Cost-Benefit Analysis of Computer Systems in Community Hospital Food Service

Cost containment has always been a major concern to managers. Therefore, any system which decreases costs by reducing labor time is given serious evaluation.A five week comparison was made between financial record keeping by the manual method and by the computerized method. A continuous time study was utilized to make this comparison.Over the five weeks, an average overall time savings of 245 minutes for the computerized versus the manual method was observed. The net savings to the institution was 223 minutes per week which translates to approximately $140.00 per month over a 5 year period.The rapid payback period of 1 year and 5 months for the purchase of the computerized system, using a 12% Cost of Capital figure, presents the automation as a serious alternative. Thus, the labor cost savings to the institution along with the profitable payback period make it very desirable to convert to a reasonably priced computerized system.