Nowadays, increase in the prevalence of preventable viruses, age-related treatments and similar health problems that are transmitted by non-organic nutrients or environmental factors, escalate drug usage. To meet this accelerated request, a pharmacy typically store pharmaceutical products and their equivalences in their depots before being sold to the customer. Therefore, several problems may rise about the stock of the original drug and its equivalence such as non-optimal storing of products in depots, lack of storage space, shortening of product life, and cost of medical waste in non-resale products. In this study, a general continuous review inventory model with backorders and equivalences, which is not in the literature, has been proposed. A case from a big pharmacy is analyzed by using realistic parameters in order to show the efficiency of the model in real life inventory systems. The results confirm that the proposed model is very accommodating to minimize inventory cost with optimized order quantities and reorder points.
A CONTINIOUS REVIEW INVENTORY MODEL WITH BACKORDERS AND EQUIVALENCIES
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