Poster 6

Optimal pharmaceutical replenishment policy: the case of health centers in Addis Ababa (46)

Supply chain management and logistics are critical activities in the pharmaceutical sector. It has become essential for healthcare facilities to fulfill the demands of patients carrying different kinds of pharmaceutical products to improve customer service while lowering relevant costs (Jarrett, 1998; Ryu et al., 2013). Inventory management aims to determine a replenishment policy that informs when and how much to order and maintain an appropriate stock level, thus optimizing different tradeoffs such as carrying and re-order costs (Jalali and Nieuwenhuyse, 2015). Logistics services comprise physical activities (e.g., transport, storage) and non-physical activities. To balance logistics costs, those non-physical activities like decision-making and information systems play an essential role (Lakshmi, 2017). Even if massive amounts of data are archived manually and electronically in Ethiopia, their use in decision-making is limited. Given pharmaceutical high cost and perishability, the study is required to assist inventory managers in developing optimal inventory management policies. In this regard, operational research offers a wide range of methodologies that can help and significantly improve the operations of health facilities. It also overcomes the complexity of other inventory models (Jalali and Nieuwenhuyse, 2015). This study seeks to evaluate the current replenishment policy, review inventory models, and propose optimal replenishment methods.

Bezawit Demissie¹, Zelalem Mekonnen¹, Peter Ellison²

¹Addis Ababa University, ²Independent Researcher