title: Inventory management of reusable surgical supplies.
abstract: We investigate the inventory management practices for reusable surgical instruments that must be sterilized between uses. We study a hospital that outsources their sterilization services and model the inventory process as a discrete-time Markov chain. We present two base-stock inventory models, one that considers stockout-based substitution and one that does not. We derive the optimal base-stock level for the number of reusable instruments to hold in inventory, the expected service level, and investigate the implied cost of a stockout. We apply our theoretical results to a dataset collected from a surgical unit at a large tertiary care hospital specializing in colorectal operations. We demonstrate how to implement our model when determining base-stock levels for future capacity expansion and when considering alternative stockout protocols. Our analysis suggests that the hospital can reduce the number of reusable instrument sets held in inventory if on-site sterilization techniques (e.g., flash sterilization) are employed. Our results will guide future procurement decisions for surgical units based on costs and desired service levels.
authors.affiliation: Schulich School of Business, York University, 111 Ian Macdonald Boulevard, Toronto, ON, M3J 1P3, Canada. adiamant@schulich.yorku.ca.
authors.forename: Adam
authors.initials: A
authors.lastname: Diamant
authors.affiliation: Rotman School of Management, University of Toronto, 105 St. George Street, Toronto, ON, M5S 3E6, Canada.
authors.forename: Joseph
authors.initials: J
authors.lastname: Milner
authors.affiliation: Division of General Surgery, Toronto Western Hospital - University Health Network, 399 Bathurst Street, Main Pavilion, Toronto, ON, M5T 2S8, Canada.
authors.forename: Fayez
authors.initials: F
authors.lastname: Quereshy
authors.affiliation: Oil Sands Suncor Business Centre, Suncor Energy, 885 Memorial Drive, Fort McMurray, AB, T9H 0A8, Canada.
authors.forename: Bo
authors.initials: B
authors.lastname: Xu
mesh_terms: D003107:Colorectal Surgery / Q000295:instrumentation; D006784:Hospitals, Teaching / Q000458:organization & administration; D008390:Markov Chains; D008421:Materials Management, Hospital / Q000379:methods; D009864:Ontario; D013242:Sterilization; D013525:Surgical Instruments / Q000600:supply & distribution*
keywords: Lost-sales inventory management; Markov chains; Sterilization logistics; Stockout-based substitution