Inventory and order management for healthcare commodities during a pandemic

During the coronavirus pandemic, demand surges and supply chain disruptions have resulted in healthcare commodity shortages. Limitations in modeling approaches forced decision makers to make quick decisions with little information. This paper presents a practical optimization model to guide ordering plans for a set of healthcare commodities and populations, such as masks for health care providers, during a pandemic. We collaborated with several organizations managing inventory for healthcare commodities to identify the key challenges, decisions, and objectives they face during a pandemic. The proposed model differs from other inventory and order management models in that the optimization balances the impact of commodity substitutions with delays in meeting demand forecasts. To balance these impacts, we introduce a Healthcare Commodity Metric that quantifies the relative consequences of delay and substitutions for multiple commodities and populations that vary in criticality. To the best of our knowledge, our model is the first to balance the consequences of delays and substitutions for multiple healthcare commodities during a pandemic. The model supports an agile and collaborative decision-making process needed in a constantly changing environment. The model is agile in that it can be adapted quickly to changes in demand, supply capacities, supply costs, and lead times. The model supports collaborative decision making by estimating the impacts of operational (e.g., ordering) and strategic (e.g., budget) decisions. We present an example use case to illustrate how the model balances delay and substitution and can be used to support agile and collaborative decision making.