Improving Inventory Management in Hospital's Central Warehouse for Consumable Medical Supplies

Abstract

Facing the rising healthcare costs globally, implementing effective inventory management is one powerful solution to maintain the service level while at the same time control the cost. We thus focus on the inventory management of consumable medical supplies, a key component of healthcare supply chain, with the objective to minimize the total inventory costs. We choose the central warehouse of a large hospital in Turkey as our research object. Employing continuous review policy with lot size-reorder point under fixed penalty cost, we manage to find the optimal ordering amounts for our sample under non-normal distributed demands. Comparing to the current inventory policy used in the hospital, our model is able to reduce the inventory cost significantly under similar service levels. The study shows great potential in employing operation management techniques in the inventory management of hospital warehouses.