Component commonality in a multiple-period inventory model with service level constraints

Inventory management of deteriorating drugs has attracted considerable attention recently in hospitals. Drugs are a kind of special product. Two characteristics of some drugs are the shorter shelf life and high service level. This causes hospitals a great deal of difficulty in inventory management of perishable drugs. On one hand, hospitals should increase the drug inventory to achieve a higher service level. On the other hand, hospitals should decrease the drug inventory because of the short shelf life of drugs. An effective management of pharmaceuticals is required to ensure 100% product availability at the right time, at the right cost, in good conditions to the right customers. This requires a trade-off between shelf-life and service level. In addition, many uncontrollable factors can lead to random lead time of drugs. This paper focuses on deteriorating drugs with stochastic lead time. We have established a stochastic lead time inventory model for deteriorating drugs with fixed demand. The lead time obeyed a certain distribution function and shortages were allowed. This model also considered constraints on service level, stock space and drug shelf life. Through the analysis of the model, the shelf life of drugs and service level were weighted in different lead time distributions. Empirical analysis and sensitivity analysis were given to get reach important conclusions and enlightenment.

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An (s, S) Inventory Optimization Problem

Analytics, Operations, and Strategic Decision Making in the Public Sector - Advances in Public Policy and Administration ◽

10.4018/978-1-5225-7591-7.ch009 ◽

2019 ◽

pp. 187-206

Author(s):

Gizem Sağol ◽

Görkem Sariyer ◽

Banu Yetkin Ekren ◽

Mustafa Gökalp Ataman

Keyword(s):

Inventory Management ◽

Optimization Problem ◽

Service Level ◽

Inventory Model ◽

Considerable Effort ◽

Medical Products ◽

High Service ◽

Inventory Optimization ◽

Medical Supplies

Inventory management is one essential lever to use the resources efficiently. However, managing inventories in hospitals is a challenging task because of the several issues: a high service level of medical supplies is required under the unpredictable demand, medical products constitute a significant portion of the overall costs, and the management of these supplies requires considerable effort to check the levels to track usage and to distribute them. Therefore, it is pertinence to apply operations research tools to cope with the managerial issues of the hospital inventory system. In this chapter, the authors implement an (s, S) inventory model by using simulation in a case study of a hospital in Izmir, Turkey. They aim to analyze the unpredictable nature of demand of medical supplies in this hospital and its implications on the developed inventory policy.

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Data-Driven Cash Replenishment Planning of Recycling ATMs with Out-of-Cash and Full-of-Cash Risks

International Journal of Information Systems and Supply Chain Management ◽

10.4018/ijisscm.2020040105 ◽

2020 ◽

Vol 13 (2) ◽

pp. 77-96

Author(s):

Yongwu Zhou ◽

Qiran Wang ◽

Yongzhong Wu ◽

Mianmian Huang

Keyword(s):

Real Data ◽

Service Level ◽

Inventory Model ◽

Data Driven ◽

Safety Stocks ◽

Automated Teller Machines ◽

Operational Costs

When banks replenish the cash held in automated teller machines (ATMs) it is crucial for them to reduce operational costs while maintaining service level. This article studies the replenishment planning for recycling ATMs, which allow cash deposits to be made as well as withdrawals. The problem is formulated as a special (s, S) inventory model with two safety stocks corresponding to out-of-stock and full-of-stock risks, based on which the ATMs to be replenished each day and the replenishment amount are determined. Experiments with real data show that the model can significantly reduce costs and improve the overall service level.

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