Robust Optimization of the Pharmaceutical Supply Chain for Minimizing Expiration and Wastage

Abstract

This thesis addresses the optimization of a three-echelon pharmaceutical supply chain for manufacturing and distributing medication products. The pharmaceutical supply chain (PSC) is of great importance and complexity as it requires efficient medication production, inventory management, and distribution methods to save patients' lives. In addition, it is considered a complex supply chain since it operates under different uncertainties and includes the perishability of medication. Pharmaceuticals accounted for $328 billion out of the $3.24 trillion annual healthcare costs in the United States in 2015 (Plunkett, 2015). The proposed three echelon robust optimization model considers aspects of product perishability, demand uncertainty, and emission when optimizing the manufacturing and distribution of medication products. Two different models were optimized using the proposed approach to test its effectiveness and size scalability. The sensitivity analyses performed provide managers with a helpful understanding of the parameters that affect the developed (PSC) the most. From the obtained results, it can be concluded that managers can use the proposed robust approach to perform a quick and easy (PSC) optimization while accounting for demand uncertainty, product perishability, and resulting emissions to make well-informed decisions.

Date of Award	Jun 2021
Original language	American English