IDEAS home Printed from https://ideas.repec.org/a/kap/hcarem/v27y2024i4d10.1007_s10729-024-09686-3.html
   My bibliography  Save this article

The benefits (or detriments) of adapting to demand disruptions in a hospital pharmacy with supply chain disruptions

Author

Listed:
  • Lauren L Czerniak

    (University of Michigan)

  • Mariel S Lavieri

    (University of Michigan)

  • Mark S Daskin

    (University of Michigan)

  • Eunshin Byon

    (University of Michigan)

  • Karl Renius

    (University of Michigan)

  • Burgunda V Sweet

    (University of Michigan)

  • Jennifer Leja

    (University of Michigan)

  • Matthew A Tupps

    (University of Michigan)

Abstract

Supply chain disruptions and demand disruptions make it challenging for hospital pharmacy managers to determine how much inventory to have on-hand. Having insufficient inventory leads to drug shortages, while having excess inventory leads to drug waste. To mitigate drug shortages and waste, hospital pharmacy managers can implement inventory policies that account for supply chain disruptions and adapt these inventory policies over time to respond to demand disruptions. Demand disruptions were prevalent during the Covid-19 pandemic. However, it remains unclear how a drug’s shortage-waste weighting (i.e., concern for shortages versus concern for waste) as well as the duration of and time between supply chain disruptions influence the benefits (or detriments) of adapting to demand disruptions. We develop an adaptive inventory system (i.e., inventory policies change over time) and conduct an extensive numerical analysis using real-world demand data from the University of Michigan’s Central Pharmacy to address this research question. For a fixed mean duration of and mean time between supply chain disruptions, we find a drug’s shortage-waste weighting dictates the magnitude of the benefits (or detriments) of adaptive inventory policies. We create a ranking procedure that provides a way of discerning which drugs are of most concern and illustrates which policies to update given that a limited number of inventory policies can be updated. When applying our framework to over 300 drugs, we find a decision-maker needs to update a very small proportion of drugs (e.g., $$

Suggested Citation

  • Lauren L Czerniak & Mariel S Lavieri & Mark S Daskin & Eunshin Byon & Karl Renius & Burgunda V Sweet & Jennifer Leja & Matthew A Tupps, 2024. "The benefits (or detriments) of adapting to demand disruptions in a hospital pharmacy with supply chain disruptions," Health Care Management Science, Springer, vol. 27(4), pages 525-554, December.
    • Handle: RePEc:kap:hcarem:v:27:y:2024:i:4:d:10.1007_s10729-024-09686-3
    DOI: 10.1007/s10729-024-09686-3
    as

    Download full text from publisher

    File URL: http://link.springer.com/10.1007/s10729-024-09686-3
    File Function: Abstract
    Download Restriction: Access to the full text of the articles in this series is restricted.
    File URL: https://libkey.io/10.1007/s10729-024-09686-3?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Marek Gebicki & Ed Mooney & Shi-Jie Chen & Lukasz Mazur, 2014. "Evaluation of hospital medication inventory policies," Health Care Management Science, Springer, vol. 17(3), pages 215-229, September.
    2. Emily L. Tucker & Mark S. Daskin & Burgunda V. Sweet & Wallace J. Hopp, 2020. "Incentivizing resilient supply chain design to prevent drug shortages: policy analysis using two- and multi-stage stochastic programs," IISE Transactions, Taylor & Francis Journals, vol. 52(4), pages 394-412, April.
    3. Saedi, Samira & Kundakcioglu, O. Erhun & Henry, Andrea C., 2016. "Mitigating the impact of drug shortages for a healthcare facility: An inventory management approach," European Journal of Operational Research, Elsevier, vol. 251(1), pages 107-123.
    4. Yuan Xu & Joseph Szmerekovsky, 2022. "A multi-product multi-period stochastic model for a blood supply chain considering blood substitution and demand uncertainty," Health Care Management Science, Springer, vol. 25(3), pages 441-459, September.
    5. Justin Jia & Hui Zhao, 2017. "Mitigating the U.S. Drug Shortages Through Pareto-Improving Contracts," Production and Operations Management, Production and Operations Management Society, vol. 26(8), pages 1463-1480, August.
    6. Jian Li & Lu Liu & Hao Hu & Qiuhong Zhao & Libin Guo, 2018. "An Inventory Model for Deteriorating Drugs with Stochastic Lead Time," IJERPH, MDPI, vol. 15(12), pages 1-20, December.
    7. Dmitry Ivanov & Alexandre Dolgui & Boris Sokolov & Marina Ivanova, 2017. "Literature review on disruption recovery in the supply chain," International Journal of Production Research, Taylor & Francis Journals, vol. 55(20), pages 6158-6174, October.
    8. Qing Li & Peiwen Yu & Xiaoli Wu, 2016. "Managing Perishable Inventories in Retailing: Replenishment, Clearance Sales, and Segregation," Operations Research, INFORMS, vol. 64(6), pages 1270-1284, December.
    9. Jonathan Minh Phuong & Jonathan Penm & Betty Chaar & Lachlan Daniel Oldfield & Rebekah Moles, 2019. "The impacts of medication shortages on patient outcomes: A scoping review," PLOS ONE, Public Library of Science, vol. 14(5), pages 1-17, May.
    10. Xinhui Zhang & Doug Meiser & Yan Liu & Brett Bonner & Lebin Lin, 2014. "Kroger Uses Simulation-Optimization to Improve Pharmacy Inventory Management," Interfaces, INFORMS, vol. 44(1), pages 70-84, February.
    11. Dillon, Mary & Oliveira, Fabricio & Abbasi, Babak, 2017. "A two-stage stochastic programming model for inventory management in the blood supply chain," International Journal of Production Economics, Elsevier, vol. 187(C), pages 27-41.
    12. Lawrence V. Snyder & Zümbül Atan & Peng Peng & Ying Rong & Amanda J. Schmitt & Burcu Sinsoysal, 2016. "OR/MS models for supply chain disruptions: a review," IISE Transactions, Taylor & Francis Journals, vol. 48(2), pages 89-109, February.
    13. Samuel Eilon & Joseph Elmaleh, 1970. "Adaptive Limits in Inventory Control," Management Science, INFORMS, vol. 16(8), pages 533-548, April.
    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. Rana Azghandi & Jacqueline Griffin & Mohammad S. Jalali, 2018. "Minimization of Drug Shortages in Pharmaceutical Supply Chains: A Simulation-Based Analysis of Drug Recall Patterns and Inventory Policies," Complexity, Hindawi, vol. 2018, pages 1-14, December.
    2. Dmitry Ivanov, 2022. "Viable supply chain model: integrating agility, resilience and sustainability perspectives—lessons from and thinking beyond the COVID-19 pandemic," Annals of Operations Research, Springer, vol. 319(1), pages 1411-1431, December.
    3. Zhang, Yanzi & Diabat, Ali & Zhang, Zhi-Hai, 2021. "Reliable closed-loop supply chain design problem under facility-type-dependent probabilistic disruptions," Transportation Research Part B: Methodological, Elsevier, vol. 146(C), pages 180-209.
    4. Wei Xu & Dong-Ping Song, 2022. "Integrated optimisation for production capacity, raw material ordering and production planning under time and quantity uncertainties based on two case studies," Operational Research, Springer, vol. 22(3), pages 2343-2371, July.
    5. Kochakkashani, Farid & Kayvanfar, Vahid & Haji, Alireza, 2023. "Supply chain planning of vaccine and pharmaceutical clusters under uncertainty: The case of COVID-19," Socio-Economic Planning Sciences, Elsevier, vol. 87(PB).
    6. Ivanov, Dmitry, 2024. "Supply chain resilience: Conceptual and formal models drawing from immune system analogy," Omega, Elsevier, vol. 127(C).
    7. He, Jian & Alavifard, Farzad & Ivanov, Dmitry & Jahani, Hamed, 2019. "A real-option approach to mitigate disruption risk in the supply chain," Omega, Elsevier, vol. 88(C), pages 133-149.
    8. Abdolreza Roshani & Philip Walker-Davies & Glenn Parry, 2024. "Designing resilient supply chain networks: a systematic literature review of mitigation strategies," Annals of Operations Research, Springer, vol. 341(2), pages 1267-1332, October.
    9. Lydia Novoszel & Tina Wakolbinger, 2022. "Meta-analysis of Supply Chain Disruption Research," SN Operations Research Forum, Springer, vol. 3(1), pages 1-25, March.
    10. Milad Mohammadi & Alibakhsh Nikzad, 2023. "Sustainable and reliable closed-loop supply chain network design during pandemic outbreaks and disruptions," Operations Management Research, Springer, vol. 16(2), pages 969-991, June.
    11. Shraddha Mishra & Surya Prakash Singh, 2022. "A stochastic disaster-resilient and sustainable reverse logistics model in big data environment," Annals of Operations Research, Springer, vol. 319(1), pages 853-884, December.
    12. Sawik, Tadeusz, 2021. "On the risk-averse selection of resilient multi-tier supply portfolio," Omega, Elsevier, vol. 101(C).
    13. René Y. Glogg & Anna Timonina-Farkas & Ralf W. Seifert, 2022. "Modeling and mitigating supply chain disruptions as a bilevel network flow problem," Computational Management Science, Springer, vol. 19(3), pages 395-423, July.
    14. Zhu, Xiaoyan & Cao, Yunzhi, 2021. "The optimal recovery-fund based strategy for uncertain supply chain disruptions: A risk-averse two-stage stochastic programming approach," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 152(C).
    15. Chowdhury, Priyabrata & Paul, Sanjoy Kumar & Kaisar, Shahriar & Moktadir, Md. Abdul, 2021. "COVID-19 pandemic related supply chain studies: A systematic review," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 148(C).
    16. Raktim Pal & Nezih Altay, 2023. "The missing link in disruption management research: coping," Operations Management Research, Springer, vol. 16(1), pages 433-449, March.
    17. Aldrighetti, Riccardo & Battini, Daria & Ivanov, Dmitry, 2023. "Efficient resilience portfolio design in the supply chain with consideration of preparedness and recovery investments," Omega, Elsevier, vol. 117(C).
    18. Imran Ali & Devika Kannan, 2022. "Mapping research on healthcare operations and supply chain management: a topic modelling-based literature review," Annals of Operations Research, Springer, vol. 315(1), pages 29-55, August.
    19. Hosseini, Seyedmohsen & Ivanov, Dmitry & Dolgui, Alexandre, 2019. "Review of quantitative methods for supply chain resilience analysis," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 125(C), pages 285-307.
    20. Chowdhury, Nighat Afroz & Ali, Syed Mithun & Mahtab, Zuhayer & Rahman, Towfique & Kabir, Golam & Paul, Sanjoy Kumar, 2019. "A structural model for investigating the driving and dependence power of supply chain risks in the readymade garment industry," Journal of Retailing and Consumer Services, Elsevier, vol. 51(C), pages 102-113.

    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:kap:hcarem:v:27:y:2024:i:4:d:10.1007_s10729-024-09686-3. 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: Sonal Shukla or Springer Nature Abstracting and Indexing (email available below). General contact details of provider: http://www.springer.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.