Technology Enabled New Inventory Control Policies in Hospitals

Modern point-of-use technology at hospitals has enabled new replenishment policies for medical supplies. Traditionally used periodic replenishment policies are being replaced by continuous or hybrid periodic-continuous review policies enabled by the use of new technology. New technology such as automated dispensing machines used to store hospital supplies has enabled the use of a new hybrid inventory control policy. We first study this new hybrid inventory control policy with both periodic and continuous replenishments permitted, under deterministic and stochastic demand. For deterministic demand, we derive expressions for the optimal hybrid policy parameters. For stochastic demand: (i) we develop a simulation-based optimization approach to find policy parameters and estimate the long-run average cost, and (ii) we computationally compare the performance of the hybrid policy with traditional periodic review and continuous review policies. Next we extend our results to consider multiple items. We propose four different hybrid-joint replenishment policies for two items. Using a simulation-based optimization approach we find policy parameters and estimate long-run average cost for each of the four policies. We compare the performance of the four hybrid-joint replenishment policies with the performance of periodic and continuous review joint replenishment policies traditionally considered in the literature. Finally, we study a two-bin inventory replenishment system used at hospitals to store a large number of supplies. The recent introduction of radio frequency identification technology in two-bin replenishment systems has allowed continuous time tracking of inventory. We formulate a semi-Markov decision model for the two bin replenishment system and we characterize the optimal replenishment policy. We use a linear program to find the optimal average cost and policy parameters for the two bin replenishment policy.