A Comparison of Inventory Management Models in Automated Dispensing Cabinets at a Large Academic Medical Center

Area of Science:

• Pharmacy Practice
• Healthcare Operations
• Supply Chain Management

Background:

• Automated dispensing cabinets (ADCs) are crucial for medication management in healthcare settings.
• Optimizing inventory management within ADCs is essential for cost reduction and efficiency.
• Existing inventory models may not fully address the dynamic needs of ADCs.

Purpose of the Study:

• To compare the effectiveness of two distinct inventory management models for ADCs.
• To evaluate the impact of these models on stock-out rates, medication expiration, and carrying costs.
• To determine the optimal inventory strategy for automated dispensing cabinets.

Main Methods:

• Ten automated dispensing cabinets (ADCs) were utilized for a two-month comparative study.
• Two inventory management models were implemented: one based on economic order quantity (EOQ) and another on average daily usage.
• Par levels were adjusted, and unused medications were removed to optimize stock.

Main Results:

• Overall medication inventory decreased, leading to a significant reduction in inventory carrying costs ($11,011).
• Both models resulted in an increased stock-out rate and a decreased vend:fill ratio.
• The EOQ model saw an increase in expired medications, while the average daily usage model showed a decrease.

Conclusions:

• Implementing these inventory management models on ADCs negatively affected stock availability (stock-out rate, vend:fill ratio).
• The impact on expired medications varied between the models, with one showing improvement and the other a decline.
• A significant reduction in inventory carrying costs was achieved, demonstrating a key benefit of the implemented models.