Use of dynamic regression model for reduction of shortages in drug supply

Abstract

The study is given to the use of dynamic regression model for reduction of shortages in drug supply: Purpose – the use of a dynamic regression model to identify the influence of lead-time on the reduction of time delays in drugs supply. To reach the goal, the author focuses on the improvement of drugs availability and the minimisation of time delays in drugs supply. Research methodology – the application of dynamic regression method to minimise shortage. The author suggests a dynamic regression model and accompanies it with autocorrelation and heteroskedasticity tests: Breush-Godfrey Serial Correlation LM Test for autocorrelation and ARCH test for heteroskedasticity. Findings – during analysis author identifies the relationship between lead-time and time delays in drugs supply. The author delivers a specific regression model to estimate the effect of deterministic lead-time on shortage. Probability F and Probability Chi-Square of this testing show that there is no significant autocorrelation and heteroskedasticity. Research limitations – the research is delivered for a one-month time frame. For the future, the study could review other periods. The author has incorporated the lead-time component in shortage reduction study by leaving capacity uncertainty component unresearched. The future studies could incorporate both elements into shortage reduction case analysis. Practical implications – presented framework could be useful for practitioners, which analyse drug shortage reduction cases. The revision of supply time table is recommended for pharmacies aiming to minimise the shortage level. Originality/Value – the analysis of deterministic lead-time and identification that the periodicity of shortage is evident each eight days. The study contributes to lead-time uncertainty studies where most of the authors analyse the stochastic lead-time impact on shortages.