Decision Model for the Pharmaceutical Distribution of Insulin

Abstract

In this work, we studied the problem of the efficient distribution of insulin, as it is a product of first necessity for the Mexican citizens with diabetes. In contrast to other pharmaceutical products, insulin must be transported with optimal conditions which restrict its distribution time. Similarly, warehousing and production costs must be considered in the supply, storage and distribution decisions given its obsolescence or damage risks. To address this problem, we propose a decision model that integrates distribution within the supply and storage aspects of the insulin supply chain. For this case, we considered variables such as warehousing costs, transportation costs and times, and decisions regarding route and inventory planning. For the development of the integrated decision model, we extended on the capacitated vehicle routing problem (CVRP) model and the Economic Order Quantity (EOQ) model of logistics and supply chain management. When the integrated model was tested on a distribution instance of 100 pharmaceutical retailers, we obtained a more suitable distribution of insulin considering time restrictions and operational warehousing and transportation costs. Thus, the proposed model can be considered for improvement of distribution decisions for other products or retailers in the pharmaceutical industry.