The extra costs for a back-up unit do not ap-
pear to be large until they are compared with
revenue for the system. For Alfalfa County, as-
suming a charge of $25 per call plus $1 per mile
one way with 80 percent of the users paying
their bill, approximately $18,000 is received
each year. Thus, the one-unit system incurs an
approximately yearly loss of $21,000 without a
back-up unit. The cost for the back-up unit
would increase the yearly loss about $8,000.
The back-up ambulance can reduce the
probability of overlapping need for the avail-
able ambulance from approximately once
every 400 calls to approximately once every
8000 calls, i.e., P(>3). Whether this protection
is worth $8,000 is the decision the local people
must make. The back-up unit, in addition to
providing reserve coverage for overlapping
calls, provides coverage during down time for
the primary ambulance and may generate
some revenue from interhospital transfers or
other nonemergency uses which would other-
wise be foregone. Such uses are rare, however,
and would not basically change the fiscal situa-
tion.
SUMMARY AND CONCLUSIONS
The method illustrated can be used to derive
the annual number of calls consistent with a
given probability that the number of service
demanders will exceed the number of service
facilities. A reverse method can be used to
determine the expected probability of capacity
being exceeded associated with a given number
of annual calls. In either case, beginning with
an estimate of average service time, an objec-
tive procedure can be applied to a decision that
otherwise would be very subjective. As local
decision makers continue to be urged to
provide additional emergency services in rural
areas, information from this technique, in con-
junction with budgets and models to predict
usage, will be extremely useful in rural decision
making.
REFERENCES
[1] Doeksen, Gerald A., Jack Frye, and Bernal L. Green. Economics of Rural Ambulance Service
in the Great Plains, USDA, ERS, Agricultural Economics Report No. 308, November 1975.
[2] Saaty, Thomas L. Elements of Queueing Theory with Applications. New York: McGraw-Hill
BookCompany, Inc., 1961.
123
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