How many beds must be allocated to a specific clinical ward to meet production targets? When budgets get tight, what are the effects of downsizing a nursing unit? These questions are often discussed by medical professionals, hospital consultants, and managers. In these discussions the occupancy rate is of great importance and often used as an input parameter. Most hospitals use the same target occupancy rate for all wards, often 85%. Sometimes an exception is made for critical care and intensive care units. In this paper we demonstrate that this equity assumption is unrealistic and that it might result in an excessive number of refused admissions, particularly for smaller units. Queuing theory is used to quantify this impact. We developed a decision support system, based on the Erlang loss model, which can be used to evaluate the current size of nursing units. We validated this model with hospital data over the years 2004-2006. Finally, we demonstrate the efficiency of merging departments. © 2009 The Author(s).