Achieving cost-efficient management of drug supply via economic order quantity and minimum-maximum stock level

Background: A good drug inventory planning system is important for an efficient budgeting, procurement, and cost control of drugs. When stagnant drugs in the inventory are too much, wastage due to expired and spoiled drugs could occur. These will not only cause loss of income but could also jeopardize healthcare service delivery. Research design and methods: This study aimed to determine the most efficient and effective management of stagnant and shortage drugs by comparing three pharmacy logistic methods; the economic order quantity (EOQ), minimum-maximum stock level (MMSL), and the traditional consumption of drug inventory, at RA Basoeni Hospital, Mojokerto. Drug inventory was analyzed to calculate the opportunity loss, opportunity cost, and proportions of both stagnant and shortage drugs. Results: We found that EOQ and MMSL performed best for control of stagnant drugs and shortage drugs, respectively. Both methods had proved as effective pharmacy logistic planning. In addition, EOQ produced the lowest opportunity cost for stagnant drugs besides the lowest opportunity loss for shortage drugs. Conclusion: The study concluded that EOQ is the most effective and efficient method to manage stagnant and shortage drugs at hospital pharmacy.