Inventory-Responsive Donor Management Policy: A Tandem Queueing Network Model

48 Pages Posted: 4 May 2021 Last revised: 30 Jan 2023

See all articles by Taozeng Zhu

Taozeng Zhu

Dongbei University of Finance and Economics

Nicholas Yeo

Xi'an Jiaotong-Liverpool University (XJTLU)

Sarah Yini Gao

Singapore Management University - Lee Kong Chian School of Business

Gar Goei Loke

Rotterdam School of Management

Date Written: April 29, 2021

Abstract

Problem definition: In the blood donor management problem, the blood bank incentivizes donors to donate, given blood inventory levels. We propose a model to optimize such incentivization schemes under the context of random demand, blood perishability, observation period between donations, and variability in donor arrivals and drop-outs.

Methodology/results: We propose an optimization model that simultaneously accounts for the dynamics in the blood inventory and the donor’s donation process, as a coupled queueing network. We adopt the Pipeline Queue (Bandi and Loke 2018) paradigm, which leads us to a tractable convex reformulation. The coupled setting requires new methodologies to be developed upon the existing Pipeline Queue framework. Numerical results demonstrate the advantages of the optimal policy by comparing it with the commonly adopted and studied threshold policy, and a no-incentivization benchmark. Our optimal policy can effectively reduce both shortages and wastage.

Managerial Insights: Our model is the first to operationalize a dynamic and heterogeneous donor incentivization scheme, by determining the optimal number of donors of different donation responsiveness to receive each type of incentive. It can serve as a decision-support tool that incorporates practical features of blood supply chain management not addressed thus far to the best of our knowledge. Simulations on existing policies indicate the dangers of myopic approaches and justify the need for smoother and forward-looking donor incentivization schedules that can hedge against future demand variation. Our model also has potential wider applications in supply chains with perishable inventory.

Keywords: blood collection, donor management, perishable inventory management, humanitarian operations, Pipeline-Queue

Suggested Citation

Zhu, Taozeng and Yeo, Nicholas and Gao, Sarah Yini and Loke, Gar Goei, Inventory-Responsive Donor Management Policy: A Tandem Queueing Network Model (April 29, 2021). Available at SSRN: https://ssrn.com/abstract=3836600 or http://dx.doi.org/10.2139/ssrn.3836600

Taozeng Zhu (Contact Author)

Dongbei University of Finance and Economics ( email )

Dalian
China

Nicholas Yeo

Xi'an Jiaotong-Liverpool University (XJTLU) ( email )

Suzhou, 215123
China

Sarah Yini Gao

Singapore Management University - Lee Kong Chian School of Business ( email )

469 Bukit Timah Road
Singapore 912409
Singapore

Gar Goei Loke

Rotterdam School of Management ( email )

Erasmus University
Burgemeester Oudlaan 50
Rotterdam, 3062 PA
Netherlands
003185741069 (Phone)

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