Operations Management for the Construction of Sheikh Jaber Al-Ahmad Term Paper

Operations Management for the Construction of Sheikh Jaber Al-Ahmad Hospital - Term Paper Example It has been found that this inefficiency can be attributable to the architects and contracting engineers who are responsible for the development of the construction plan including the type and quantity of materials to be used, the number of construction workers to be employed, and the duration of the project. Nevertheless, in many construction projects where quality has always been deliberately overlooked such that contractors make use of cheaper materials in order to earn more than to erect a high-quality facility, there is dire need to revamp the entire operations management in that the cause of this kind of unscrupulous approach may be detrimental to those who will use the facility at the end of the day. This paper will look at the case of the construction of the Sheikh Jaber Al-Ahmad Hospital and the kind of operations management needed to complete it economically while ensuring productivity and efficiency. In particular, this paper will talk about an important tool in operations management: Economics and Diseconomies of Scale†, which aims to contribute to solving problems involved in the construction phase of the Sheikh Jaber Al-Ahmad Hospital. ... Spreading the fixed costs, reducing construction cost, cutting cost of purchased materials, etc In the case of the construction of the Sheikh Jaber Al-Ahmad Hospital, economies of scale can be a great tool in order to spread the fixed costs (Dixit and Baldick 8). When purchasing materials for the construction, the contractors can take advantage of buying construction materials in bulk or in large quantities such that the fixed cost per one kind of construction material will be distributed to the number of it that has to be purchased; the higher the quantity, the lower the cost for each material would be because for suppliers, the initial set up capital would just be the same regardless of the quantity of the material they have to produce; what these suppliers will have is a marginal extra cost. This is one of many reasons for company mergers or takeovers. Implementing this concept in the construction of Sheikh Jaber Al-Ahmad Hospital, it would be just as certain that the construction cost will be reduced. Obviously, as contractors obtain a good deal in construction materials by taking more quantity at a significantly lower cost would bend the â€Å"extra† budget more on perhaps improvisation of the facility or for the operating cost of the hospital once it becomes operational. Also, when variable cost is cut down, it automatically reduces the entire construction cost considering that the costs of the purchased materials are also cut back. Diseconomies of Scale Purchasing in large quantities does not always entail efficiency. There are cases wherein economies of scale no longer work for a construction operation such that instead of a sustained decrease in fixed cost with