A model for designing a procurement-inventory system as a defence against a recurring epidemic

Abstract

The COVID-19 pandemic has caused a general shortage of personal protection products and therapeutic devices, which has highlighted the need for each country to have its own production resources and not depend solely on imports. Given the time that elapses between the onset of an epidemic and its detection, as well as the time required to activate production and the lead time of purchasing operations, it is necessary to have a permanent reserve, which we call shield stock, in order to immediately meet the demand for equipment at the beginning and throughout the course of the epidemic. This situation is analysed in order to identify the most relevant decisions in the scenario described, formulate a cost optimisation model and develop procedures to find the most economical combination of shield stock, domestic production capacity and imports to guarantee the immediate satisfaction of demand and the restoration of the shield stock after the epidemic, as a preventative measure. The procedure is illustrated with a specific pattern of the spread of the epidemic and some numerical examples.