Optimization in Pharmaceutical Supply Chain Inventory Management for Disaster Planning

Abstract

Drug shortages and improper medical inventory management disturbs the pharmacy supply chain (PSC) leading to poor healthcare service with high cost. Many pharmacies and hospitals experience difficulties in achieving proper inventory control as they have not addressed how medicines are managed, supplied, and used. Another important factor in the PSC are unknown events such disaster that creates enormous losses. PSC carries high responsibility since it is critical that the proper drugs are used at the right time and condition. Medicine and drugs are needed most during natural disasters. Preparation for such events must become a priority. To increase the resilience of a PSC for disasters, an inventory control model is developed in this study using mathematical programming techniques. The proposed model considers various types of medications, expiration dates of products, the lead time, ordering size, holding and shortage cost, and the customer service level. The corresponding solution determines the optimal preparation time and inventory level in the disaster preparation phase with the minimum overall cost. A scenario of numerical examples is performed to illustrate the model application and behaviors. The proposed modeling approach is expected to aid inventory strategies to both prepare and respond to disasters with efficiency.

Lu He 何璐

Faculty of Supply Chain Management

My research interests include systematic resource optimization, multitask prediction, and predictive-driven mixed integer programming.