An (s, S) Inventory Optimization Problem (original) (raw)
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Modelling and analysis of healthcare inventory management systems
OPSEARCH, 2019
The core competency of the healthcare system is to provide treatment and care to the patient. The prime focus has always been towards appointing specialized physicians, well-trained nurses and medical staffs, well-established infrastructure with advanced medical equipment, and good quality pharmacy items. But, of late, the focus is driven towards management side of healthcare systems which include proper capacity planning, optimal resource allocation, and utilization, effective and efficient inventory management, accurate demand forecasting, proper scheduling, etc. and may be dealt with a number of operations research tools and techniques. In this paper, a Markov decision process inventory model is developed for a hospital pharmacy considering the information of bed occupancy in the hospital. One of the major findings of this research is the significant reduction in the inventory level and total inventory cost of pharmacy items when the demand for the items is considered to be correlated with the number of beds of each type occupied by the patients in the healthcare system. It is observed that around 53.8% of inventory cost is reduced when the bed occupancy state is acute care, 63.9% when it is rehabilitative care, and 55.4% when long-term care. This may help and support the healthcare managers in better functioning of the overall healthcare system.
An innovative model to optimise inventory management: a case study in healthcare sector
International Journal of Services and Operations Management, 2017
In the age of competition, no industry can survive without pondering much about reducing expenditures wherever possible. Management of inventories represents one of the most important areas in business, trade and industry. The scheduling of production lots, as well as their sizing, is an area of increasing research attention within the wider field of production planning and scheduling. In the present paper a new mathematical model to find the target stocking level which minimises the total cost of the system while satisfying the service level constraint is presented. Starting from the analysis of inventory management models in literature, a completely original model has been developed and applied to a real case in healthcare sector. The analysis of the results, arising from the case study, allowed to evaluate the effectiveness of the proposed models and to highlight the differences. Nevertheless the proposed model has characteristics of generality that allow the application in other areas.
Developing Inventory Management in Hospital
International Journal of Supply Chain Management, 2015
Single inventory policy has been applied to entire types of drugs in hospitals, despite several different drug and demand characteristics. Shortages regularly occur, which may affect patients' lives, especially when vital drugs are being administered to them. However, hospitals cannot store a large amount of every drug because of limited space and budget. The objective of this study was to develop a hospital inventory management system to minimise the total inventory costs, while maintaining patient safety levels. The study is concerned only with the medicines that have a high consumption value and took place in a large public hospital in Thailand. The most suitable policies are proposed for each drug category with the best performance obtained. The historical demand is classified by drug characteristics, consumption value and clinical importance, as well as the demand characteristics. We applied it and compared it with the current inventory policy (Min/Max), and inventory policies from previous studies, in order to investigate the most suitable inventory policy for each drug category and demand characteristic. The study found that a single inventory management system cannot be effectively applied for all medicines. It is because there are also categories of medicines characterised by their value and clinical importance. This is called the ABC/VEN classification. The inventory management in hospitals should be fitted to drug categories and demand characteristics, which are quite unique in the healthcare supply chain and are different from those applied to general manufacturing.
Modelling and analysis of inventory management systems in healthcare: A review and reflections
Computers & Industrial Engineering, 2019
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Pharmaceutical Inventory Management Issues in Hospital Supply Chains
2nd Global Conference for Academic Research on Management and Economics, 2012
The primary focus of the healthcare sector is to provide patients with the best quality of care. While the healthcare cost is keep on growing, effect ive healthcare supply chain should be achieved to reduce some unnecessary costs. To address this issue, this study aims to examine inventory management practice in one of Indonesian public hospital and focus on the role o f inventory to drive hospital supply chain performance. Th ree major issues regarding inventory management practice has been identified such as overstock, unjustified forecasting technique and lack of IT support. Proposed (s,Q) policy using continuous review can reduce by 50% total inventory value on hand of oncology medication. Among several forecasting technique that's presented, Holt's model appears to be the best adapted for oncology medication. Future study is needed to simu late the outlook condition using proposed policy. By imp lement ing a new inventory policy that cope all the constraints and problems will help hospital to manage its pharmacy inventory in effective and efficient way.
A high level of service for medical supplies and effective inventory policies are essential objectives for all health care industries. Medicine shortages and improper use of pharmaceuticals can not only lead to financial losses but also have a significant impact on patients. Many health systems and hospitals experience difficulties in achieving these goals as they have not addressed how medicines are managed, supplied, and used to save lives and improve health. Studies are essential to understand operations in health care industries and to offer decision support tools that improve health policy, public health, patient safety, and strategic decision-making in the pharmaceutical supply chain. We present an inventory model that integrates continuous review with production and distribution for a supply chain involving a pharmaceutical company and a hospital supply chain. The model considers multiple pharmaceutical products, variable lead time, permissible payment delays, constraints on space availability, and the customer service level (CSL). We develop a procedure for determining optimal solutions for inventory lot size, lead time, and the number of deliveries to achieve hospital CSL targets with a minimum total cost for the supply chain. A numerical example illustrates the model application and behavior.
Inventory Management Applications for Healthcare Supply Chains
International Journal of Supply Chain Management, 2017
Recently, the healthcare industry has started using inventory management applications to achieve efficiency and effectiveness in its supply chains. There is a rapid growth in the demand of drugs and diagnostic systems within the healthcare industry. The biggest challenge for health care supply chains is to manage inventory efficiently and keep up the satisfactory service level at the same time. In order to meet the increased demand of healthcare products, healthcare supply chain professionals must find efficient and effective ways to improve and optimize inventory. Moreover, perishability and disposability of many medical products have been major problems in healthcare supply chain management. The current managerial practices and conflicts among different stakeholders in health care supply chains are directly associated with the issue of inventory management. This literature review will introduce various inventory management applications that are mainly focused on minimizing invento...
Global inventory control in an academic hospital
International Journal of Production Economics, 1996
During a recent study concerning the global inventory control in an academic hospital we faced the problem of a hospital management that wanted a very simple inventory control model, with good performance. It was required that the members of the purchase department could understand the model and also that the model's control parameters could be determined in a simple way, because of the database environment of the inventory control system. Since most items have a joint supplier and the orders for a certain supplier are always placed on the same day of the week we extended an EOQ model to a so-called (R, s, c, S) model, in which the values of the control parameters s, c and S are determined in a very intuitive way. To our surprise, the performance of this rule was comparable to that of a rule in which the control parameters were determined in a more sophisticated way.
Annals of Operations Research, 2020
Inventory management of surgical instruments and material handling decisions of perioperative services are critical to hospitals’ and operating rooms’ (ORs) service levels and costs. However, efficiently coordinating these decisions is challenging due to their interdependence and the uncertainties faced by hospitals. These challenges motivated the development of this study to answer the following research questions: (R1) How does the inventory level of surgical instruments, including owned, borrowed and consigned, impact the service level provided by ORs? (R2): How do material handling activities impact the service level provided by ORs? (R3): How do integrating decisions about inventory and material handling impact the service level provided by ORs? Three discrete event simulation models are developed here to address these questions. Model 1, Current , assumes no coordination of material handling and daily inventory management operations. Model 2, Two Batch , assumes partial coordi...
Jurnal INTECH Teknik Industri Universitas Serang Raya
The problem that often occurs in raw material inventory is overstock or stockout conditions. The healthcare industry, including pharmaceuticals, has been experiencing uncertainty since the Covid-19 pandemic. Then impacts panic buying and stockpiling, which can lead to unpredictable spikes in demand, stockouts, and disruptions to the inventory system. The research was conducted at ABC Pharmacy in Yogyakarta, which experienced this problem. In this study, optimization of drug supply was carried out by measuring warehouse capacity, and safety stock, increasing the number of orders and reorder points using the Min-Max and the economic order quantity models. A simulation of inventory optimization planning was carried out using Monte Carlo to see inventory projections for the next three months. Overall, the EOQ model simulation shows the most optimal results by showing the average total inventory cost of Rp. 103,579, where this number represents the lowest number of total inventory cost...