Inventory control for point‐of‐use locations in hospitals

Inventory control for point‐of‐use locations in hospitals

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Article ID: iaor20122465
Volume: 63
Issue: 4
Start Page Number: 497
End Page Number: 510
Publication Date: Apr 2012
Journal: Journal of the Operational Research Society
Authors: ,
Keywords: inventory, simulation: applications, combinatorial optimization
Abstract:

Most inventory management systems at hospital departments are characterised by lost sales, periodic reviews with short lead times, and limited storage capacity. We develop two types of exact models that deal with all these characteristics. In a capacity model, the service level is maximised subject to a capacity restriction, and in a service model the required capacity is minimised subject to a service level restriction. We also formulate approximation models applicable for any lost‐sales inventory system (cost objective, no lead time restrictions etc). For the capacity model, we develop a simple inventory rule to set the reorder levels and order quantities. Numerical results for this inventory rule show an average deviation of 1% from the optimal service levels. We also embed the single‐item models in a multi‐item system. Furthermore, we compare the performance of fixed order size replenishment policies and (R,s,S) policies.

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