. Regulation of Drug Pricing: Governments can intervene in instances where prices become prohibitively high by setting price caps or negotiating prices with pharmaceutical companies.
2. Promotion of Transparency: Regulators can mandate transparency in pricing and clinical trial results, ensuring that patients have access to comprehensive information about medications.
3. Support for Research and Development: Governments can provide funding for public research initiatives that focus on developing affordable medications for diseases that may not attract significant private investment due to limited profitability.
4. Consumer Protection: Regulatory agencies such as the Food and Drug Administration (FDA) in the U.S. monitor drug safety and efficacy, ensuring that consumers are protected from harmful products.
Conclusion
Pharmaceutical drug pricing is a significant social problem where free-market principles are not functioning effectively. By introducing competition, transparency, and direct consumer engagement into the market, there is potential for alleviating some of the issues surrounding drug affordability and access. However, these strategies must be approached cautiously due to the ethical concerns inherent in healthcare markets. The government's role in regulating this industry is vital in maintaining ethical standards and ensuring that patient welfare remains a priority over profit. Balancing market forces with ethical considerations is essential in creating a more equitable healthcare system that provides access to necessary medications for all individuals.