Replenishment prioritization of highly perishable goods : a case study on nuclear medicine

Abstract

Serving customers in a nuclear medicine supply chain requires frequent and responsive replenishments. Nuclear medicine is a special category of perishable goods that is subject to rapid, but predictable radioactive decay. This study examines the viability of differentiating service through segmenting customers in Tyco Healthcare's (THC's) nuclear medicine supply chain. More specifically, the network of pharmacies that THC serves is divided into two groups-THC-affiliate pharmacies and independent pharmacies-and their demand characteristics are examined. This study rejects the hypothesis that THC should differentiate service by pharmacy affiliation after comparing the demand characteristics of the THC and independent pharmacies. Alternatively, the study tests the hypothesis that product segmentation is a viable option by comparing the demand characteristics of THC's products. This study does not reject the alternative hypothesis and presents proposed policy for coordinated replenishment. To facilitate the comparative analyses, THC's nuclear medicine supply chain is first described. Finally, recommendations on how to improve supply chain performance follow the hypothesis testing.