Application of simulation to facility planning utilizing an organization's forecasted growth strategy

This study proposes simulation as a tool for transforming forecasted data into information that leaders can use to make strategic decisions. This study focuses on a health system's strategic decision to meet future demand by either expanding an existing hospital or developing a new 700,000-square-foot, $500M-plus facility. The researcher extracted data from forecasting reports, translated the data into scenarios, and used a simulation package to test, modify, and retest each until a best-suited scenario was identified. Simulation indicated that existing facilities could not accommodate projected demand, delineated structural and financial requirements for a replacement facility, and projected profitability of the new site by service line, program of excellence, and facility. Results of the simulation were used to secure support from the Board of Trustees and funding from financial institutions. The organization initiated construction of the 365-bed facility in late 2008 with occupancy scheduled for early 2011.