Problem Statement and Formulation
Hospital networks administer a plethora of time sensitive products, including things like oxygen tanks and drugs, which change in potency over time. Expired drugs can form harmful material or result in contamination with germs when kept past their expiration date. A 2014 study of 14 Minnesota hospitals estimated that United States throws away 125 million pounds of pharmaceuticals in hospitals due to incorrect orders and expirations. CBS reported, in October of 2014, during a piece called The Cost of Cancer that some drugs, such as Zaltrap, cost as much as $1,400 a dose[3]. With such high waste, it is financially and environmentally beneficial for hospitals to adequately manage their inventory and reduce expirations. This paper explores the financial benefit of inventory sharing within hospital networks.
The goal of this work is to model the basic functions of a hospital network in relation to product usage in order to capture trends in data and provide solutions to the following problems: Does inventory sharing provide substantial cost benefits to the hospital network, and if so, at what stage in a product’s life should a hospital transfer to another hospital occur?
The goal of this work is to model the basic functions of a hospital network in relation to product usage in order to capture trends in data and provide solutions to the following problems: Does inventory sharing provide substantial cost benefits to the hospital network, and if so, at what stage in a product’s life should a hospital transfer to another hospital occur?