Inventory management of perishable health products: a decision framework with non-financial measures

Abstract

PurposeThis research proposes a decision framework for using non-financial measures to define a replenishment policy for perishable health products. These products are perishable and substitutable by nature and create complexities for managing inventory. Instead of a financial measure, numerous measures should be considered and balanced to meet business objectives and enhance inventory management.Design/methodology/approachThis research applies a multi-methodological approach and develops a framework that integrates discrete event simulation (DES), analytic hierarchy process (AHP) and data envelopment analysis (DEA) techniques to define the most favourable replenishment policy using non-financial measures.FindingsThe integration framework performs well as illustrated in the numerical example; outcomes from the framework are comparable to those generated using a traditional, financial measures-based, approach. This research demonstrates that it is feasible to adopt non-financial performance measures to define a replenishment policy and evaluate performance.Originality/valueThe framework, thus, prioritises non-financial measures and addresses issues of lacking information sharing and employee involvement to enhance hospitals' performance while minimising costs. The non-financial measures improve cross-functional communication while supporting simpler transformations from high-level strategies to daily operational targets.

An optimization framework for COVID-19 vaccine allocation and inventory management: A case study

“…Loree and Aros-Vera [32] investigated a humanitarian logistics system for post-disaster concerning inventory management and distribution. Duong et al [33] researched inventory control of perishable health products. For solution purposes, they implemented an integrated Discrete Event Simulation (DES), Analytic Hierarchy Process (AHP), and Data Envelopment Analysis (DEA).…”

Proceedings of SW21 The OR Society Simulation Workshop

“…Models for the lifetime of perishable products assumed a fixed shelf-life; with the exception of the studies by Duong et al (2020) and Rijpkema et al (2014). The study by Duong et al (2020) relate to platelets, for which, although they have a fixed shelf-life at the time of collection, at the moment they are received at the distribution centre, the remaining shelf-life is modelled as an exponential distribution. Rijpkema et al (2014) model a case study of strawberries with a random shelf-life parameterised by environmental factors related to storage conditions in the supply chain.…”

“…Beyond four studies combing DES with optimisation (Alrawabdeh, 2021;Osorio et al, 2017;Xue et al, 2019;Zhou & Olsen, 2018) (see Table 3), a single publication (Ejohwomu et al, 2021) described a hybrid simulation, which combined DES with ABS. Table 3 also lists two studies employing a hybrid modelling approach using DES with multi-criteria ranking techniques, which assists in the interpretation of the results of the DES model, to either evaluate the Key Performance Indicators (KPIs) (Duong et al, 2020) or to evaluate different policies (Zhou et al, 2021).…”

An analysis of inventory policies for substitute pharmaceuticals with purchasing or selling constraints

“…Several other articles primarily examined the optimal inventory policy for pharmaceutical supply chains. Among them, Duong et al (2020) investigate how to use nonfinancial measures to define a replenishment policy for perishable health products. Kelle et al (2012) study the managerial tradeoffs of the operational, tactical, and strategic decisions for a pharmaceutical supply chain.…”

“…Among them, Duong et al. (2020) investigate how to use nonfinancial measures to define a replenishment policy for perishable health products. Kelle et al.…”