Abstract
The purpose of this study was to investigate empirically the potential cost savings to a pharmaceutical wholesaler using the Economic Order Quantity (EOQ) model. This model allows for calculating the order quantity that minimizes both ordering and holding costs. A regional pharmaceutical wholesaler was selected for a case analysis study using the EOQ model. Eleven brand name products were randomly selected for the analysis. The average yearly cost savings using EOQ was $31.92 per product. The potential yearly cost savings based on 8500 brand name stock-keeping units was $271,320. Using EOQ can therefore assist pharmaceutical wholesalers in minimizing holding and ordering costs and improve efficiency for pharmaceutical distribution channels.
| Original language | English (US) |
|---|---|
| Pages (from-to) | 1146-1153 |
| Number of pages | 8 |
| Journal | Clinical Therapeutics |
| Volume | 15 |
| Issue number | 6 |
| State | Published - 1993 |