Inventory Routing Problem with Transshipment and Substitution for Blood Products Using the Case of the Belgian Blood Distribution

In this paper, we deal with a blood supply chain management problem. We focus in particular on blood distribution routes design and optimization. Blood is a scarce and perishable product, made of multiple components, each with specific compatibility rules. We would like to investigate the impact of compatible products substitution and transshipment between hospitals on blood demand satisfaction. We use the case of the blood supply chain in Belgium as an application. We model the case as an Inventory Routing Problem with transshipment and substitution for perishable products in a capacity constrained environment. We implement the model and conduct experimentations to evaluate the contribution of both transshipment and substitution with regards to shortages and distribution and inventory costs reduction. In a capacity constrained environment, at equivalent cost, mismatching/substitution is preferred to transshipment to satisfy the demand and avoid backorders.