Classification of hospital pharmaceutical drug inventory items by combining ABC analysis and fuzzy classification

The management of pharmaceutical inventory items in a hospital poses a unique problem. One of the most commonly used techniques in inventory management, the ABC analysis, lends simple and intuitive interpretation. However, it is based on a single quantifiable criterion, generally the annual dollar usage of the item; whereas the determination of importance of a pharmaceutical drugs item should also take into account other considerations, such as how severely its unavailability would affect patients. These other factors are often judged on the human experience, thus are hard to quantify. This paper proposes the use of the fuzzy-ABC technique, which is able to incorporate multiple factors, both quantitative and qualitative ones, into inventory management decisions in a computationally simple and easily interpretable manner. Differences observed in the results of classical ABC and fuzzy-ABC analysis clearly demonstrates that the fuzzy-ABC technique is able to better capture the intuition behind the importance of each pharmaceutical item as determined by multiple criteria beyond its dollar usage, including factors that are inexpressible as exact quantities.