TITLE:
Perishable Inventory Management in Healthcare
AUTHORS:
Yael Perlman, Ilya Levner
KEYWORDS:
Supply Chain; Inventory Management; Perishable Inventory; Outsourcing
JOURNAL NAME:
Journal of Service Science and Management,
Vol.7 No.1,
February
7,
2014
ABSTRACT:
This study addresses a problem
encountered in a nation-wide, large-scale healthcare supply chain that
comprises several hundred medical organizations (hospitals, clinics,
pharmacies, etc.) and provides highly advanced medical care to several million
people. The medical products in the system are perishable, meaning that they
become unusable beyond a certain expiry date. It is necessary to track the ages
of units in stock and to plan and control the inventory accordingly. The models
developed herein represent a multi-echelon, multi-supplier inventory system and
unite together aspects of perishability and outsourcing under deterministic
demand for medical products, which include both perishable and deteriorating
goods. The objective of the study is to determine the optimal number of
products to be purchased from regular and outsource suppliers so as to meet the
required demand at the minimum operating cost. The solution is a network-flow
model that can be used to determine the trade-off between the quantities of
items to be ordered from the two types of suppliers in each time period. In
addition, the study analyzes different distribution policies to account for the
perishable nature of the products. Further insights are obtained by applying
the model to a case study of a real-life healthcare supply chain from which interesting results are
drawn.