Inventory Sharing for Perishable Products: Application to Platelet Inventory Management in Hospital Blood Banks

Abstract

A Simple and Provably Good Inventory Policy Led to a Significant Reduction in Platelet Outdates Platelets are critical blood products. The management of platelet inventory is particularly challenging because of its perishable nature with a short shelf life. This paper studies how the wastage of platelets and, more broadly, perishable products can be reduced through inventory sharing. The authors derive structural results on the optimal ordering and transshipment policies for a two-location perishable inventory system and prove that an easy-to-implement myopic transshipment policy is optimal for a few special cases relevant to practice and serves as a lower bound on the optimal transshipment policy for more general settings. This policy has been successfully implemented by the Emory University Hospital System, which led to a reduction of approximately 20% in platelet outdates. Moreover, this paper also sheds light on how the presence of inventory sharing affects the optimal ordering quantities and provides insights that significant depart from existing findings for nonperishable inventory systems.