Modern point-of-use technology at hospitals has enabled new replenishment policies
for medical supplies. Traditionally used periodic replenishment policies are being
replaced by continuous or hybrid periodic-continuous review policies enabled by the
use of new technology. New technology such as automated dispensing machines used
to store hospital supplies has enabled the use of a new hybrid inventory control policy.
We first study this new hybrid inventory control policy with both periodic and
continuous replenishments permitted, under deterministic and stochastic demand.
For deterministic demand, we derive expressions for the optimal hybrid policy parameters.
For stochastic demand: (i) we develop a simulation-based optimization
approach to find policy parameters and estimate the long-run average cost, and (ii)
we computationally compare the performance of the hybrid policy with traditional
periodic review and continuous review policies. Next we extend our results to consider
multiple items. We propose four different hybrid-joint replenishment policies
for two items. Using a simulation-based optimization approach we find policy parameters
and estimate long-run average cost for each of the four policies. We compare
the performance of the four hybrid-joint replenishment policies with the performance
of periodic and continuous review joint replenishment policies traditionally considered
in the literature. Finally, we study a two-bin inventory replenishment system
used at hospitals to store a large number of supplies. The recent introduction of
radio frequency identification technology in two-bin replenishment systems has allowed
continuous time tracking of inventory. We formulate a semi-Markov decision
model for the two bin replenishment system and we characterize the optimal replenishment
policy. We use a linear program to find the