Optimal Inventory Management Strategies for Pharmaceutical Company and Hospital Supply Chain in a Fuzzy-Stochastic Environment

Optimal Inventory Management Strategies for Pharmaceutical Company and Hospital Supply Chain in a Fuzzy-Stochastic EnvironmentA Journal by : S.Priyan, R. Uthayakumar

- Devitha Permatasari 2512100041 -Health care industries

Pharmaceutical

Considerations :Pharmaceutical products can be expensive to purchase and distribute, but shortages of essential medicines, improper use of medicines, and spending on unnecessary or low-quality medicines also have a high cost-wasted resources and preventable illness and death.

- Devitha Permatasari 2512100041 ----crusial role of pharmaceutical---(significant cost of products, storage, control, purchasing, distribution)?strategic decision making to achieve customers service level target at the minimum supply chain cost integrated inventory model for pharmaceutical products in a two-echelon (hospital & pharmaceutical) supply chainPSC (Pharmacautical Supply Chain)integration of flow and transformation of medicines and information

- Devitha Permatasari 2512100041 -product perishability or expiration of pharmacauticalgiven changing demandlimited space capacitycustomer satisfactionpatient safetyregulations affecting supplyInventories satisfy demand requirements reliable estimates of the amounts and timing of demand are essential(-) unavailability of the raw material, a workers strike or electricity failure, rejection during inspection, transcribing, human errors in counting, etc., a pharmaceutical company may not be able to deliver the products which were ordered by the hospital. As a result, the quantity received by the hospital does not match the quantity ordered.

- Devitha Permatasari 2512100041 -

- Devitha Permatasari 2512100041 -Priyan and Uthayakumar introduced the concept and developed continuous review two-echelon pharmaceutical supply chain inventory model with trade credit financing and controllable lead time under realistic problems in pharmaceutical company and hospital. Their model is based on the following two major assumptions:production rate, expiry rate, screening rate, holding cost and selling price are fixed constantthe hospitals received quantity is the same as the quantity ordered.PROBABILITY DISTRIBUTIONSHowever, in many cases where there is little or no historical data available to the inventory decision maker, perhaps due to recent changes in the supply chain environment, probability distributions may simply not be available, or may not be easily or accurately estimated. In some more cases, it may not be possible to collect data on the random variables of interest because of certain system or time constraints.FUZZY SET THEORYFuzzy set theory provides an alternate, flexible approach to handle such situations because it allows the model to easily incorporate various experts advice in developing critical parameter estimates(-) little or no historical data available to the inventory decision maker, perhaps due to recent changes in the supply chain environment, probability distributions may simply not be available, or may not be easily or accurately estimated; not be possible to collect data on the random variables of interest because of certain system or time constraints; furthermore, other critical supply chain parameters, in particular the various costs that impact the system, are often ill-defined and may vary from time to time.5FUZZY SETS representing linguistic concepts such as low, medium, and high, are employed to define states of a variable. The membership function of a fuzzy set possess a quantity meaning and may be viewed as a fuzzy number provided they satisfy certain conditions.Fuzzy set theory provides an alternate, flexible approach to handle such situations because it allows the model to easily incorporate various experts advice in developing critical parameter estimates.In this research we extend Uthayakumar and Priyans integrated pharmaceutical supply chain model to reflect the following three facts:Fuzzify the hospitals expiry rate (dbi) and holding cost (hbi), and the pharmaceutical companys production rate (Pi), screening rate (rsi), raw materials holding cost (hwi) and defective raw materials selling price (sdi) for the ith product as the triangular fuzzy numbers in the total costThe hospitals received quantity is uncertain but it is a random variable following a normal distributionThe lead time L consists of m mutually independent components.

The fuzzy model is defuzzified with the signed distance method and the analytical solution is worked out with the Lagrangian multiplier technique similar to Uthayakumar and Priyan model.

- Devitha Permatasari 2512100041 -For the fuzzy total cost in multi-echelon multi-product multi-constraint inventory model based on the signed distance method, all pertinent definitions of fuzzy sets are given below:

- Devitha Permatasari 2512100041 -Membership function of triangular fuzzy

P() = [PL(), PR()] PL() and PR() are the left and right hand side of P(); U be the family of all these fuzzy numbers P on Ra = the smallest possible valueb = the most promising valuec = the largest possible valuea b cA = a membership function fa(x) and is associated with each element x in A and a real number between 0 and 1

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- Devitha Permatasari 2512100041 -8ASSUMPTIONS:Single pharmaceutical, a single hospital, multiple (M) pharmaceutical productsHospital orders a lot size of Qi units pharmaceutical company produces the products in a lot size of nYi unitsCertain trade credit period for all products to cooperate with the hospital in an integrated strategyAll ordered raw material is delivered in one shipment to the pharmaceutical company by outside supplierHospital uses a continuous review policy and order when its inventory level falls to the reorder point riThe lead time L consists of m mutually independent components for all productsThe i-th products unit production cost, Pci(Yi), is a linear function of delivered quantity Yi.

- Devitha Permatasari 2512100041 -PROPOSED SCENARIOHospitals floor space has limited capacity and the target customer service level (CSL) of the ith product is (1 i). Demand