Pharmacy stock surveillance records track the categorical status of essential medications and test kits by placing each commodity into one of 4 programmatically defined categories: good, sufficient, threatened, or stockout
. The category of "good," indicated that inventory levels of a specific commodity not only met the forecasted need for the week but also maintained the recommended 1-month buffer for that product.
While a stockout
can negatively impact customer service and loyalty, it also has a significant impact on profitability for the supply chain.
They show that the loss-averse solutions are different from the loss-neutral solutions since loss aversion behaviors of a newsvendor affect the order quantity, pricing, and advertising decisions; specifically, the order quantity increases with the stockout
aversion parameter and decreases with the surplus aversion parameter.
models empirical tests in a retail situation.
The nurses who operate the rehydration unit reported being out of zinc for two full months in 2012 and having intermittent shorter periods of stockouts
The system considers four cost components (as mentioned above), discrete and varying demand and lead time that are not subject to assumptions of probability distribution, and four cases of review policies and demands during stockout
. To the best of our knowledge, no mathematical expressions for a problem with this scope have been reported in the literature.
The optimization problem is to achieve the stockout
risk target with the optimal cost minimizing (Q,r) inventory policy.
Still, without an understanding of stockout
costs, one cannot assess the costs and risks of holding inventory.
During 2014, a total of 50 (26%) of the 194 WHO countries reported experiencing a national level stockout
, or shortage of supply, of at least one vaccine lasting at least 1 month.
States have also been directed to identify vulnerable areas where supply shortages occur and ensure that stockout
' situations do not occur especially of items of common consumption, he added.
In the Intentions-Actions-Reactions framework (Bendoly et al., 2006), it is noted, "in inventory management, a common objective is to minimize the sum of expected holding and stockout
costs [an intention].
In case of a manufacturer, shortages and stockout
are allowed; consequently, shortage costs are considered during the stockout
If we define the optimal inventory levels as the stock level that ensures that the system does not experience any stockout
of both products, then the diagrammatic illustration is as shown in Figure 1 above.
It apparently indicates that some of the objectives, including minimization of expected annual cost, expected annual number of stockout
occasions, and expected annual number of items stocked out, are not conflicting with each other.