Optimal ordering policies for multi-pharmaceutical with constraints on space

Medical supply chain is an extremely complicated process. On basis of the perishable inventory theory, the paper mainly focuses on the optimal ordering policy of multi-pharmaceutical for the large public hospitals. The paper develops a mathematical model with constraints on space where the shortage are allowed and has a lead-time, in order to maximum the total profit of the inventory system. Then, an algorithm was given based on the exterior point penalty function method. Finally, the model is illustrated with numerical examples. Based on our analysis, we prove that the problem is a convex programming and give optimal ordering policies in order to reduce the inventory cost of the hospital. It can play a good role for the effective medicine management in the hospital.