Selective Inventory Control Analysis in a Cancer Hospital, A Case Study

Abstract

Cost analysis and inventory analysis plays an essential role in the management of hospital store. Around one-third of the hospital budget is spent on purchasing materials and supplies including medicines. The hospital store is one of the most extensively used therapeutic facilities of the hospital and one of the few areas where a large amount of money is spent on buying items. To explore the feasibility of alphabetical analysis where items are classified into A, B and C categories depending on their annual consumption value, in effective management of cancer hospital store. The ABC and VED (vital, essential, desirable) analysis of the store of Dr B. Booroah Cancer Institute, Guwahati, Assam, India, was conducted to identify the categories of items needing stringent management control. The annual consumption and expenditure incurred on each item of the store for the year 2016-17 was analyzed and inventory control techniques, i.e. ABC, VED and ABC-VED matrix analysis, were applied. The Hospital goods in the store of the hospital consisted of 94 items. The total annual hospital goods expenditure on items issued in 2016-17 was Rs.20, 00,320.32. ABC analysis revealed 16%, 30% and 54% items as A, B and C category items, respectively, accounting for 79%, 16% and 5% of annual hospital goods expenditure of the store. VED analysis showed 9%, 51% and 40% items as V, E, and D category items respectively, accounting for 44%, 46% and 10 % of annual hospital goods expenditure of the store. On ABC-VED matrix analysis, 20.21%, 53.2% and 26.6% items were found to be category I, II and III items, respectively, accounting for 80.3%, 17.9% and 2.8% annual hospital goods expenditure of the store. The ABC and VED techniques need to be adopted as a repetitive practice for optimal use of resources and removal of out-of-stock situations in the hospital store.