Joint Ordering Optimization for a Two-Echelon Pharmaceutical Supply Chain Considering Shelf Life and a Transshipment Mechanism

Pharmaceutical supply chains face high inventory and stockout risks because of short product shelf lives and volatile demand. To enhance coordination efficiency and reduce drug waste, this study examines a two-echelon supply chain comprising a manufacturer and multiple medical institutions. We built a joint ordering and transshipment optimization model that simultaneously incorporates shelf-life constraints, the first-in–first-out (FIFO) policy, inventory capacity limits, and peer-level transshipment. Under deterministic and stochastic demand, we solved the model using Bayesian optimization and Monte Carlo simulation. The results show that moderate inventory transshipment effectively mitigates risk from demand uncertainty and increases total supply-chain profit; under stochastic demand, the optimal strategy relies more heavily on coordinated transshipment to reduce excess inventory and near-expiry waste.

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Publication Details

Journal
Mathematics
Published
2026-01-14
DOI
https://doi.org/10.3390/math14020302
Primary Topic
Supply Chain and Inventory Management
Type
article
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article

Joint Ordering Optimization for a Two-Echelon Pharmaceutical Supply Chain Considering Shelf Life and a Transshipment Mechanism

Tingting Wang, Kaiye Gao, Ruizhi Ouyang, Hongjie Lan et al.
Mathematics
Supply Chain and Inventory Management
article

Joint Ordering Optimization for a Two-Echelon Pharmaceutical Supply Chain Considering Shelf Life and a Transshipment Mechanism

Tingting Wang, Kaiye Gao, Ruizhi Ouyang, Hongjie Lan, Shiju Li, Li Guo
article en

Abstract

Pharmaceutical supply chains face high inventory and stockout risks because of short product shelf lives and volatile demand. To enhance coordination efficiency and reduce drug waste, this study examines a two-echelon supply chain comprising a manufacturer and multiple medical institutions. We built a joint ordering and transshipment optimization model that simultaneously incorporates shelf-life constraints, the first-in–first-out (FIFO) policy, inventory capacity limits, and peer-level transshipment. Under deterministic and stochastic demand, we solved the model using Bayesian optimization and Monte Carlo simulation. The results show that moderate inventory transshipment effectively mitigates risk from demand uncertainty and increases total supply-chain profit; under stochastic demand, the optimal strategy relies more heavily on coordinated transshipment to reduce excess inventory and near-expiry waste.

MathematicsVol. 14(2)
Hong Kong Polytechnic University (HK), Chinese Academy of Sciences (CN), Beijing Jiaotong University (CN), Beijing Forestry University (CN), Academy of Mathematics and Systems Science (CN), Beijing Institute of Graphic Communication (CN), University of Science and Technology Beijing (CN)
Openalex Percentile: Top 90%
Supply Chain and Inventory Management
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Joint Ordering Optimization for a Two-Echelon Pharmaceutical Supply Chain Considering Shelf Life and a Transshipment Mechanism — Tingting Wang, Kaiye Gao, et al. · Mathematics (2026) | TGRS Research Map | TGRS