Health Camp Budget Under an Unconfirmed Offer
The health section of a municipality has Rs 140,000 for a one-day free health camp. Fixed costs are Rs 18,000 for tents and chairs and Rs 12,000 for transport. Each doctor is paid Rs 6,000 per day; each health worker Rs 3,000 per day. The team must have at least 2 doctors and 4 health workers. Medicines cost Rs 220 per patient, but the supplier offers a 10% discount on the medicine bill if the order is at least 300 patient kits; VAT of 13% is added after discount. The section expects 350 patients. A local club offers to cover the medicine VAT if the camp serves at least 320 patients, but its written confirmation has not arrived. The chief asks whether the budget is enough for 350 patients with 3 doctors and 6 health workers, and if not, what the maximum number of patients is while keeping the same staff and the 300-kit discount threshold.
1. Is Rs 140,000 enough for 350 patients with 3 doctors and 6 health workers if the club’s offer is confirmed? Show the calculation.
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Fixed cost = 18,000 + 12,000 = Rs 30,000. Staff cost = (3 × 6,000) + (6 × 3,000) = 18,000 + 18,000 = Rs 36,000. Non-medicine total = 30,000 + 36,000 = Rs 66,000. Medicine before discount = 350 × 220 = Rs 77,000. Discount = 10% of 77,000 = Rs 7,700, so net medicine = Rs 69,300. VAT = 13% of 69,300 = Rs 9,009, so gross medicine = Rs 78,309. If the club covers VAT, the budget bears only Rs 69,300. Total charge = 66,000 + 69,300 = Rs 135,300. Budget = Rs 140,000, so surplus = Rs 4,700. Answer: yes, it is enough - but only if the club’s confirmation is in writing before the order is placed.
2. If the club’s letter does not arrive, what is the shortfall at 350 patients, and what is the maximum number of patients the budget can support without reducing staff?
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Without the club, the budget must bear the VAT. Total = 66,000 + 78,309 = Rs 144,309. Shortfall = 144,309 − 140,000 = Rs 4,309.
For the maximum number, first find the money available for medicine: 140,000 − 66,000 = Rs 74,000. With the 300-kit discount, cost per patient = 220 × 0.90 × 1.13 = Rs 223.74. Divide: 74,000 ÷ 223.74 = 330.74. Round down to 330 patients, because a fraction of a patient cannot be served.
Check: 330 × 223.74 = Rs 73,834.20; total = 139,834.20, within budget. At 331 patients, medicine = Rs 74,057.94; total = 140,057.94, which exceeds the budget. Also, 330 is above the 300-kit threshold, so the discount assumption is consistent.
Answer: shortfall Rs 4,309; maximum 330 patients.
3. Recommend a decision to the chief, considering the unconfirmed letter and the 300-kit threshold.
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Treat the club’s offer as contingent, not as available budget. Recommend either (a) obtain written confirmation before ordering 350 kits, or (b) plan for 330 patients and order 330 kits, which stays within Rs 140,000 and still qualifies for the discount. Do not reduce doctors below 2 or health workers below 4 merely to fit 350 patients; that changes the service standard the chief has set. If the political target is 350, ask for a contingency of at least Rs 4,309 or a small reallocation, and record the decision and its source. Do not order 350 kits on an oral promise: if the letter fails, the office faces an unauthorised excess. The message to the club should state the exact condition, the number of patients, and a deadline for written confirmation.