A Review of Inventory management in pharmacy practice:
Dealing with inventory can be intricate unless an organization has a good inventory control system. The purpose of this system is to maximize efficiency and effectiveness. Efficiency is to minimize inventory costs and effectiveness is to meet the customer demands. Inventory control involves maintaining adequate stock of medications, as well as storing those medications in a safe and secure manner.
It also means keeping track of the purchasing and distribution of the medications. Good inventory control allows the pharmacy to have enough medications on hand to fill prescriptions and orders, without having so much stock that drugs deteriorate before they can be used Askew and Smith-Stoner, Inventory Acquisition Purchasing is not just a routine function to keep inventories on the shelf.
However, since pharmacies literally spend a lot to acquire medications and other goods, purchasing is actually a substantial investment process. According to the research of Desselle and Zgarrickthe objective of purchasing is to obtain the right products in the right quantity at the right price at the right time from the right vendor.
Right quantity means having just enough products on hand to cover consumer demand at any given time. In order to estimate the minimum quantity needed to meet the demand, the purchasing agent must know how many items on hand, when to order, and how much to order.
Most businesses place an order for replenishment of inventory when the inventory level is already at low point.
This low point is predetermined by the management using the reorder point ROP system. A reorder point is simply a level of inventory that is designated as the signal to replenish. Whenever the inventory level reaches the reorder point, a replenishment order is placed.
It is set such that the inventory level will reach zero at about the time the replenishment order is expected to arrive. Generally, the quantity to reorder depends on the level of demand and other factors such as market availability, storage space available, and shelf life considerations Mercado, Formula for computing the reorder point is: When lead time and demand are not certain, the firm must carry out extra units of inventory, called safety stock, as protection against possible stock-outs Siegel and Shim, Minner defined safety stock as the expected inventory just before the next order arrives.
Using this technique of reordering requires a system that can track the inventory level at any given time. This can be accomplished using a perpetual accounting record or a visual method.
On the other hand, having too little inventory may result in lost sales and profits when the product is not available for purchase. Not having enough products available also may result in the loss of customers in the future.
The management therefore must know the right amount of inventory to order while maintaining the right amount of stock. To determine this, the purchasing agent must identify the economic order quantity EOQ.
EOQ is the optimum amount of goods to order each time to minimize total inventory costs Shim and Siegel, It describes the level of inventory and reorder quantity at which the combined costs of purchasing and carrying inventory are at a minimum. Purchasing or ordering costs include costs of placing the order and received goods while carrying or holding costs include the storage, handling, property tax, and insurance costs, as well as the required return rate on the inventory investment Siegel, Shim, and Hartman, The classical formula for EOQ model is Where: Improper storage can cause a product to ruin, resulting in a loss of inventory and money.
According to Bizmanualz, Inc. Damage control includes insuring and keeping inventory clean and properly sheltered.Page Archives of Pharmacy Practice Archives of Pharmacy Practice Vol.
2, Issue 4, Inventory Management in Pharmacy Practice: A Review of Literature. Recent review article on Pharmaceutical Inventory Models ashio-midori.com and ashio-midori.comkeyan* 1Department of mathematics, SAS, VIT University, Vellore, T.N, India.
Abstract:The inventory management system plays a vital role in a pharmaceutical industry.
For every business, managing an inventory is important whether it is small or big, domestic or. chapter 45 Hospital pharmacy management Summary Purpose and functions • Membership • Hospital formulary management • Drug use review Inpatient medication management Medication distribution systems • Bulk ward Procedures for procurement and inventory management.
The other literature is an Online Sales and Inventory Management System (SIMS) (Aparanjitha, ).This project is aimed at developing an online Sales and Inventory Management System (SIMS) for a departmental store. Plan, direct, or coordinate the actual distribution or movement of a product or service to the customer.
Coordinate sales distribution by establishing sales territories, quotas, and goals and establish training programs for sales representatives.
Thus, efficient management of health care inventory systems requires a different approach than a periodic-review reorder point model. According to Woosley, there are at least three limitations for use of the continuous replenishment model in the context of health care supply systems .