Inventory Management In Hospital

Inventory is the stock of any item or resource used in an organization. It can be described in financial terms as the sum total value of raw materials; semi processed and finished goods at any given time Chase etal (2004).

Inventory items differs with the type of organization. In a hospital, this includes the drugs and finished products involved in diagnostic and therapeutic services for the patients. Hospitals require an effective inventory management for maintaining a balance between inventory investment and demands for supplies. The basic issue involved in inventory management in hospital is to ensure that adequate amount of drugs are available to meet the demand of the organization, while at the same time ensuring that too much inventory

Literature search provides sufficient insights into inventory management techniques in tertiary care hospitals. But there is paucity of similar studies conducted in primary level health care centers which provide medical services to the majority of the population, especially in developing countries like Ethiopia Devnani etal (2010). It is highly essential that primary health care systems with limited resource settings have effective inventory management techniques in place to provide acceptable and affordable health care.

ABC analysis is an important tool to identify the drugs that require greater managerial control Ramakrishnan Ramanathan∗(2006). High cost and consumption drugs come in priority which causes great clinical and economic impact. At beginning, it is important to identify most costly drugs which consume major portion of budget. After that make strategy for further study and make out the use pattern which will help in making suitable

To alleviate the limitation of ABC analysis, another comparative technique named as VED has come into existence. VED analysis is based on critical value of items. Based on criticality three categories are formed: vital, essential and desirable. A combined ABC-VED analysis can be considered to take the advantages of both ABC and VED analysis.

What I want to do this study is in Ayder Referral hospital these management problems are exist. In the hospital more than 4000 drugs are exist from these drugs around 412 items are stock out and overstock repeatedly as the organization document shows. These problems are due to ineffective use of EOQ model on their organization.

The current classification mechanism used on Ayder Referral hospital is VED analysis to classify items based on their function without applying any model put class of item by visualizing the function of items, but it is not enough to judge the real position of