Simulation provides a useful tool for capacity plan ning and facilities management in the hospital envi ronment where experimentation is usually impractical. A typical example is the determination of the number of operating rooms and recovery-room beds required to handle an increased patient load. Simulation not only showed how large a facility was needed but also allowed experimentation with different policies for admitting patients to the surgical suite. Two strategies were simulated; one allowed a random in put, while the other gave priority to patients re quiring the longest surgery. The results of the GPSS model showed the importance of scheduling policy as the priority technique allowed a 25% reduction in the surgical workday, thus providing a large savings in manpower costs.