Managing blood inventory with multiple independent sources of supply

Kartikeya Puranam, David C. Novak, Marilyn T. Lucas and Mark Fung

European Journal of Operational Research, 2017, vol. 259, issue 2, 500-511

Abstract: This paper focuses on the management of red blood cells (RBCs) by a large medical center within a regional blood exchange network. We provide both a theoretical and managerial contribution to the periodic-review fixed lifetime perishable inventory literature by considering multiple independent sources of supply. One source supplies blood via a typical standing order process. The other sources are smaller lower usage hospitals that randomly transfer blood to the medical center. Transferred blood is characterized by a much shorter average lifetime than blood supplied via standing order and introduces additional uncertainty into the inventory management process. We propose a solution approach that can be readily applied in practice and solve the multi-period cost minimization problem using a dynamic program. We provide numerical examples and demonstrate that our solution approach outperforms a corresponding base stock policy as well as the ordering policy that was actually used by the medical center.

Keywords: Inventory; Blood management; Perishable products; Dynamic programming; Stochastic supply (search for similar items in EconPapers)
Date: 2017
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Citations: View citations in EconPapers (10)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:ejores:v:259:y:2017:i:2:p:500-511

DOI: 10.1016/j.ejor.2016.11.005

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