Publication Date


Document Type


Committee Members

Frank Ciarallo (Advisor), Pratik Parikh (Committee Member), George Polak (Committee Member)

Degree Name

Master of Science in Industrial and Human Factors Engineering (MSIHE)


Effectively choosing the location of inventory in a pharmaceutical supply chain is central to the mission of pharmaceutical distributors. These supply chains are a critical backbone to the healthcare delivery process: the distributors must deliver products to pharmacies, hospitals and retailers at low cost and with a high level of reliability. This thesis provides a method for analyzing demand data to gain insight on the value of centralizing the inventory into either a hub-and-spoke or national network for a pharmaceutical distribution company. Demand data is analyzed using an off-the-shelf analysis tool as well as a new tool developed in SQL Server, finding expected daily demand, inventory targets for a specific customer service level, and expected inventory. Annual transportation costs for centralized locations are calculated using an overnight delivery cost rating tool in SQL Server and net savings are calculated for each product in each network. The results from this analysis are used in an Excel tool to select the optimal group of products for centralization to maximize savings while keeping transportation costs at or below a given budget. The results show that using a hub-and-spoke network can save over $10 million.

Page Count


Department or Program

Department of Biomedical, Industrial & Human Factors Engineering

Year Degree Awarded