Disaggregation and consolidation of imperfect quality shipments in an extended EPQ model

We consider a standard economic production quantity (EPQ) model. Due to manufacturing variability, a fraction P of the produced inventory will have imperfect quality, where P is a random variable with a known distribution. We consider a 100% inspection policy and further assume that the inspection rate is larger than that of production. Thus, all imperfect quality items will be detected by the end of the production cycle. For such an augmented EPQ model, we first derive the new optimal production quantity assuming that the imperfect quality items are salvaged once at the end of every production cycle. Then, we extend this base model to allow for disaggregating the shipments of imperfect quality items during a single production run. Finally, we consider aggregating (or consolidating) the shipments of imperfect items over multiple production runs. Under both scenarios we derive closed-form expressions for both the economic production quantity and the batching policy, and show that our desegregation/consolidation schemes can lead to significant cost savings over the base model.     

A societal cost-of-illness study of hemodialysis in Lebanon

Aim: Renal failure is a growing public health problem, and is mainly treated by hemodialysis. This study aims to estimate the societal costs of hemodialysis in Lebanon.

Methods: This was a quantitative, cross-sectional cost-of-illness study conducted alongside the Nutrition Education for Management of Osteodystrophy trial. Costs were assessed with a prevalence-based, bottom-up approach, for the period of June–December 2011. The data of 114 patients recruited from six hospital-based units were collected through a questionnaire measuring healthcare costs, costs to patients and family, and costs in other sectors. Recall data were used for the base-case analysis. Sensitivity analyses employing various sources of resources use and costs were performed. Costs were uprated to 2015US$. Multiple linear regression was conducted to explore the predictors of societal costs.

Results: The mean 6-month societal costs were estimated at $9,258.39. The larger part was attributable to healthcare costs (91.7%), while costs to patient and family and costs in other sectors poorly contributed to the total costs (4.2% and 4.1%, respectively). In general, results were robust to sensitivity analyses. Using the maximum value for hospitalization resulted in the biggest difference (+15.5% of the base-case result). Female gender, being widowed/divorced, having hypertension comorbidity, and higher weekly time on dialysis were significantly associated with greater societal costs.

Limitations: Information regarding resource consumption and cost were not readily available. Rather, they were obtained from a variety of sources, with each having its own strengths and limitations.

Conclusion: Hemodialysis represents a high societal burden in Lebanon. Using extrapolation, its total annual cost for the Lebanese society is estimated at $61,105,374 and the mean total annual cost ($18,516.7) is 43.70% higher than the gross domestic product per capita forecast for 2015. Measures to reduce the economic burden of hemodialysis should be taken, by promoting chronic kidney disease’s prevention and encouraging transplantation.