Joint-optimization of inventory policies on a multi-product multi-echelon pharmaceutical system with batching and ordering constraints
This paper considers the real case of a one-warehouse, n-retailer distribution system of infusion solutions in a hospital. A near-optimal joint inventory policy is found that considers stochastic demand and batching. We include health care aspects such as emergency deliveries, service level, and ordering constraint. The system is modeled as a Markov chain and the policy is shown analytically to have appealing structure. The methodology leads to a 45% reduction in stock-on-hand value while respecting the service level.
multi-echelon joint optimization health care logistics markov processes inventory/distribution problem or in health services