A new model proposal for inventory problem in the pharmaceutical supply chain

In pharmaceutical enterprises, keeping up with global market conditions is possible with properly selected supply chain management policies. Generally; demand-driven classical supply chain model is used in the pharmaceutical industry. However, vendor managed inventory control provides important developments to overcome uncertainties throughout the supply chain. In this study, a new mathematical model is developed to solve an inventory problem in the pharmaceutical supply chain. Unlike the studies in literature, the "shelf life and product transition times" constraints are considered, simultaneously, first time in the pharmaceutical production inventory problem. The problem is formulated as a mixed-integer linear programming (MILP) model with a hybrid time representation. The objective is to maximize total net profit. Effectiveness of the proposed model is illustrated considering a classical and a vendor managed inventory (VMI) supply chain on an experimental study. Finally the mathematical model is compared to another model in literature and the results show that proposed model is superior. Also this model is applicable in various sectors with perishable products (milk, yogurt, cheese, cement etc.) inventory control.