Blood order and collection problems with two demand classes and emergency replenishment

Abstract

Matching blood supply and demand in an efficient manner is the key to minimize the shortage and waste in blood supply chain management. Blood heterogeneous demand further increases the difficulty and brings much challenges to blood supply chain management. To alleviate above problems, we build blood ordering and collection models in blood supply chain under two emergency replenishment strategies by considering blood heterogeneous demand. The blood heterogeneous demand is modelled as two demand classes, i.e., high-priority stochastic emergency demand and low-priority regular deterministic demand. We examine the optimal ordering policy of the hospital and optimal collection policy of the blood center. The effect of different emergency replenishment strategies and high-priority stochastic emergency demand fluctuation are analysed. Through numerical analysis, we find that facing a low demand fluctuation, the hospital prefers to order enough blood instead of replenishing during the period, while the blood center prefers to provide emergency replenishment for both demands. In the situation of high fluctuation, emergency replenishment for both demands is the best for the hospital while the blood center would not like to provide replenishment and hope the hospital to order for once. However, emergency replenishment for both demands is always better off for the entire blood supply chain. The hospital and blood center can be coordinated to agree on the emergency replenishment for both demands and a Pareto improvement can be achieved.