Pharmaceutical supply chain and inventory management strategies: Optimization for a pharmaceutical company and a hospital

We present an inventory model that integrates continuous review with production and distribution for a supply chain involving a pharmaceutical company and a hospital supply chain. The model considers multiple pharmaceutical products, variable lead time, permissible payment delays, constraints on space availability, and the customer service level (CSL). We develop a procedure for determining optimal solutions for inventory lot size, lead time, and the number of deliveries to achieve hospital CSL targets with a minimum total cost for the supply chain. A numerical example illustrates the model application and behavior.
Source: Operations Research for Health Care - Category: Hospital Management Source Type: research