Par Levels, Fridge Space, and a 2% Discount
An outpatient oncology infusion center uses a refrigerated single-use vial at an average of 9 vials per working day. Average wholesaler lead time is 5 days, but twice this quarter it has been 7. Policy is to hold safety stock equal to two days of use. On-hand this morning: 60 vials - Lot A, 40 vials expiring in 21 days, and Lot B, 20 vials expiring in about 5 months. The wholesaler's order minimum is 25 vials and it offers 2% off at 300 vials or more. The only refrigerator has usable room for about 150 vials. The supervisor tells the technician to "just order 300 and take the discount."
1. Calculate the reorder point and decide whether to order today and how much.
Read the worked answer
Reorder point = worst-case lead-time demand + safety stock.
- Worst-case lead time 7 days × 9 vials/day = 63 vials
- Safety stock 2 days × 9 = 18 vials
- ROP = 63 + 18 = 81 vials
On hand is 60, which is 21 vials below the reorder point - order today. The margin is thin in practice: 60 vials ÷ 9 per day = 6.7 working days of cover, which is less than the 7-day worst case, so this is a same-day order, ideally expedited.
Quantity is capped by storage, not by the discount:
- Usable fridge space 150 − 60 on hand = 90 vials maximum
- Target position on arrival ≈ ROP 81, rounded to the 25-vial minimum → order 90 vials (10 working days of cover)
Ordering 300 would require 360 vials of refrigerator space, which does not exist, and would leave roughly 33 working days of a protocol-specific biologic on hand - a waste and excursion risk, not an efficiency.
2. What is your plan for Lot A (40 vials, 21 days to expiry), and what dating requirement would you put on the new order?
Read the worked answer
FEFO first, then a documented fallback.
- 40 vials ÷ 9 per day ≈ 4.4 working days of use, well inside the 21-day window - Lot A can and should be consumed completely if it is pulled first. Physically segregate it at the front of the shelf with a "use first" flag so Lot B is not opened ahead of it.
- Confirm against the actual case schedule: if next week's cases are cancelled, 4.4 days of use can evaporate and the lot becomes waste. Check the schedule before assuming consumption.
- If projected use will not exhaust Lot A before expiry, contact the wholesaler now - most return-for-credit programs require the request before expiry, in original sealed packaging, and within a stated window. Waiting until day 20 forfeits the credit.
- Set a receiving standard for the new order: reject or renegotiate anything with less than 6 months of dating unless remaining shelf life demonstrably exceeds projected use. Short-dated stock accepted "because it was available" is how the next Lot A happens.
Document both the FEFO instruction and the return request so the decision is auditable.
3. Evaluate the 2% discount offer on its merits.
Read the worked answer
Discounts are only savings if the inventory turns.
- Assume a $120 vial: 2% = $2.40/vial. At 300 vials that is $720 of nominal savings - on a $36,000 order.
- That order is 33 working days of supply, roughly 2.4× the usable refrigerator space, so it physically cannot be received without displacing something else or storing product outside validated conditions.
- The risk side is not small: refrigerated single-use vials carry excursion risk on every door-open, protocol volumes change, and 300 units of one NDC over six-plus weeks maximizes the chance that some fraction expires unused. Losing even 6 vials to expiry ($720) erases the entire discount.
- Conclusion: decline, or accept only with split deliveries (e.g., 90 vials per shipment) so each delivery fits storage and is consumed before the next. Get that agreement in writing on the PO.
Frame it for the supervisor as a storage and waste calculation, not a refusal to save money.