The inventory centralization impacts on sustainability of the blood supply chain

Abstract

This paper studies the significance of inventory centralization at the second echelon of a two-echelon supply chain with perishable items when the agents of the second echelon use an (S−1,S) inventory policy. The replenishment at the first echelon is considered to be stochastic. The context in which the studied problem exists is in the blood supply network where the first echelon includes a single blood bank that receives stochastic supply from donors. The second echelon contains hospitals receiving external demands (transfusions). In our proposed structure, some of the hospitals in close proximity of each other maintain centralized inventories to serve their demands in addition to the deman..