IDEAS home Printed from https://ideas.repec.org/a/inm/ormsom/v13y2011i4p420-438.html
   My bibliography  Save this article

Inventory Management of Platelets in Hospitals: Optimal Inventory Policy for Perishable Products with Regular and Optional Expedited Replenishments

Author

Listed:
  • Deming Zhou

    (Department of Decision Sciences and Managerial Economics, Chinese University of Hong Kong, Shatin, N.T., Hong Kong, China)

  • Lawrence C. Leung

    (Department of Decision Sciences and Managerial Economics, Chinese University of Hong Kong, Shatin, N.T., Hong Kong, China)

  • William P. Pierskalla

    (Anderson School of Management, University of California, Los Angeles, Los Angeles, California 90095)

Abstract

Platelets are short-life blood components used in hospital blood transfusion centers. Excluding time for transportation, testing, and arrangement, clinically transfusable platelets have a mere three-day life span. This paper analyzes a periodic review inventory system for such a perishable product under two replenishment modes. Regular orders are placed at the beginning of a cycle. Within the cycle, the manager has an option of placing an additional order, referred to as an expedited order, characterized by an order-up-to level policy. For this platelet inventory problem, we prove the existence and uniqueness of an optimal policy that minimizes the expected cost. We then derive the necessary and sufficient conditions for the policy, based on which an algorithm is developed. Using real-life data, we provide a numerical illustration and a sensitivity analysis followed by extensive simulation experiments to examine the dynamics of platelet inventory management. It is shown that the optimal cost is significantly affected by demand uncertainty, lead times, seasonality, and vintage of expedited orders. Given a hospital's demand profile and the cost parameters, we are able to determine whether the hospital should order daily or every other day (i.e., adopting a combined use of regular and optional expedited orders). We also show that the analytical solution is a good approximation of the optimal policy obtained from simulation experiments, where more realistic features are incorporated. This inventory research problem can be classified as a fixed-lifetime perishable problem with dual modes of replenishments.

Suggested Citation

  • Deming Zhou & Lawrence C. Leung & William P. Pierskalla, 2011. "Inventory Management of Platelets in Hospitals: Optimal Inventory Policy for Perishable Products with Regular and Optional Expedited Replenishments," Manufacturing & Service Operations Management, INFORMS, vol. 13(4), pages 420-438, October.
    • Handle: RePEc:inm:ormsom:v:13:y:2011:i:4:p:420-438
    DOI: 10.1287/msom.1110.0334
    as

    Download full text from publisher

    File URL: http://dx.doi.org/10.1287/msom.1110.0334
    Download Restriction: no
    File URL: https://libkey.io/10.1287/msom.1110.0334?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. William L. Cooper, 2001. "Pathwise Properties and Performance Bounds for a Perishable Inventory System," Operations Research, INFORMS, vol. 49(3), pages 455-466, June.
    2. Anshul Sheopuri & Ganesh Janakiraman & Sridhar Seshadri, 2010. "New Policies for the Stochastic Inventory Control Problem with Two Supply Sources," Operations Research, INFORMS, vol. 58(3), pages 734-745, June.
    3. Steven Nahmias, 1982. "Perishable Inventory Theory: A Review," Operations Research, INFORMS, vol. 30(4), pages 680-708, August.
    4. Kamran Moinzadeh & Steven Nahmias, 1988. "A Continuous Review Model for an Inventory System with Two Supply Modes," Management Science, INFORMS, vol. 34(6), pages 761-773, June.
    5. Senthil Veeraraghavan & Alan Scheller-Wolf, 2008. "Now or Later: A Simple Policy for Effective Dual Sourcing in Capacitated Systems," Operations Research, INFORMS, vol. 56(4), pages 850-864, August.
    6. Liming Liu & Zhaotong Lian, 1999. "(s, S) Continuous Review Models for Products with Fixed Lifetimes," Operations Research, INFORMS, vol. 47(1), pages 150-158, February.
    7. George Tagaras & Dimitrios Vlachos, 2001. "A Periodic Review Inventory System with Emergency Replenishments," Management Science, INFORMS, vol. 47(3), pages 415-429, March.
    8. Chon-Huat Goh & Betsy S. Greenberg & Hirofumi Matsuo, 1993. "Two-Stage Perishable Inventory Models," Management Science, INFORMS, vol. 39(5), pages 633-649, May.
    9. Purushottaman Nandakumar & Thomas E. Morton, 1993. "Near Myopic Heuristics for the Fixed-Life Perishability Problem," Management Science, INFORMS, vol. 39(12), pages 1490-1498, December.
    10. Steven Nahmias, 1976. "Myopic Approximations for the Perishable Inventory Problem," Management Science, INFORMS, vol. 22(9), pages 1002-1008, May.
    11. Brant E. Fries, 1975. "Optimal Ordering Policy for a Perishable Commodity with Fixed Lifetime," Operations Research, INFORMS, vol. 23(1), pages 46-61, February.
    12. René Haijema & Jan Wal & Nico M. Dijk, 2005. "Blood Platelet Production: a multi-type perishable inventory problem," Operations Research Proceedings, in: Hein Fleuren & Dick Hertog & Peter Kort (ed.), Operations Research Proceedings 2004, pages 84-92, Springer.
    13. Goyal, S. K. & Giri, B. C., 2001. "Recent trends in modeling of deteriorating inventory," European Journal of Operational Research, Elsevier, vol. 134(1), pages 1-16, October.
    14. David Perry, 1999. "Analysis of a Sampling Control Scheme for a Perishable Inventory System," Operations Research, INFORMS, vol. 47(6), pages 966-973, December.
    15. Gregory P. Prastacos, 1984. "Blood Inventory Management: An Overview of Theory and Practice," Management Science, INFORMS, vol. 30(7), pages 777-800, July.
    16. Yoichiro Fukuda, 1964. "Optimal Policies for the Inventory Problem with Negotiable Leadtime," Management Science, INFORMS, vol. 10(4), pages 690-708, July.
    17. Jing-Sheng Song & Paul Zipkin, 2009. "Inventories with Multiple Supply Sources and Networks of Queues with Overflow Bypasses," Management Science, INFORMS, vol. 55(3), pages 362-372, March.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Xiuli Chao & Xiting Gong & Cong Shi & Huanan Zhang, 2015. "Approximation Algorithms for Perishable Inventory Systems," Operations Research, INFORMS, vol. 63(3), pages 585-601, June.
    2. Kouki, Chaaben & Sahin, Evren & Jemaï, Zied & Dallery, Yves, 2013. "Assessing the impact of perishability and the use of time temperature technologies on inventory management," International Journal of Production Economics, Elsevier, vol. 143(1), pages 72-85.
    3. Svoboda, Josef & Minner, Stefan & Yao, Man, 2021. "Typology and literature review on multiple supplier inventory control models," European Journal of Operational Research, Elsevier, vol. 293(1), pages 1-23.
    4. Borga Deniz & Itir Karaesmen & Alan Scheller-Wolf, 2010. "Managing Perishables with Substitution: Inventory Issuance and Replenishment Heuristics," Manufacturing & Service Operations Management, INFORMS, vol. 12(2), pages 319-329, July.
    5. Gad Allon & Jan A. Van Mieghem, 2010. "Global Dual Sourcing: Tailored Base-Surge Allocation to Near- and Offshore Production," Management Science, INFORMS, vol. 56(1), pages 110-124, January.
    6. Xiong‐zhi Wang & Guo‐qing Wang, 2019. "Integrating dynamic pricing and inventory control for fresh‐agri product under consumer choice," Australian Economic Papers, Wiley Blackwell, vol. 58(1), pages 96-111, March.
    7. Dehghani, Maryam & Abbasi, Babak & Oliveira, Fabricio, 2021. "Proactive transshipment in the blood supply chain: A stochastic programming approach," Omega, Elsevier, vol. 98(C).
    8. Huang, Boray & Wu, Andy, 2017. "Reduce shortage with self-reservation policy for a manufacturer paying both fixed and variable stockout expenditure," European Journal of Operational Research, Elsevier, vol. 262(3), pages 944-953.
    9. Duan, Qinglin & Liao, T. Warren, 2013. "A new age-based replenishment policy for supply chain inventory optimization of highly perishable products," International Journal of Production Economics, Elsevier, vol. 145(2), pages 658-671.
    10. Xiuli Chao & Xiting Gong & Cong Shi & Chaolin Yang & Huanan Zhang & Sean X. Zhou, 2018. "Approximation Algorithms for Capacitated Perishable Inventory Systems with Positive Lead Times," Management Science, INFORMS, vol. 64(11), pages 5038-5061, November.
    11. Jing-Sheng Song & Li Xiao & Hanqin Zhang & Paul Zipkin, 2017. "Optimal Policies for a Dual-Sourcing Inventory Problem with Endogenous Stochastic Lead Times," Operations Research, INFORMS, vol. 65(2), pages 379-395, April.
    12. Chand, Suresh & Li, Jian & Xu, Yanyi, 2016. "A periodic review inventory model with two delivery modes, fractional lead-times, and age-and-period-dependent backlogging costs," International Journal of Production Economics, Elsevier, vol. 173(C), pages 199-206.
    13. Aditya Jain & Harry Groenevelt & Nils Rudi, 2010. "Continuous Review Inventory Model with Dynamic Choice of Two Freight Modes with Fixed Costs," Manufacturing & Service Operations Management, INFORMS, vol. 12(1), pages 120-139, August.
    14. Jiankun Sun & Jan A. Van Mieghem, 2019. "Robust Dual Sourcing Inventory Management: Optimality of Capped Dual Index Policies and Smoothing," Manufacturing & Service Operations Management, INFORMS, vol. 21(4), pages 912-931, October.
    15. Chaolin Yang & Diyuan Huang & Chenyang Xu, 2022. "Multi-index base-stock policy for inventory systems with multiple capacitated suppliers," OR Spectrum: Quantitative Approaches in Management, Springer;Gesellschaft für Operations Research e.V., vol. 44(1), pages 155-177, March.
    16. Younes Hamdouch & Youssef Boulaksil & Kilani Ghoudi, 2023. "Dual sourcing inventory management with nonconsecutive lead times from a supply chain perspective: a numerical study," OR Spectrum: Quantitative Approaches in Management, Springer;Gesellschaft für Operations Research e.V., vol. 45(3), pages 1013-1041, September.
    17. Puranam, Kartikeya & Novak, David C. & Lucas, Marilyn T. & Fung, Mark, 2017. "Managing blood inventory with multiple independent sources of supply," European Journal of Operational Research, Elsevier, vol. 259(2), pages 500-511.
    18. Liming Liu & Zhaotong Lian, 1999. "(s, S) Continuous Review Models for Products with Fixed Lifetimes," Operations Research, INFORMS, vol. 47(1), pages 150-158, February.
    19. Boulaksil, Youssef & Hamdouch, Younes & Ghoudi, Kilani & Fransoo, Jan C., 2021. "Comparing policies for the stochastic multi-period dual sourcing problem from a supply chain perspective," Other publications TiSEM 242598b9-99de-4a3c-a1a9-4, Tilburg University, School of Economics and Management.
    20. William L. Cooper, 2001. "Pathwise Properties and Performance Bounds for a Perishable Inventory System," Operations Research, INFORMS, vol. 49(3), pages 455-466, June.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:inm:ormsom:v:13:y:2011:i:4:p:420-438. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Chris Asher (email available below). General contact details of provider: https://edirc.repec.org/data/inforea.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.