Inventory management of perishable health products: a decision framework with non-financial measures

Duong, Linh, Wood, Lincoln and Wang, William (2020) Inventory management of perishable health products: a decision framework with non-financial measures. Industrial Management & Data Systems . ISSN 0263-5577

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This research proposes a decision framework for using non-financial measures to define a replenishment policy for perishable health products. These products are perishable and substitutable by nature and create complexities for managing inventory. Instead of a financial measure, numerous measures should be considered and balanced to meet business objectives and enhance inventory management.

This research applies a multi-methodological approach and develops a framework that integrates discrete event simulation (DES), analytic hierarchy process (AHP) and data envelopment analysis (DEA) techniques to define the most favourable replenishment policy using non-financial measures.

The integration framework performs well as illustrated in the numerical example; outcomes from the framework are comparable to those generated using a traditional, financial measures-based, approach. This research demonstrates that it is feasible to adopt non-financial performance measures to define a replenishment policy and evaluate performance.

The framework, thus, prioritises non-financial measures and addresses issues of lacking information sharing and employee involvement to enhance hospitals' performance while minimising costs. The non-financial measures improve cross-functional communication while supporting simpler transformations from high-level strategies to daily operational targets.

Keywords:Perishable inventory management, Substitutable, Decision systems
Subjects:N Business and Administrative studies > N900 Others in Business and Administrative studies
Divisions:College of Science > National Centre for Food Manufacturing
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ID Code:40596
Deposited On:21 May 2020 15:32

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