Computer-assisted inventory control utilizing ABC inventory analysis and EOQ in a hospital pharmacy

Area of Science:

• Pharmacy Management
• Operations Research
• Supply Chain Management

Background:

• Effective inventory control is crucial for hospital pharmacies to manage costs and ensure medication availability.
• Traditional inventory systems may struggle with optimizing stock levels and minimizing carrying costs.
• Previous systems often faced challenges in preventing out-of-stock situations and maximizing purchasing efficiency.

Purpose of the Study:

• To develop and implement a practical inventory control system for a hospital pharmacy.
• To reduce out-of-stock occurrences and minimize total inventory costs.
• To enhance the efficiency of the pharmacy's purchasing power.

Main Methods:

• Determined fixed and variable ordering and carrying costs.
• Classified inventory into A, B, and C categories based on usage and cost.
• Calculated Economic Order Quantity (EOQ) for A items and used min/max levels for B and C items.
• Developed a weekly ordering schedule for A items using computer-generated listings.

Main Results:

• Inventory control efficiency increased by 50% post-implementation.
• Achieved modest cost savings (less than $5,000) compared to the previous system.
• Out-of-stock situations for B and C items persisted at similar frequencies.

Conclusions:

• The combination of EOQ and ABC analysis offers an effective inventory control strategy for hospital pharmacies.
• The implemented system demonstrably increased operational efficiency and yielded some cost savings.
• Closer adherence to ordering procedures for B and C items is recommended to further mitigate stock-outs and manage unpredictable demand.