Efficient Medical Surplus Recovery

32 Pages Posted: 6 Nov 2015

See all articles by Wee Meng Yeo

Wee Meng Yeo

SimTech

Atalay Atasu

Georgia Institute of Technology - Sustainability

L. Beril Toktay

Georgia Institute of Technology - Sustainability

Date Written: November 6, 2015

Abstract

We analyze not-for-pro t Medical Surplus Recovery Organizations (MSROs) that manage the recovery of surplus (unused or donated) medical products to fulfill the needs of underserved healthcare facilities in the developing world. Our work is inspired by an award-winning North American non-governmental organization (NGO), which utilizes a unique approach to match the uncertain supply of medical surplus with the receiving parties' needs. In particular, this NGO adopts a recipient-driven resource allocation model, where it grants recipients access to an inventory database, and recipients select products of limited availability to fill a container based on their preferences. We first develop an analytical model to investigate the efficiency of this approach. This analysis suggests that the recipient-driven resource allocation model may induce competition for MSRO supplies among recipients and lead to a loss of efficiency through premature orders. Accordingly, we provide a number of operational mechanisms that can help MSROs deal with this problem. These mechanisms are: (i) strategically selecting container capacities while limiting the inventory availability visible to recipients and increasing the acquisition volumes of supplies, (ii) eliminating recipient competition through exclusive single-recipient access to the MSRO inventory, and (iii) focusing on learning about recipient needs as opposed to providing them with supply information, and switching to a provider-driven resource allocation model.

We use real data from the NGO by which the study was inspired and show that the proposed improvements can substantially increase the value an MSRO provides to its recipients.

Keywords: Sustainable Operations, Humanitarian Supply Chains, Reverse Logistics, Medical Surplus

Suggested Citation

Yeo, Wee Meng and Atasu, Atalay and Toktay, L. Beril, Efficient Medical Surplus Recovery (November 6, 2015). Georgia Tech Scheller College of Business Research Paper No. 4. Available at SSRN: https://ssrn.com/abstract=2687198 or http://dx.doi.org/10.2139/ssrn.2687198

Wee Meng Yeo

SimTech ( email )

71 Nanyang Drive
Singapore, 638075
Singapore

Atalay Atasu

Georgia Institute of Technology - Sustainability ( email )

800 West Peachtree St.
Atlanta, GA 30308
United States

L. Beril Toktay (Contact Author)

Georgia Institute of Technology - Sustainability ( email )

800 West Peachtree St.
Atlanta, GA 30308
United States

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