Research Reports from the Department of Operations
Document Type
Dissertation
Publication Date
4-23-1980
Abstract
It is the aim of this work to develop optimal decision rules for consumable supplies' inventory control policies for multi-facility, multi-department Health-Care Delivery Organizations. Analytical techniques of operations research have been widely used in industrial inventory control. Health-care inventory control can benefit from this knowledge. The analogies, however, are not perfect and their limits must be recognized. The theory must be enriched by considerations specific to the health-care industry. Therefore, the optimum policies must respond to: (1) The realities of a multi-echelon inventory system; (2) The urgency requirements of a health-care delivery system. The relevant literature corresponding to the aforementioned categories are thoroughly searched. Systems and procedures for material control of an existing Health Maintenance Organization (HMO) are minutely analyzed. The synthesis of these efforts are then utilized towards the development of pertinent mathematical models--under a restrictive set of assumptions. Specifically, the mathematical models--cost/penalty minimization--address the ordering and purchasing policies of a two-echelon health-care inventory system with positive delivery lag. A new approach is used in the development of the multi-echelon cases. This approach which calls for the transformation of ordering policies into allocation policies has greatly enhanced model building efforts. Optimal closed form analytical solutions are obtained for these models. Inasmuch as the computational requirements of the solutions grow linearly with the number of departments and/or facilities, the mathematical models can accommodate any number of these entities. In order to provide the hospital management with an evaluative tool by which (a) the behavior of the proposed optimal policies-- corresponding to a particular set of service levels--in a real world environment can be observed; and (b) the appropriate set of service· levels can be selected for actual implementation; the simulation model of the proposed system is built. Note that all the restrictive assumptions of the mathematical models are relaxed in this model. The aforementioned methodologies are validated by selecting a representative set of items from the HMO and running them through the various models. Systems and procedures and data obtained from the HMO is emulated to produce performance measures of a current system. It is also demonstrated that the proposed mathematical models produce close-to-optimal solutions--particularly for departments--even for those systems in which any and/or all of the restrictive assumptions utilized in the development of the mathematical models are not satisfied. However, care must be exercised when using warehouse decision rules because the compounded effects of errors could produce far-from-optimal results. This danger is also minimized when the mathematical models are used in conjunction with the evaluative simulation model.
Keywords
Operations research, Medical supplies, Inventory control--Mathematical models, Health facilities--Materials management, Health maintenance organizations, Decision making--Mathematical models, Health services administration
Publication Title
Dissertation/Technical Memorandums from the Department of Operations, School of Management, Case Western Reserve University
Issue
Technical memorandum no. 465 ; Submitted in partial fulfillment of the requirements for the Degree of Doctor of Philosophy.
Rights
This work is in the public domain and may be freely downloaded for personal or academic use
Recommended Citation
Javad, Shahriar, "Multi-Echelon Inventory System in Health-Care Delivery Organizations" (1980). Research Reports from the Department of Operations. 320.
https://commons.case.edu/wsom-ops-reports/320