In healthcare, delivering high quality care to the patients typically requires significant investment in supply chain management systems. Inventory management is an important part of any supply chain system. Researchers have indicated great potential for optimizing existing healthcare inventory systems, especially within hospitals. With ever changing needs, product prices and policies, managing inventory of products in hospitals becomes difficult. As time progresses, the inventory policies of products become sub-optimal. In this research, we study multiple echelons of a hospital supply chain considering the distributors, to address the need for an efficient and effective hospital inventory management system. We propose a method consisting of two components: (1) system design and optimization; and (2) system monitoring, evaluation, and forecasting. The system design and optimization methodology includes a sim-heuristic approach where optimization of inventory levels and hospital operations is considered. As time evolves, to monitor the relevant system performance measures over time, control-chart like methods are used. When significant deviations in system performance occur, a re-evaluation of the inventory decision variables and/or system operations is conducted to maintain an efficient inventory system. A hierarchical procedure is used to determine the extent of evaluation of the system. Experimental results are presented to demonstrate the effectiveness of this methodology.

Library of Congress Subject Headings

Hospitals--Inventory control; Business logistics; Operations research

Publication Date


Document Type


Student Type


Degree Name

Industrial and Systems Engineering (MS)

Department, Program, or Center

Industrial and Systems Engineering (KGCOE)


Michael E. Kuhl

Advisor/Committee Member

Katie McConky


RIT – Main Campus

Plan Codes