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Criticality of item
Among various inventory control model ,Economic inventory reaches zero. A fixed cost is charged for
order quantity (EOQ) has been commonly used, each order placed, regardless of the numberof units
which attempts to the balance the carrying cost with ordered. EOQ along with ABC-VED analysis is
the cost of running out of the items.[30] It is the level proposed to be the most effective and efficient model
of inventory that minimizes total inventory holding for inventory control.[31] Most of the savings with
costs and ordering costs. EOQ only applies when the ABC-EOQ is reported with the low valueitems (B
demand for a product is constant over the year. and and C items) which were being purchased too
each new order is delivered in total when the frequently.[32]
Representation of EOQ: EOQ can be determined with the help of the following formula :
E.O.Q. =
Where, Oc= Cost Of Order, D = Annual Demand, Hc= Holding Cost/Carrying Cost [in Rs. or Unit]
Factors affecting inventory management pharmacists should hire credible and candid
The following factors is taken in account when employee, proper security and observation training
evaluating pharmacy inventory management:product and monitoring strategies are also important. In
type (generic, brand), inventory size, unclaimed addition, relevant security regarding controlled
prescriptions, inventory shrinkage,returned product substances should be a priority in monitoring
policies and use of formularies.[13] Generic products shrinkage, especially when theft of these substances
consist lower acquition costs compared to bran- is ever more challenging. In hospital pharmacies,
named counterparts,thereby minimize inventory formularies are utilized to enhance inventory
costs. Most product vendors (manufacturers and management, where pharmacists can carry one
wholesalers) have policies regarding products it may therapeutic equivalent product within a class of
be returned. Examples of such policies include medications; thereby reducing overall inventory cost.
providing credits for future orders, product However, limited lists and formularies could serve as
replacement and cash back to the pharmacy. About an impediment in balancing supply and demand in
1.5% of all prescriptions filled by community community pharmacy settings.[35]
pharmacies remain unclaimed. Pharmacists should
monitor such prescriptions and specify a threshold The Role of Information Technology in
time period (e.g. 2 weeks) for returning the product InventoryManagement
tothe shelves.[34] Up to 4.5% of community The value of information technology can be
pharmacy sales is lost due to inventory shrinkage. recognized inpharmacy inventory management,
Inventory shrinkagereferred to losses due to theft,. where computerized systems are broadly available in
shoplifting, and robbery. Unfortunately, employee virtually all pharmacy practice settings in
theft comprisesthe largest source for inventory industrialized countries. Technology makes the
shrinkage incommunity pharmacy settings. While methods of inventory management. and methods of
evaluating inventory management more efficient, teaching, research and referral healthcare
more precise, and moreaccurate. Examples of the role institute of India. Journal of young pharmacists.
of technology in inventorymanagement include 2010;2(2):201-5.
utilizing hand-held scanning devices forperiodic 3. Mahatme MS, Hiware SK, Shinde AT, Salve
inventory control by scanning the barcodes on AM, Dakhale GN. Medical store management:
theproduct packaging or shelf labels, submitting An integrated economic analysis of a Tertiary
purchasing orders electronically after in putting the Care Hospital in Central India. Journal of Young
scanned information into a computer via a web-based Pharmacists. 2012;4(2):114-8.
system, e.g. e-procurement. Nowadays, technology is 4. Temeng VA, Eshun PA, Essey PR. Application
utilized in almost all pharmacy operations, from of inventory management principles to explosive
ordering, procurement, storage, to paying for products manufacturing and supply–A case
products. Pharmacists should employ the benefit of study. International research journal of finance
newer technologies in their practice for better and economics. 2010;38:198-209.
management. of their pharmacy inventory. An 5. Adeyemi SL, Salami AO. Inventory
example of newer technology toimprove product management: A tool of optimizing resources in a
distribution from manufacturers towholesalers to manufacturing industry a case study of coca-cola
pharmacies is the use of radiofrequencyidentification bottling company, Ilorin Plant. Journal of social
(RFID) microchips, or “tag”.[36] Such tags is science. 2010;23(2):135-42.
intended to store information about the 6. Thawani V, Turankar A, Sontakke S,
pharmaceutical product from the manufacturing date Pimpalkhute S, Dakhale G, Jaiswal K, Gharpure
until arriving to and removing from the storage K, Dharmadhikari S. Economic analysis of drug
shelves in pharmacies. Automation in pharmacy expenditure in Government Medical College
inventory management creates additional time for hospital, Nagpur. Indian journal of
pharmacists to provide pharmaceutical care and other pharmacology. 2004;36(1):15.
pharmaceutical services to patients and 7. Doshi R, Patel N, Jani N, Basu M, Mathew S.
customers.[37] Undoubtedly, information technology ABC and VED analyses of drug management in
can beemployed in pharmacy operations to improve a government tertiary care hospital in Kerala.
inventory management and evaluation by appreciably 8. Tersine RJ, Toelle RA. Optimum stock levels for
minimizing procurement costs and protecting against excess inventory items. Journal of Operations
inventory shrinkage because of theft. In addition, the Management. 1984;4(3):245-58.
potential for medication errors is further curtailed 9. Silver EA, Pyke DF, Peterson R. Inventory
when product barcode scanning is employed in management and production planning and
pharmacy practice, especially in hospital pharmacy scheduling. New York: Wiley; 1998.
settings.[38] 10. Monton C, Charoenchai L, Suksaeree J.
Purchasing and inventory management by
CONCLUSION: pharmacist of a private hospital in Northeast of
After reviewing several articles it was seen that Thailand. International journal of pharmacy and
inventory analysis plays important role in the pharmaceutical sciences. 2014;6(5):401-5.
management of pharmacies. In this review, we have 11. Deveshwar A, Modi D. Inventory Management
conveyed concern the usage of inventory control Delivering Profits through Stock Management.
techniques in the healthcare provides significant In6th International Business & Social Science
improvement in patient care, customer relationships Research Conference 2013.
and optimal use of resources. Pharmacy spends a 12. Grablowsky BJ. “Financial management of
large amount of money for buying pharmaceutical Inventory”. Interantional Journal of Production
items. Therefore, pharmacy management requires Economics.2005;93-94:239-52
planning, designing and organizing of the medical 13. Paudel R, Palaian S, Giri B, Hom KC, Sah AK,
stores. Poudel A, Khanal S, Shankar PR. Clinical profile
and drug utilization pattern in an intensive care
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