Optimal Pharmaceutical Replenishment Policy: The Case of Selected Health Centers in Addis Ababa
| dc.contributor.advisor | Rothkopf,Alexander(PhD) | |
| dc.contributor.advisor | Tilahun,Zelalem(Ass. Prof.) | |
| dc.contributor.author | Demissie,Bezawit Negash | |
| dc.date.accessioned | 2024-04-23T11:00:10Z | |
| dc.date.available | 2024-04-23T11:00:10Z | |
| dc.date.issued | 2023 | |
| dc.description.abstract | Background: The primary goal of inventory management is to establish a replenishment policy that informs when and how much to order and how to maintain an appropriate stock level while optimizing various tradeoffs, such as carrying and re-ordering costs. The need for the healthcare sector to reduce costs has motivated many hospitals to adopt new technology to enhance existing operations. Since 2009, Integrated Pharmaceuticals Logistics System (IPLS) has been used in Ethiopian public health facilities to manage inventory. To the investigator's knowledge, the optimality of the replenishment system to the respective health facilities was not well investigated. Objectives: This study aimed to determine an optimal replenishment policy for managing inventory for selected health centers in Addis Ababa, Ethiopia. Methods: A multiple case study design was used in ten selected health centers. This study primarily uses quantitative data from the pharmacy stores’ database system. Three years of data were extracted from the digital bin card and entered into the pre-tested excel-data extraction tool. Once the data was sufficiently cleaned, a descriptive statistic and correlation using Microsoft Excel 2019 and IBM SPSS version 26. A simulation-optimization approach was used to show the current total inventory cost and develop an optimal replenishment policy. Result: The monetary amount of the program medicines issued from the health centers within three years was 93,922,330.05 ETB, in which Anti-retroviral treatments took the highest percentage, 78.69%, followed by Mother and child health products, 10.8%. When the demand frequency is observed, there is zero demand 50% of the time; this shows high intermittent demand. Demand variability significantly correlates (𝑟 = 0.84) with the health centers' total cost. The lowest total cost was observed in the replenishment policy of every other month with a target customer service level of 90% and realized customer service level of 92.7%. The highest total cost was observed in the replenishment policy of every month with target customer service level of 99% with a total cost of 141,706.4 ETB with realized customer service level of 99.4%. Conclusion: The analysis showed the segregation of products based on their characteristics has a potential advantage since the demand pattern significantly varies among products. The study showed the current IPLS method of determining order up to level resulted in less customer service level and increased the likelihood of overstock. Based on the simulation-optimization model, the less costly replenishment model is 90% target customer service level and every other month replenishment, but it is important to set a target service level based on product characteristics and integrate segregation of products, including the price and demand variability to achieve the optimal replenishment. Recommendation: Health centers may integrate characteristics of products, financial parameters, longer historical data and standard deviation of demand to identify order quantity and review period. The findings from this study can be used to commence further investigation in the fitness of IPLS inventory control system by considering other alternatives with technical and financial feasibility. | |
| dc.identifier.uri | https://etd.aau.edu.et/handle/123456789/2823 | |
| dc.language.iso | en_US | |
| dc.publisher | Addis Ababa University | |
| dc.subject | Replenishment | |
| dc.subject | Inventory | |
| dc.subject | Optimization | |
| dc.subject | Pharmaceutical | |
| dc.subject | Health Center | |
| dc.title | Optimal Pharmaceutical Replenishment Policy: The Case of Selected Health Centers in Addis Ababa | |
| dc.type | Thesis |