Chapter 12, Problem 1ED

Ethical Dilemma

Wayne Hills Hospital in tiny Wayne, Nebraska, faces a problem common to large, urban hospitals as well as to small, remote ones like itself. That problem is deciding how much of each type of whole blood to keep in stock. Because blood is expensive and has a limited shelf life (up to 5 weeks under 1–6°C refrigeration). Wayne Hills naturally wants to keep its stock as low as possible. Unfortunately, past disasters such as a major tornado and a train wreck demonstrated that lives would be lost when not enough blood was available to handle massive needs. The hospital administrator wants to set an 85% service level based on demand over the past decade. Discuss the implications of this decision. What is the hospital’s responsibility with regard to stocking lifesaving medicines with short shelf lives? How would you set the inventory level for a commodity such as blood?

Summary Introduction

Introduction: WH hospital at city N faces issues from its largest hospital in urbans to its smallest hospitals in rural ones like itself. The problems is that how much of blood to keep in stock. Blood is expensive and it has only limited shelf life and so the WH wants to keep its inventory as low as possible but the recent disaster cost many lives where there came a massive need for blood.

The administrator want to set 85% service level based on the demand in over past few decades.

To determine: The implications of the hospital’s decision and the hospital’s responsibility in stocking the blood with short shelf lives and setting of inventory level for commodity like blood.

Explanation of Solution

Implications of the hospital’s decision and the hospital’s responsibility in stocking the blood with short shelf lives and setting of inventory level for commodity like blood:

The hosptial’s decision of maintaining 85% service level to meet inventory demand is the decision made by the manger which cannot be questioned since keeping higher stock without use would lead to more wastages. Though maintaining less inventory is favorable and cost saving, the hospital management must be ready to meet sudden rise in demand and any big disasters.

The hospitals can tie up with another hospitals or blood bank to meet higher demand. This way will serve both purpose of meeting the demand and as well as cost savings but putting price tag on blood is highly questionable. Setting inventory for short shelf life product is left to the management who must decide the inventory level but since blood is a life saving commodity, the management must  be prepared at any time to meet higher requirement without the costing any lifes.