Optimization in pharmaceutical supply chain inventory management for disaster planning

Drug shortages and improper inventory management disturb the pharmaceutical supply chain (PSC) leading to poor healthcare services with a high cost. Many pharmacies and hospitals experience difficulties in achieving proper inventory control as they have not addressed how drugs are managed, supplied, and used. Another important factor in the PSC is unknown events such as disasters that create enormous losses. PSC carries high responsibility since it is critical that the proper drugs can be used at the right time and condition. Drugs are needed more especially during natural disasters. Preparation for such events must become a priority. To increase the resilience of a PSC for disasters, an inventory control model is developed in this study using mathematical programming techniques. The proposed inventory model considers various types of drugs, lead time, ordering size, holding and shortage cost, and the customer service level. The corresponding solution determines the optimal safety stock and refill quantity in the disaster preparation phase with the minimum overall inventory cost. A scenario of numerical example is performed to illustrate the model application and behaviors. The proposed modeling approach can aid inventory strategies to both usual conditions and preparation for disasters with efficiency.