Inventory Sharing for Perishable Products: Application to Platelet Inventory Management in Hospital Blood Banks

Can Zhang (), Turgay Ayer (), Chelsea C. White (), Joy N. Bodeker () and John D. Roback ()
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Can Zhang: Fuqua School of Business, Duke University, Durham, North Carolina 27708
Turgay Ayer: H. Milton Stewart School of Industrial and Systems Engineering, Georgia Institute of Technology, Atlanta, Georgia 30318
Chelsea C. White: H. Milton Stewart School of Industrial and Systems Engineering, Georgia Institute of Technology, Atlanta, Georgia 30318
Joy N. Bodeker: Emory Healthcare, Atlanta, Georgia 30322
John D. Roback: School of Medicine, Emory University, Atlanta, Georgia 30322

Operations Research, 2023, vol. 71, issue 5, 1756-1776

Abstract: Platelets are critical blood products. The management of platelet inventory is particularly challenging because of its perishable nature with a short shelf life. Motivated by a platelet inventory management problem at a two-location hospital system, we study how the wastage of platelets and, more broadly, perishable products can be reduced through inventory sharing. In particular, we consider a system with two locations and a single product (e.g., a two-hospital system sharing blood products, such as platelets). Each location faces a stochastic demand, and products can be transshipped from one location to the other after demand realization. At each location, products are issued in a first-in, first-out manner. Although the state of such a complex system consists of the inventory levels of different product ages at both locations, interestingly, we show that the direction of transshipment can be determined by simply comparing the age of the oldest products at each location after meeting demand. Based on this and other structural results, we then prove that a myopic transshipment policy is optimal for a special case motivated by our case study and serves as a lower bound on the optimal transshipment quantity for more general settings. Our analysis also sheds light on how inventory sharing affects the optimal inventory levels for perishable products. Because of its competitive performance and simplicity, our proposed myopic transshipment policy has been implemented by our partner hospital system, which led to a reduction of approximately 20% in platelet outdates.

Keywords: Policy Modeling and Public Sector OR; blood banks; platelets; perishable products; transshipment; value of inventory sharing (search for similar items in EconPapers)
Date: 2023
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