A two-stage stochastic programming framework for blood product inventory management with ABO substitution and lateral transshipment

This work proposes a two-stage stochastic optimization model for managing the inventory of a two-echelon blood supply chain comprised of a blood center and a network of hospitals and transfusion points. The proposed model identifies optimal distribution quantities across the supply chain, considering demand stochasticity and product perishability. Furthermore, the model utilizes redistribution policies, such as lateral transshipment and product substitution based on ABO compatibility, as corrective actions to minimize outdates (i.e., expired product) and shortages across the network. Using a computational experiment that includes a network with one regional blood center and twenty hospitals, we show that inventory management policies that include both ABO substitution and transshipment can significantly decrease the expected total network costs. Similarly, we see corresponding reductions in the expected number of outdated units and emergency requests to external networks for additional supply to satisfy unmet demand.