A Comparison of Inventory Management Models in Automated Dispensing Cabinets at a Large Academic Medical Center

Abstract

Purpose: To compare and evaluate 2 methods of inventory management in automated dispensing cabinets (ADCs). Methods: Ten profiled ADCs had 2 inventory management models implemented over 2 months. Implementation of the models on each ADC involved adjustment of par levels (desired accessible quantities of medication) and removal of medications not used in the past 90 days or more. The par levels of 5 ADCs were adjusted using a formula developed based on the economic order quantity model. The par levels of the other 5 ADCs were adjusted using a formula based on historical average daily usage. The study endpoints include stock out rate, vend:fill ratio, quantity of expired medications, and inventory carrying cost. Results: The total of number of medications stocked in the 10 ADCs was reduced from 3035 in a 2-month pre-implementation period to 2932 in a 2-month post-implementation period yielding a reduction of inventory carrying cost by $11 011. The mean stock out rate in both study groups increased and vend:fill ratio decreased after implementation. The quantity of expired medications increased in the modified economic order quantity formula inventory management model and decreased in the average daily usage inventory management model. Conclusion: The implementation of 2 inventory management models on ADCs had a negative impact on stock out rate and vend:fill ratio, a mixed impact on quantity of expired medications, and a positive impact on inventory carrying cost reduction.