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Adding additional capacity to meet the unmet market need may upset the existing work force and lower service quality. Failing to meet the market demand may invite competition that could eventually cause Shouldice to loss market share and end up with excess capacity.
There is limited operating facts presented in the case so assumptions have made based on the information that was presented.
It is assumed that they are operating at the “best operating level” because the way the case describes how efficiently the hospital is ran and how the patients appear to be pleased with there treatment...
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