Describe Some Limitations of Inventory Ratio Use in Hospitals

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The Answer is All ratios are meaningless unless they are tracked and measured over time. They require points of comparison and measurement across time. Second, there have to be average values and standard deviations that are expected for each metric. Tracking the ratio monthly relative to the average and minimum-maximum standard deviations provides very useful information that allows application of exception management and looks for red alerts and potential problems. Third, comparison of ratios for organizations other than hospitals is meaningless. ratios have to be tracked relative to other hospitals in the industry. Fourth and most important, if inventory is not consistently and comprehensively measured in each location, it is impossible to produce valuable statistics. Hospitals must benchmark against other facilities using the same accounting and valuation techniques.

Describe Some Limitations of Inventory Ratio Use in Hospitals

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