IDEAS home Printed from https://ideas.repec.org/a/gam/jmathe/v8y2020i11p1962-d440447.html
   My bibliography  Save this article

Inventory Management at a Chilean Hospital Pharmacy: Case Study of a Dynamic Decision-Aid Tool

Author

Listed:
  • Fabián Silva-Aravena

    (Doctorado en Sistemas de Ingeniería, Faculty of Engineering, Universidad de Talca, Talca 3460000, Chile
    Departamento de Planificación y Control de Gestión, Hospital Regional de Talca, Talca 3460000, Chile)

  • Irlanda Ceballos-Fuentealba

    (Departamento de Planificación y Control de Gestión, Hospital Regional de Talca, Talca 3460000, Chile)

  • Eduardo Álvarez-Miranda

    (Department of Industrial Engineering, Faculty of Engineering, Universidad de Talca, Talca 3460000, Chile
    Instituto Sistemas Complejos de Ingeniería (ISCI), Talca 3460000, Chile)

Abstract

Pharmacy inventory management is a critical process in healthcare centers. On the one hand, effective drug procurement is fundamental for fulfilling the therapeutic requirements of patients. On the other hand, as hospital pharmacies’ purchasing and storage costs comprise an important share in the hospital budgets, efficient inventory management may play a central role in operational cost containment. Therefore, healthcare centers should design and implement decision-aid strategies for planning the purchase of drugs with the aim of avoiding excessive purchasing volumes and optimizing warehouse capacity, while also meeting forecast demand and ensuring critical stock levels. In this study, we present the methodological features of a decision-aid tool for planning the purchases and inventory levels for the controlled medication pharmacy of the Regional Hospital of Talca, Chile. We report the results obtained after 1 year of operation; these results show that our strategy produced more than 7% savings compared to the regular inventory planning strategy and was more effective in preserving critical stock levels. Furthermore, from a computational point of view, our strategy outperforms a recently published approach for a similar application.

Suggested Citation

  • Fabián Silva-Aravena & Irlanda Ceballos-Fuentealba & Eduardo Álvarez-Miranda, 2020. "Inventory Management at a Chilean Hospital Pharmacy: Case Study of a Dynamic Decision-Aid Tool," Mathematics, MDPI, vol. 8(11), pages 1-20, November.
    • Handle: RePEc:gam:jmathe:v:8:y:2020:i:11:p:1962-:d:440447
    as

    Download full text from publisher

    File URL: https://www.mdpi.com/2227-7390/8/11/1962/pdf
    Download Restriction: no
    File URL: https://www.mdpi.com/2227-7390/8/11/1962/
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Liu, Ming & Zhang, Zhe & Zhang, Ding, 2017. "Logistics planning for hospital pharmacy trusteeship under a hybrid of uncertainties," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 101(C), pages 201-215.
    2. Hughes, David & McGuire, Alistair, 2003. "Stochastic demand, production responses and hospital costs," Journal of Health Economics, Elsevier, vol. 22(6), pages 999-1010, November.
    3. Zhou, Zhongliang & Su, Yanfang & Gao, Jianmin & Xu, Ling & Zhang, Yaoguang, 2011. "New estimates of elasticity of demand for healthcare in rural China," Health Policy, Elsevier, vol. 103(2), pages 255-265.
    4. Nielsen, Lars Kjær & Kroon, Leo & Maróti, Gábor, 2012. "A rolling horizon approach for disruption management of railway rolling stock," European Journal of Operational Research, Elsevier, vol. 220(2), pages 496-509.
    5. L. Beril Toktay & Lawrence M. Wein & Stefanos A. Zenios, 2000. "Inventory Management of Remanufacturable Products," Management Science, INFORMS, vol. 46(11), pages 1412-1426, November.
    6. H. Ichoku & Murray Leibbrandt, 2003. "Demand for Healthcare Services in Nigeria: A Multivariate Nested Logit Model," African Development Review, African Development Bank, vol. 15(2‐3), pages 396-424.
    7. Laurent Gille & Thomas Houy, 2014. "The future of health care demand in developed countries: From the “right to treatment” to the “duty to stay healthy”," Post-Print hal-02552791, HAL.
    8. Andres F. Osorio & Sally C. Brailsford & Honora K. Smith & Sonia P. Forero-Matiz & Bernardo A. Camacho-Rodríguez, 2017. "Simulation-optimization model for production planning in the blood supply chain," Health Care Management Science, Springer, vol. 20(4), pages 548-564, December.
    9. Nicholson, Lawrence & Vakharia, Asoo J. & Selcuk Erenguc, S., 2004. "Outsourcing inventory management decisions in healthcare: Models and application," European Journal of Operational Research, Elsevier, vol. 154(1), pages 271-290, April.
    10. Suchithra Rajendran & A. Ravi Ravindran, 2020. "Multi-criteria approach for platelet inventory management in hospitals," International Journal of Operational Research, Inderscience Enterprises Ltd, vol. 38(1), pages 49-69.
    11. Fernando Rojas Zún ̃iga & Daniel Roma?n Luza & Daniel Roma?n Luza & Giuliani Coluccio Piñones, 2015. "Propuesta de abastecimiento de medicamentos coordinando multiniveles de demanda. Un caso ilustrativo chileno," Estudios Gerenciales, Universidad Icesi, vol. 31(137), pages 419-431, November.
    12. Ming Liu & Ding Zhang, 2016. "A dynamic logistics model for medical resources allocation in an epidemic control with demand forecast updating," Journal of the Operational Research Society, Palgrave Macmillan;The OR Society, vol. 67(6), pages 841-852, June.
    13. Kwon, Ik-Whan G. & Kim, Sung-Ho & Martin, David G., 2016. "Healthcare supply chain management; strategic areas for quality and financial improvement," Technological Forecasting and Social Change, Elsevier, vol. 113(PB), pages 422-428.
    14. Thomas, Douglas J. & Griffin, Paul M., 1996. "Coordinated supply chain management," European Journal of Operational Research, Elsevier, vol. 94(1), pages 1-15, October.
    15. Wren, Maev-Ann & Keegan, Conor & Walsh, Brendan & Bergin, Adele & Eighan, James & Brick, Aoife & Connolly, Sheelah & Watson, Dorothy & Banks, Joanne, 2017. "Projections of demand for healthcare in Ireland, 2015-2030: First report from the Hippocrates Model," Research Series, Economic and Social Research Institute (ESRI), number RS67.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Liu, Ming & Zhang, Zhe & Zhang, Ding, 2017. "Logistics planning for hospital pharmacy trusteeship under a hybrid of uncertainties," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 101(C), pages 201-215.
    2. Debabrata Das & Sameer Kumar & Nirmal Baran Hui & Vipul Jain & Charu Chandra, 2023. "Pricing and revenue-based outsourcing strategies in a multi-echelon lot-sizing model under insufficient production capacity," Journal of Revenue and Pricing Management, Palgrave Macmillan, vol. 22(6), pages 514-530, December.
    3. Carlos Franco & Edgar Alfonso-Lizarazo, 2017. "A Structured Review of Quantitative Models of the Pharmaceutical Supply Chain," Complexity, Hindawi, vol. 2017, pages 1-13, December.
    4. Yilmaz, Ibrahim & Yoon, Sang Won & Seok, Hyesung, 2017. "A framework and algorithm for fair demand and capacity sharing in collaborative networks," International Journal of Production Economics, Elsevier, vol. 193(C), pages 137-147.
    5. Connolly, Sheelah & Brick, Aoife & O'Neill, Ciarán & O'Callaghan, Michael, 2022. "An analysis of the primary care systems of Ireland and Northern Ireland," Research Series, Economic and Social Research Institute (ESRI), number RS137.
    6. Huihui Liu & Xiaohang Yue & Hui Ding & G. Keong Leong, 2017. "Optimal Remanufacturing Certification Contracts in the Electrical and Electronic Industry," Sustainability, MDPI, vol. 9(4), pages 1-17, March.
    7. Shi, Yi & Deng, Yawen & Wang, Guoan & Xu, Jiuping, 2020. "Stackelberg equilibrium-based eco-economic approach for sustainable development of kitchen waste disposal with subsidy policy: A case study from China," Energy, Elsevier, vol. 196(C).
    8. Kai-Leung Yung & Jiafu Tang & Andrew W. H. Ip & Dingwei Wang, 2006. "Heuristics for Joint Decisions in Production, Transportation, and Order Quantity," Transportation Science, INFORMS, vol. 40(1), pages 99-116, February.
    9. Liu, Wenjie & Liu, Wei & Shen, Ningning & Xu, Zhitao & Xie, Naiming & Chen, Jian & Zhou, Huiyu, 2022. "Pricing and collection decisions of a closed-loop supply chain with fuzzy demand," International Journal of Production Economics, Elsevier, vol. 245(C).
    10. Huang, Chao-Kuei & Tsai, Deng-Maw & Wu, Ji-Cheng & Chung, Kun-Jen, 2010. "An integrated vendor-buyer inventory model with order-processing cost reduction and permissible delay in payments," European Journal of Operational Research, Elsevier, vol. 202(2), pages 473-478, April.
    11. Ramani, Vinay & De Giovanni, Pietro, 2017. "A two-period model of product cannibalization in an atypical Closed-loop Supply Chain with endogenous returns: The case of DellReconnect," European Journal of Operational Research, Elsevier, vol. 262(3), pages 1009-1027.
    12. Kilic, Onur A. & Tunc, Huseyin & Tarim, S. Armagan, 2018. "Heuristic policies for the stochastic economic lot sizing problem with remanufacturing under service level constraints," European Journal of Operational Research, Elsevier, vol. 267(3), pages 1102-1109.
    13. Tsai, Jung-Fa, 2007. "An optimization approach for supply chain management models with quantity discount policy," European Journal of Operational Research, Elsevier, vol. 177(2), pages 982-994, March.
    14. Frances Horgan & Vanda Cummins & Dawn A. Skelton & Frank Doyle & Maria O’Sullivan & Rose Galvin & Elissa Burton & Jan Sorensen & Samira Barbara Jabakhanji & Bex Townley & Debbie Rooney & Gill Jackson , 2022. "Enhancing Existing Formal Home Care to Improve and Maintain Functional Status in Older Adults: Results of a Feasibility Study on the Implementation of Care to Move (CTM) in an Irish Healthcare Setting," IJERPH, MDPI, vol. 19(18), pages 1-18, September.
    15. Hongqin Tang & Jianping Zhu & Nan Li & Weipeng Wu, 2024. "Impact of Enterprise Supply Chain Digitalization on Cost of Debt: A Four-Flows Perspective Analysis Using Explainable Machine Learning Methodology," Sustainability, MDPI, vol. 16(19), pages 1-27, October.
    16. Brekke, Kurt R. & Cellini, Roberto & Siciliani, Luigi & Straume, Odd Rune, 2010. "Competition and quality in health care markets: A differential-game approach," Journal of Health Economics, Elsevier, vol. 29(4), pages 508-523, July.
    17. Stan van Hoesel & H. Edwin Romeijn & Dolores Romero Morales & Albert P. M. Wagelmans, 2005. "Integrated Lot Sizing in Serial Supply Chains with Production Capacities," Management Science, INFORMS, vol. 51(11), pages 1706-1719, November.
    18. de Brito, Marisa P. & Dekker, Rommert, 2003. "Modelling product returns in inventory control--exploring the validity of general assumptions," International Journal of Production Economics, Elsevier, vol. 81(1), pages 225-241, January.
    19. Kristensen, Troels & Olsen, Kim Rose & Kilsmark, Jannie & Lauridsen, Jørgen T. & Pedersen, Kjeld Møller, 2012. "Economies of scale and scope in the Danish hospital sector prior to radical restructuring plans," Health Policy, Elsevier, vol. 106(2), pages 120-126.
    20. José L. Vilar-Zanón & Eduardo Vilar & Antonio Heras, 2017. "Online product returns risk assessment and management," TOP: An Official Journal of the Spanish Society of Statistics and Operations Research, Springer;Sociedad de Estadística e Investigación Operativa, vol. 25(3), pages 445-466, October.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:gam:jmathe:v:8:y:2020:i:11:p:1962-:d:440447. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: MDPI Indexing Manager (email available below). General contact details of provider: https://www.mdpi.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.