Inventory Sharing for Perishable Products : Application to Platelet Inventory Management in Hospital Blood Banks

Platelets are critical blood products. The management of platelet inventory is particularly challenging due to its perishable nature with a short shelf-life. Motivated by a platelet inventory management problem at a two-location hospital system, we study how the wastage of platelets, and more broadly perishable products, can be reduced through inventory sharing. In particular, we consider a system with two locations and a single product (e.g., a two-hospital system sharing blood products such as platelets). Each location faces a stochastic demand, and products can be transshipped from one location to the other after demand realization. At each location, products are issued in a first-in first-out (FIFO) manner. Although the state of such a complex system consists of the inventory levels of different product ages at both locations, interestingly, we show that the direction of transshipment can be determined by simply comparing the age of the oldest products at each location after meeting demand. Based on this and other structural results, we then prove that a myopic transshipment policy is optimal for a special case motivated by our case study and serves as a lower bound on the optimal transshipment quantity for more general settings. Our analysis also sheds light on how inventory sharing affects the optimal inventory levels for perishable products. Because of its competitive performance and simplicity, our proposed myopic transshipment policy has been implemented by our partner hospital system, which led to a reduction of approximately 20% in platelet outdates