Determining Centralized Inventory SKUs in a Space and Cost Constrained Hospital Environment using Integer Linear Programming

Abstract

This research determines centralized inventory stock keeping units (SKUs) in a space and cost constrained hospital environment using Binary Integer Programming (BIP). The case study takes place at the IWK hospital in Halifax where the demands of consumable medical supplied significantly increased the outbreak of COVID 19. Due to the increased demands, decision makers of the IWK wish to investigate how their centralized inventory space can be used more efficiently and effectively. Therefore, this research proposes a generic BIP model to determine centralized inventory SKUs based on space, cost, and essentiality of SKUs. The model is generic and applicable to any health system by appropriately choosing its parameters. The model determines the list of centralized inventory SKUs with appropriate inventory policies: order quantity, reorder points and safety stocks. Furthermore, a case study at the IWK is completed with recommendation on setting inventory policies for new SKUs.