693 / 2024-05-13 10:21:10

On the Value of Warehouse Sharing in the Inventory System for Medical Consumables

medical consumables, inventory management, warehouse sharing

In the healthcare services industry, inventory management and distribution play an important role in determining its success, and a large portion of that inventory is medical consumables,including such as syringe, bandage, and etc. We investigate the value of warehouse sharing in a decentralized supply chain for medical consumables, where hospitals contract the third-party service providers to manage their inventory and suppliers and third-party service providers make decisions independently. In an emerging trend of the third-party service provider managed inventory, with the rapid development of information technology, third-party companies are attempting to establish regional central warehouses to replace traditional single warehouses to enable warehousing sharing in order to facilitate horizontal collaboration, reduce costs and increase the frequency of deliveries. We respectively build the cost functions for each participant in the supply chain under the traditional single warehouse model and the regional center warehouse model based on a stylized continuous time, constant demand setting. Then we conduct numerical experiments based on realistic firm data to compare the costs. We find that the optimal order intervals of suppliers and the third-party service provider interact with each other, and that sharing always favors suppliers in most cases. For the third-party service provider, on the other hand, the value of sharing is affected by the number of suppliers, the number of hospitals, and a set of cost parameters.