Defination : Inventories constitute an important component of a firms working capital .The various features of inventory are inventory as current asssets ,level of liquidity and liquidity lags . Purpose : The purpose of holding inventoryis to achieve efficiency through cost reduction, increased sales volume ,to avail quantity discounts ,reduce risk of production stoppages ,reducing ordering costs and time . Inventory Management techniques : 2 types : 1. Economic order quantity : it is the order quantity that minimisesthe total cost associated with inventory management . 2. 2. ABC system : A – items of high value but small in number B – items of moderate value and size require reasonable attention C - items of smaller value

1. INVENTORY MANAGEMENT FOR REMOTE HEALTHCARE
Defination : Inventories constitute an important component of a firms working capital .The
various features of inventory are inventory as current asssets ,level of liquidity and liquidity lags .
Purpose : The purpose of holding inventoryis to achieve efficiency through cost reduction,
increased sales volume ,to avail quantity discounts ,reduce risk of production stoppages ,reducing
ordering costs and time .
Inventory Management techniques : 2 types :
1. Economic order quantity : it is the order quantity that minimisesthe total cost associated
with inventory management .
2. 2. ABC system : A – items of high value but small in number
B – items of moderate value and size require reasonable attention
C - items of smaller value
Pricing of inventories : FIFO , LIFO and Weighted average.
Inventories represent the largest single investment in assets form many manufacturers, wholesalers
and retailers. Thus one goal in operations is to keep the level of inventory in the supply chain as to

2. low as possible thus freeing up funds for other purposes. Unreasonably high inventory levels lower
the company`s profit and return of assets.
The inventory includes a vast spectrum of materials that is being transferred, stored, consumed,
produced, packaged, or sold in one way or another during a firm`s normal curse of business. The
planning, storing, moving and accounting for inventory is the basis for all logistics • Inventory has
a financial value, which for accounting purposes is considered a floating asset. In the supply chain
one of the key variables which has to be managed is inventory.
Reasons for Inventories
Improve customer service -Provides immediacy in product availability •Encourage production,
purchase, and transportation economies -Allows for long production runs -Takes advantage of
price-quantity discounts -Allows for transport economies from larger shipment sizes •Act as a
hedge against price changes -Allows purchasing to take place under most favorable price terms
•Protect against uncertainties in demand and lead times -Provides a measure of safety to keep
operations running when demand levels and lead times cannot be known for sure •Act as a hedge
against contingencies -Buffers against such events as strikes, fires, and disruptions in supply
Reasons Against Inventories
They consume capital resources that might be put to better use elsewhere in the firm •They too
often mask quality problems that would more immediately be solved without their presence •They
divert management’s attention away from careful planning and control of the supply and
distribution channels by promoting an insular attitude about channel management . The main goal
– keep the inventories on optimal level, without stockouts and excesses. For this, two controversial
but simultaneously mutually dependent tasks should be solved:To have enough inventories to
fulfill orders of outer and inner clients in a manner satisfying them. Or with other words – assure

3. high level of customer service. Usually this customer service level is measured as availability (fill
rate). To minimize inventory carrying costs, first of all capital tied into inventories for maximizing
the company`s profitability.Trade-off should be found for achieving these two goals
simultaneously. The Trade-off between inventory carrying costs and customer service .
Inventory Management Objectives
Good inventory management is a careful balancing act between stock availability and the cost of
holding inventory. Customer Service , i.e., Stock Availability Inventory Holding costs •Service
objectives -Setting stocking levels so that there is only a specified probability of running out of
stock •Cost objectives -Balancing conflicting costs to find them Effective inventory management
Effective inventory management is the result of outstanding inventory control and inventory
management.
Inventory control involves managing the inventory that is already in the warehouse, stockroom or
store. That is knowing, what products are "out there", have much you have each item and where it
is.Two tools commonly employed to ensure inventory accuracy and control are ABC analysis and
cycle counting • Inventory management involves determining, how to order products and how
much to order as well as identifying the most effective source of supply for each item in each
stocking location. Inventory management includes all activities of planning, forecasting and
replenishment.
The main purpose of inventory management is minimization differences between customers
demand and availability of items. These differences have caused by three factors: customers
demand fluctuations, suppliers delivery time fluctuations and inventory control accuracy Inventory
transactions • Normal stock receipt – from previously issued purchase orders and transfers •
Unexpected stock receipts – the stuff that just shows up on receiving stock • Requisitions – a
request for material to be consumed within company • Emergency requisitions • Sales – Orders to

4. be delivered – Orders to be picked up – Cash sales – Direct shipments – Orders for non-stock
products • Transfers to other warehouses or facilities • Assembly orders • Bin to bin transfers
within warehouse • Returns of stock material • Returns of non stock material • Returns of damaged
material • Returns to supplier • Adjustments of on-hand quantities – who is allowed to approve
adjustments
Types of inventories
Cycle stock – inventories for satisfying usual (predicted) demand between replenishments
(receiving new ordered quantities) • In-transit inventories / pipeline stock – items that are en route
from one location to another. They may be considered part of cycle stock even they are not
available for sale or shipment until after they arrive at the destination.
Safety or buffer stock – held in excess of cycle stock because of uncertainty in demand or lead
time. Amount depends on extent of demand fluctuation, replenishment lead time and planned
availability level for customers. Makes the majority of inventory in the typical logistic system •
Speculative stock – held some reasons other than satisfying current demand (getting quantity
discounts, forecasted purchase price increase or materials shortage, protecting against
strikes/natural disasters etc.
Seasonal stock – form of speculative stock that involves accumulation of inventory before a
seasonal period begins (or ends – in agriculture) .
Dead stock - items for which no demand has been registered for some specified period of time
(obsolete products, demand season ended, etc.
The inventory control is made by a stock-keeping unit. SKU is an individual product that differs
from other product some way.Although daily operations of inventories may require SKU level
control, strategic planning of inventory levels can be accomplished by substantially aggregating
product into broad groups by some characteristic – product groups. Three possible responses to
stock-out • Backordering – the quantity requested by the customer is placed on a separate order
called a backorder and the special order is filled as soon as the product is available from internal or
external source.
In some cases the backorder is shipped directly from its original source to the customer •
Substitution – occur when a product acceptable for the customer is substituted for the product that
is not available. • Lost sales – occurs when unsatisfied client annuls the order .Majority of
inventory replenishment methods are the variations of following three theoretical basic models:
•Periodic review system or fixed interval system • Reorder point system • Time based order point
system . Time phased order point system • TPOP is computerized management tool that plans

5. inventory needs in priority sequenced, time phased manner to meet customers and forecast demand
as it occurs.
Main advantage – inventory actions are triggered by matching supply with anticipated demand as
it occurs in time. In addition, each time when TPOP is generated, the system will resequence
demand and supply relationships and suggest a new set of required order actions for the order
planner requirements planning Principle – if it is known what final product should be produced, it
is also known how much materials, and components are needed for manufacturing this product.
The types of materials that need to be manufactured internally and in what quantity, taking into
account current inventory levels • Material cost (landed cost). the purchase price of product plus
freight and any other charges that are related to specific shipment. Or manufacturing cost in
production. • Ordering cost. Cost of issuing, receiving and paying on a vendor. These are costs
associated with quantity ordered, not with ordering frequency. Back order cost – when customer
decides to wait in out of stock situation.
Total Product Costs formula (TPC) Total Stocking Cost formula is a part of Total Product Cost
Formula, which summarizes total replenishment cost and purchase cost in time period . Ordering
cost is calculated per order or order line, dividing annual ordering cost by orders or order lines
issued annually . Term "Inventory carrying cost" may be used in two different contexts. •
Determining firm´s total logistics cost (TLC) •
The accounting of warehousing costs depend on storage solutions used – private & rented
warehouse or using public warehouses. Warehousing costs should be separated into two distinct
categories: throughput related and storage related. 1. Throughput costs are the costs which do not
directly depend on inventory levels. For private & rented warehouses these are primarily fixed and
take the form of step function (if the space rented or number of operated warehouses changes)
Such costs are: labour, communal costs (heating, electricity etc.), depreciation or rent of building
and equipment.
Storage costs – part of warehousing costs depending on inventory level • Inventory risk costs –
obsolescence, damage, pilferage, and relocation • Inventory capital costs and inventory service cost
– no difference from total cost approach • Inventory risk costs (obsolescence, damage, pilferage,
and relocation) – should be included in EOQ calculation only when these are direct result of
inventory levels and are significant enough to change the result of EOQ equation.
Standard deviation shows the spread of distribution of numbers .
It is calculated by the following steps. 1)Determine the mean (average) of a set of numbers.
2)Determine the difference of each number of the mean. 3)Square each difference. 4)Calculate the
average of the squares. 5)Calculate the square root of the average. With higher inventory turnover ,
company is using it`s assets more effectively and the inventory carrying cost per unit held in
inventory is lower. Low turnover indicates the existence of excess, slow moving or obsolete
inventories in stock.
Inventory is Responsible for Supply Chain Operations Accountable for arrangements for timely
dispatches,also monitoring of shipments till delivery Responsible for monthly stock taking,
Reconciliation of stocks & Inventory Mgt ,Timely reimbursement from Principal Co .

6. Health care Remote patient monitoring (HRPM) is a technology to enable monitoring patients
outside conventional clinical settings (e.g. in the home), which may increase access to care and
decrease healthcare delivery costs. In this domain, problems such as shortage of ICU's in
Hospitals, better healthcare for our aging population and preventive diagnostics are targeted.
Doctors will then monitor these chronic patients to ensure that they stick to their treatment protocol
and be available for any medical advice or queries the patient may have at any time of the day or
night. This service will also provide better care to elderly patients supported by the use of
connected devices for vital measurement, sugar monitoring etc.
Benefits to Patients
• Telemedicine consulting centres (TCC) can be setup at any rural and urban places which
provides reach to best of the doctors.
• Consultants can examine patients from remote locations without travelling to those
locations.
• The number of patients getting specialist care increases.
• Effective care for pre-surgery and post-surgery follow-ups.
• Access to quality health care and specialist care for the family.
• Avoids unnecessary travel - Saves Travel, Time and Money.
Doctor / Consultant
• Increase in consultant's visibility, popularity and practice
• Instant facility to obtain second opinion, cross consultations
• Ability to provide health care services in informal setup like while travelling in car, at
home etc.
• Ability to monitor their patient remotely.
Benefits to Hospitals

7. • Build trust and relation: Patients will have more trust in hospital as a brand when we are
• providing care in their neighborhood.
• Brand: Brand reach increases significantly in the respective geographies.
• Optimize: Optimize the investments made for setting up Telemedicine hubs.
This Patient Engagement technology solution is to provide Continuum of Care, especially for
patients who suffer from chronic conditions wherein multiple visits to the doctor and follow up
investigations are required. This post-prescription communication solution for patient adherence
and recovery will help establish continuum of care, even when the patient leaves the healthcare
facility. In simple terms this solution digitizes and helps capture the prescription information of all
OP/IP patients and makes the information available on a dashboard so our call centre team do
subsequent follow up calls on reviews, diagnostics/procedures to be done, book appointments for
the patient, send them medication reminders via SMS thereby helping the patient stay on top of his
health.
Telemedicine is a term encompassing all methods used to examine, investigate, monitor and treat,
with the patient and doctor, physically located in different places, transferring the expertise.

8. Unnecessary travelling of patients and escorts is eliminated. Image acquisition, storage, display,
processing, and transfer, form the basis of telemedicine.
• Telemedicine is the remote delivery of healthcare services via information and communications
technology (ICT) to diagnose, treat, and prevent disease and injury. • It allows rural health
practitioners to consult with city-based specialist doctors to provide diagnoses and treatment plans
for rural patients, so patients don’t have to travel.
Telemedicine is rarely a stand-alone business model. Especially in low-income settings, it tends to
be a turnkey solution that is plugged into existing business models, such as chain clinics or
hospitals, leveraging existing providers and structures and extending services to new areas.
Telemedicine is used by a healthcare professional as part of their interaction with a patient at a
clinic or hospital. One form of telemedicine that uses wireless devices and cell phone technologies
is mHealth, or mobile health. mHealth is usually used on consumer-facing devices.
Components of the Model
Telemedicine includes teleconsultations, videoconferencing, and remote patient monitoring (see
Figure 1). Patients usually access telemedicine at a local hospital, clinic, pharmacy, or kiosk,
wherelocal healthcare workers consult with doctors or specialists on diagnosis and treatment
options.
Telemedicine facilitates access to expert healthcare for both patients and local healthcare workers
in several ways:
• It provides healthcare workers at local hospitals, clinics, or pharmacies access to expert help

9. from more experienced physicians or specialists.
• It offers reassurance to both local healthcare workers and patients.
• It reduces the travel time expense and stress associated with seeking specialist care.
It also encourages local healthcare workers to remain in rural areas, by augmenting professional
support and allowing them to continue their professional development.
Telemedicine transmits information via text, audio, video, and still images to a range of specialists.
Photographs of simple skin tumors can be transmitted to large hospitals for interpretation and
consultation; X-rays can be sent off for a specialist opinion. Where a stable Internet connection
exists, patients can videoconference with a healthcare professional or email information for
analysis. Doctors can monitor blood pressure or glucose levels of a clinic’s patients by looking at a
computer screen.
Cost Factors
Operating a telemedicine system involves purchasing the equipment needed to set up the system in
the hospital, clinic, or pharmacy; maintaining the equipment; training the physicians and local
healthcare workers on the technology; and compensating the physicians. Public and private actors
usually share these costs.
Revenue Streams
Most telemedicine programs and services are subsidized by governments or international donors.
A few social enterprises are trying to operate financially self-sustaining telemedicine services.
Partnerships
Successful telemedicine projects align the interests and resources of various stakeholders to create
a solution that is tailored to the local market. These partners include private companies;
governments and development partners; local clinics and pharmacies; and remotely located
hospitals, doctors, and specialists.
• Private companies develop and implement telemedicine solutions.
• Service providers set up telemedicine systems for hospitals, providing monitors, Internet
connections, technology suited to the environment, and training on how to use it.
Telemedicine is therefore more of a B2B (business-to-business) than a B2C (business-toconsumer)
operation.
• Governments and development partners provide funding, usually in the form of joint ventures
by international donors and nonprofit organizations. Governments are also key to expanding
rural access to broadband Internet connections, organizing national agencies for the
development and promotion of telemedicine, and crafting policies that ensure an efficient
and safe telemedicine experience for patients and healthcare providers.
This helps bridge the gap in healthcare professionals’ experience between old technologies and
new,and has the added advantage of being a reliable alternative if Internet connections are slow or
lost.The older technology also serves as a backup if the newer technology fails.
Affordability
Telemedicine creates value for a healthcare system by providing more access to specialists at a
minimum price (once the system is set up), providing modern ways of working with patients and
collecting data. It also allows healthcare providers to continue their education on a regular basis
using distance learning—perhaps with bigger hospitals in the region or even international partners.
As a business model, service providers often set up a telemedicine system for a hospital. They can
work with the hospital to remain within a certain budget and leverage existing technologies being
used to ensure affordability. The main client (and payer) for these services are usually a
government or a hospital. Services are provided in the form of a full telemedicine setup, which

10. usually includes monitors, internet connections, technology suited to the environment, and some
sort of training on how to use it. The end user (the patient) will rarely pay for the telemedicine
services. They will most likely pay the price for a usual consultation regardless of whether it
includes telemedicine or not.
Therefore, telemedicine is much more of a B2B model than a B2C model.
Improving Outcomes
Telemedicine provides people in poor communities with access to specialized care not available in
their own communities, in many cases obviating the need for them to travel. It facilitates cross-site
and intercountry collaboration, providing healthcare professionals with access to otherwise
unavailable specialist advice.
Telemedicine is also a good way to train local healthcare workers remotely (House and others
1987).
Cost-Effectiveness
Telemedicine is more of a cost-saving mechanism than a money-making mechanism for a health
business model. Telemedicine helps save costs by offering many more services to a hospital or
clinic’s patients without in-house specialists or the need for transfers to other facilities that can be
time consuming and costly. It is also a way for hospitals and clinics to modernize their services,
and to provide their staff with ongoing learning from hospitals in the region, country, or even
internationally.
This further education via videoconference is critical, especially for rural practitioners to keep
abreast of the latest in medicinal practice.
Research showed that only 25 out of 100 patients needed to physically see a specialist after a
telemedicine consultation. The other 75 people were saved a referral to a specialist.
Prepared by
Mohammad Yaser Hussain
9819549045