case study : USKUDAR HOSPITAL BLOOD BANK (UHBB)

The management of blood is an important area within health care delivery system. Blood banks have been developed which perform the functions of procurement, storage, processing, and distribution of blood. The uncertainties associated with both supply and demand usually result in the maintenance of relatively large buffer stocks. Blood bank inventory models are complex for several reasons:

1). both supply and demand are random; 2). approximately 50% of all blood demanded “crossmatched” and held for a particular patient are eventually found not to be required for that patient; 3) blood is perishable, the present legal lifetime being 21 days in most areas; and 4) each blood bank typically interacts with a number of other banks.

Assume that UHBB is in the process of studying the inventory policies of its blood bank. It is interested in determining the optimal buffer stock to maintain. The model is to be applied to the entire inventory of blood used by the hospital. Subsequently, further analyses can be conducted for each type of blood.

Mean annual demand is 160,600 units of blood (based on 365 days). Lead time for receiving replenishment supplies from the regional cooperative blood bank is deterministic and equal to two days. The carrying cost of blood is estimated at TL 2.25 per unit per year. Ordering cost is estimated at TL63 per order. The optimal order quantity is approximately 3000 units of blood per order.

UHBB has worked out a loan management with a private blood bank in Uskudar whereby if UHBB incurs a temporary shortage of blood, it can immediately barrow units at a cost of TL1.50 per unit. The agreement also specifies the replacement of the borrowed blood units when UHBB receives its next replenishment supply.

Lead time demand (that is, demand for any two-day period) is stochastic. It is characterized reasonably well by the empirical distribution given below. The mean of this distribution is 880.

Lead Time Demand: UHBB

Class Intervals                      Lead Time                                                     Cumulative

for Lead                                 Demand                     Probability                 Probability

Time Demand                       (d_L)                            f(d_L)                           F(d_L)

790 but under 810                 800                            0.02                           0.02

810 but under 830                 820                            0.05                           0.07

830 but under 850                 840                            0.07                           0.14

850 but under 870                 860                            0.18                           0.32

870 but under 890                880                            0.36                           0.68

890 but under 910                 900                            0.18                           0.86

910 but under 930                 920                            0.07                           0.93

930 but under 950                 940                            0.05                           0.98

950 but under 970                 960                            0.02                           1.00

Q.1.    a) Determine the optimal reorder point R*                                                  

           b) Calculate the buffer stock

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Status NEW Posted 29 May 2017 05:05 AM My Price 10.00

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