Skip to content
Journal article

Objectives of an effective inventory control system

Hughes T ...see all

Am. J. Health Syst. Pharm., vol. 41, issue 10 (1984) pp. 2078-2085

  • 3

    Readers

    Mendeley users who have this article in their library.
  • 6

    Citations

    Citations of this article.
  • N/A

    Views

    ScienceDirect users who have downloaded this article.
Sign in to save reference

Abstract

Quantitative decision-making processes are examined as they relate to hospital pharmacy inventory control. The objective of an inventory-control system is to make inventory decisions that minimize the total cost of inventory, which is distinctly different from minimizing inventory. It is often more expensive to run out of an item (and thus be forced to obtain it through more expensive channels) than simply to keep more units in stock. Several models have been proposed in the literature for minimizing the total cost of inventory through the use of an economic order quantity, which attempts to balance the carrying costs of inventory with the cost of running out of an item. Most pharmacy inventory decisions involve replenishment--how much to order, when to decide to order, and when to place the order. There are three costs associated with pharmacy inventory: (1) carrying costs, (2) shortage costs, and (3) replenishment costs. Many of the proposed models (which are discussed in detail in the article) make certain assumptions that do not hold in the realm of hospital pharmacy. For instance, the "costs" associated with running out of a drug product used in critical care might well involve increased morbidity and mortality, clearly an unacceptable situation. However, the basic tenets of these inventory-control systems should be examined by hospital pharmacy managers and applied when appropriate. The availability of microcomputers and relatively powerful spreadsheets will increase the utility of complex models of inventory control that are too complicated for manual calculations.(ABSTRACT TRUNCATED AT 250 WORDS)

Get free article suggestions today

Mendeley saves you time finding and organizing research

Sign up here
Already have an account ?Sign in

Find this document

  • ISSN: 0002-9289
  • PUI: 14046183
  • SCOPUS: 2-s2.0-0021204132
  • PMID: 6496501
  • SGR: 0021204132

Authors

  • TF Hughes

Cite this document

Choose a citation style from the tabs below