Review Article

Simulation and Modeling Efforts to Support Decision Making in Healthcare Supply Chain Management

Table 1

Summary data on proposed simulation models to support decisions making in healthcare SCM.

SMSCM scopeDecision levelProblem type and descriptionModeling approachDecision variablesObjective functionsMonetary valueCustomer service initiativeAssumptions and constraintsIssues

[37]Management-Distribution (drugs—outpatient clinics) Planning Optimization Manage fair and equitable scare drug distribution for outpatient clinicsDeterministic (multiobjective) Allocation heuristic solution Dollar value of drug k received by clinic; 0-1 variable represents whether the clinic obtained any allocation of drug kMinimize left over budget; minimize differences between allocation ratios and ordersAsset utilization Product availability Clinic constraints (clinics do not exceed their allocated budget); pharmaceutical firm constraints (dollar value of total disbursement does not exceed the limits in the settlement agreement); allocation constraints (dollar value of allocated drug to a clinic is ≤ the ordered amount; and meet at least the minimum order quantity by each clinic for each drug) Complexity; scalability; generalization

[31]Management Inventory management (drugs—Inpatient pharmacy) Planning Optimization Determine the optimal inventory policy for pharmaceutical drugsStochastic (Markov decision process)Inventory level; expected patients’ demands; volume (drug order quantities)Minimize wastage and holding cost; maximize timely access Cost behavior Product availability and response time No back-logging of demand; demands to be fulfilled at the same day even if it involves procuring the drug from different hospital;Tie patient type to demand variability; drug availability from other facilities

[38]Management Inventory management (all products—hospital)Strategic and planning Optimization Determine the optimal stock levels of overall products in hospitalsStochastic (constraint programming)Service level; frequency of delivery; stock-up amountMaximize the minimum service level; maximize the average service levelAsset utilizationProduct availabilityProducts supplied in regular (normally distributed) manner; Inventory constraint (relationship between decision variables is kept consistent); space constraint; criticality constraint (users can impose constraints to fix a product to highest level: 99%)Demand in hospitals usually exhibits highly dynamic and uncertain pattern

[39]Design logistic process (flow of sterile instruments from CSSD to OT)Strategic and planning Optimization Redesign SCM process to optimize the work process for sterilization logistics Hybrid (dynamic programming) Capacity; frequency of delivery; the extent of outsourcingMinimize the total cost (transportation; OT storage; instrument usage cost) Cost behaviorProduct availability and response time Outsourcing CSSD; the sterile net can be used only once per day; demand satisfaction Counterbalance the increase in transportation cost; increase OT storage capacity to handle weekly nets supplies

[10]Design logistic process (overall SCM) Strategic and planning and operational Optimization Re-design the configuration of the hospital SCM; assuring efficient process and sufficient inventory levelStochastic (graph theory); Heuristic approaches: Tabu Search (TS); and Variable Neighborhood Search (VNS)Volume (inventory quantities at each node) Minimize total cost of inventory (acquisition transportation; administrative; inventory carrying) Asset utilization and cost behavior Product availability and response timeAdministrative cost is fixed; storage constraints are constant through the planning process; demand satisfaction; aggregating all items; producers supply capacity affect all potential buyers; flow persistence between SC membersExpensive computing; sudden increase in demands

[27]Design logistic process (overall SCM)Strategic and planning and operationalOptimization Re-design the configuration of hospital SCM assuring sufficient inventory level and manpower resources Stochastic (optimal control theory); Heuristic approaches: Tabu Search (TS); and Variable Neighborhood Search (VNS)Service sequence (suppliers deliver at period t; CU is visited at period t); manpower time. Minimize total cost of inventory and human resources costAsset utilization and cost behavior Product availability and response timeTime-restrictions on manpower to accomplish tasks; direct deliveries; products replenished for only suppliers’ who visit the hospital; products replenished at only visited units; storage capacity; demand satisfactionExpensive computing; details of supply work schedules; failed to provide tight schedule as optimal solution