scholarly journals Analysis of an inventory system with emergency ordering option at the time of supply disruption

OR Spectrum ◽  
2021 ◽  
Author(s):  
Saeed Poormoaied ◽  
Ece Zeliha Demirci
Keyword(s):  
Numerical Study ◽  
Markov Chain Model ◽  
Cost Savings ◽  
Inventory Level ◽  
Chain Model ◽  
Inventory Problem ◽  
Supply Disruptions ◽  
Stochastic Inventory ◽  
Stochastic Inventory Problem ◽  
Disruption Time

AbstractThis paper studies a continuous-review stochastic inventory problem for a firm facing random demand and random supply disruptions. The supplier experiences operational (on) and disrupted (off) periods with exponentially distributed durations. The firm adopts an order-up-to level policy during the on period and additionally can release an emergency order based on the inventory level just before disruption. This inventory policy is described by a continuous-time Markov chain model. We analyze the model for two different lead time scenarios and suggest solution approaches yielding the optimal policy parameters. In a numerical study, we explore the value of exercising such a policy and show that an emergency ordering opportunity at the disruption time brings substantial cost savings in cases with high lost sales cost, long off period, and low percentage of supplier’s availability.

scholarly journals Cost-Effectiveness Analysis of the Spanish Renal Replacement Therapy Program

2012 ◽  
Vol 32 (2) ◽  
pp. 192-199 ◽  
Author(s):  
Guillermo Villa ◽  
Lucía Fernández–Ortiz ◽  
Jesús Cuervo ◽  
Pablo Rebollo ◽  
Rafael Selgas ◽  
...  
Keyword(s):  
Cost Effectiveness ◽  
Renal Replacement Therapy ◽  
Replacement Therapy ◽  
Markov Chain Model ◽  
Cost Savings ◽  
Quality Adjusted Life Year ◽  
Cost Effectiveness Analysis ◽  
Chain Model ◽  
Therapy Program ◽  
Effectiveness Analysis

♦BackgroundWe undertook a cost-effectiveness analysis of the Spanish Renal Replacement Therapy (RRT) program for end-stage renal disease patients from a societal perspective. The current Spanish situation was compared with several hypothetical scenarios.♦MethodsA Markov chain model was used as a foundation for simulations of the Spanish RRT program in three temporal horizons (5, 10, and 15 years). The current situation (scenario 1) was compared with three different scenarios: increased proportion of overall scheduled (planned) incident patients (scenario 2); constant proportion of overall scheduled incident patients, but increased proportion of scheduled incident patients on peritoneal dialysis (PD), resulting in a lower proportion of scheduled incident patients on hemodialysis (HD) (scenario 3); and increased overall proportion of scheduled incident patients together with increased scheduled incidence of patients on PD (scenario 4).♦ResultsThe incremental cost-effectiveness ratios (ICERs) of scenarios 2, 3, and 4, when compared with scenario 1, were estimated to be, respectively, -€83 150, -€354 977, and -€235 886 per incremental quality-adjusted life year (ΔQALY), evidencing both moderate cost savings and slight effectiveness gains. The net health benefits that would accrue to society were estimated to be, respectively, 0.0045, 0.0211, and 0.0219 ΔQALYs considering a willingness-to-pay threshold of €35 000/ΔQALY.♦ConclusionsScenario 1, the current Spanish situation, was dominated by all the proposed scenarios. Interestingly, scenarios 3 and 4 showed the best results in terms of cost-effectiveness. From a cost-effectiveness perspective, an increase in the overall scheduled incidence of RRT, and particularly that of PD, should be promoted.

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