Modelling logistics cost in hospital : a case of medical products

Abstract

Healthcare providers presently operate in a situation of multifaceted supply chains. Due to lack of attention, real costs has increased and made implementing a costing system difficult. The fundamental issues for healthcare management today should have been taken into consideration. Based on this matter, the study focuses on logistics activity and cost analysis of such activities from warehouse to ward of the case study hospital. The aim of this study was primarily directed to analyse activity resource, determine resource, estimate time performance in each activity and then calculate the cost rate of services through implementation of Activity Based Costing (ABC) and Time Driven Activity Based Costing (TDABC) methods. The corresponding basic mathematical formulas and design of the information flow system are also elaborated. After applying the designed methodology, it was found that the ABC model and TDABC model could calculate the unit cost of resource and provide accurate cost. The result of this study shows that the top concern of effectiveness in reducing logistics cost are to improve the quality and efficiency of the medical products transport which they provide to patients.