1

Chapter 18: Inventory Management in Blood Banks

Harshal Lowalekar and N. Ravichandran

Operations Management and Quantitative Techniques Area
Indian Institute of Management Indore

18.1 What is Blood?

Blood performs several important functions in the human body such as carrying oxygen and
nutrients to the various cells and tissues of the body, waste removal, fighting against diseases,
regulation of the body temperature, regulation of body acidity, etc. [1, 2].

Blood contains mainly three different kinds of cells: red blood cells (RBCs), white blood cells
(WBCs) and platelets; by volume, these cells constitute about 45% of the blood while the
remaining 55% is constituted by plasma [2]. RBCs are transfused to the patients suffering from
sickle cell anemia, gastrointestinal bleeding and kidney failure [3, 4]. WBCs are responsible for
fighting against diseases and foreign matter in the human body [2, 5]. WBC transfusions are not
common since they can lead to many complications such as transfer of infections along with
some transfusion related reactions in the body of the recipient [6]. Platelets facilitate the process
of clotting of blood and are therefore required in cases where a patient is suffering from bleeding
disorders [3]. Plasma is the fluid portion of blood that contains nutrients, salts, antibodies, waste
products and clotting proteins [1, 2, 5]. Plasma is given to trauma and burn victims and also to
the patients with clotting disorders [3, 4].

Human blood can be classified into eight blood groups: O+, O-, A+, A-, B+, B-, AB+ and AB-.
In earlier days, O- blood group was considered to be universal donor1 while AB+ was
considered to be universal acceptor. This concept is no more valid today; a patient of a given
blood group type can only be transfused with blood of the same type.

18.2 Blood Bank

A blood bank is a facility which collects, tests, processes and stores blood and its components for
future use [7, 8, 9, 10]. The primary responsibility of any blood bank is to plan blood collection
and respond to the demand of blood and its components from patients. The main objectives of
any blood bank are:

1
It was believed that O- blood could be transfused to a patient with any of the eight blood types while an AB+
patient could receive blood from any of the eight blood types.
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1. To ensure that blood products are available in sufficient quantities for the patients who
need blood transfusion.
2. To ensure that the wastage of blood products is minimized.

The major supply for blood for a typical blood bank comes from blood collections through blood
donation drives and camps; other sources of supply include donors who come to the bank and
donate blood. Many large blood banks collect their own blood through camps and blood bank
donations.

18.3 Blood Collection and Processing

Blood is collected and stored in plastic bags containing anticoagulant solutions. Blood collected
through donations and stored in plastic bags is commonly referred to as whole blood (WB). A
blood bank can also break the blood collected from the camps into components (see Fig 1). An
empty single bag is used for storing whole blood (WB) while an empty triple bag is used to
collect blood which needs to be separated into components (depending upon the number of
components required) [11]. A triple blood bag is a system consisting of a main blood collection
bag and multiple satellite bags connected to it for collecting the components [12]. In order to
separate various components, a triple/quadruple blood bag is centrifuged at high speed inside a
centrifuging machine [13]. Due to the centrifugation, the various components separate out in the
form of multiple layers inside the main bag depending on their densities (Fig 2) [13]. The lightest
of the components, plasma, separates out in the topmost layer followed by platelets in the middle
and RBCs, the heaviest, at the bottom [13]. These components can be drained from the main bag
into their respective satellite bags once the separation of layers is complete. Since white blood
cells (WBCs) can lead to many complications in the patient’s body [6], some advanced blood
bags come equipped with leukocyte reduction filters. These filters remove most of the WBCs
which would otherwise fractionate along with the RBCs. Single blood bags with a capacity of
250 ml and 300 ml and quadruple bags with a capacity of 400 ml and 450 ml are quite popular in
blood banking. The biggest advantage of separating whole blood into components is that only the
required components can be given to the patient who needs them.

Fig 1: Componentizing of Whole Blood

Plasma
Componentizing*
(Life =1 Year)

Whole Blood Platelets

(Life =30 Days) (Life =5 Days)

Source: [14]
Red Blood Cells

(Life =30 Days)

*WBCs are usually removed at the time of blood collection by using blood bags with special WBC filters
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18.4 Blood Testing and Storage

Once the blood unit is collected in blood bags it is tested for infectious diseases such as human
immunodeficiency virus (HIV), hepatitis C virus (HCV), hepatitis B surface antigen (HBsAg),
malaria, syphilis, etc., that can be transmitted through transfusion from the donor to the recipient
[15]. The blood group type of the donated blood units is also determined. The entire process of
typing and testing usually takes few hours.

The storage conditions play an important role in determining the effective duration for which
blood and its components can be used. Typically, the blood collected after donation cannot last
for more than eight hours in room conditions since it is highly prone to bacterial contamination
[16]. Due to this technological constraint, the process of component separation has to be
completed within a few hours after collection. Once the components have been separated they
have to be stored in different conditions as shown in Table 1.

Table 1: Storage Conditions for Blood Products2

Product Storage Condition Max. Duration of Storage
Red Blood Cells 1-6 0 C 35-49 days depending on
storage conditions3
Platelets 20-24 0 C 5 days
(in a constantly stirred condition)
Fresh Frozen -18 0 C to -25 0 C 1 Year
Plasma (FFP)
White Blood Cells No storage possible
Source: [16]
In India, the useful life of whole blood (WB) and RBC is considered to be 30 days which means
that whole blood (WB) and RBC units4 which have not been transfused within one month have
to be discarded5. Similarly, platelets need to be discarded after five days if they have not been
transfused. Since the life of platelets is very small compared to other components, blood banks
typically end up discarding a lot of platelets. Plasma can survive up to almost one year in frozen
state. White blood cells (WBCs) are usually not transfused. But in those cases where such
transfusion is required, WBCs have to be prepared immediately since they cannot be stored.

2
Blood products (or blood items) are same as blood and its components (WB, RBCs, platelets, plasma, WBCs and
cryoprecipitate)
3
Storage conditions refer to the anticoagulant-preservative used in the blood bags along with the sterility and
hygiene of the apparatus and the room in which the blood products are stored. In Indian blood banks it is very rare
to store blood safely for more than 30 days.
4
On unit is equivalent to one blood bag.
5
The terms discarding, outdating and wastage have been used interchangeably throughout the chapter.
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18.5 Inventory Management at a Blood Bank: A Case Study6

For the purpose of the case study we chose a not-for-profit blood bank operating in the southern
part of India. The blood bank operates within the premises of a charity hospital. It provides blood
products to the patients from the same hospital as well as other hospitals operating in the region.
The blood bank is equipped with the state-of–the-art facilities for preparing components.

18.5.1 Information Regarding Supply

The main source of collection for the blood bank is blood donation camps that are organized in
the various parts of the city. The number of donors who come to donate blood at the blood bank
instead of camps is relatively small. All donations at the blood bank are voluntary non-paid
donations. The break-up of the average annual blood collections at the blood bank is shown in
Table 2.

Table 2: Annual Blood Collection

Average annual collection from blood donation camps (units7) 12931
Average annual collection from blood bank donations (units) 575
Average annual collection (camps + blood bank donations) 13506
% collection from blood donation camps 95.74 %
Source: [14]

The blood bank organizes about 150 camps per year in different parts of the city. Its annual
blood collections amount to approximately 13000 units per year. A typical blood donation camp
lasts for 3-4 hours. Even though the blood bank tries to organize one blood donation camp every
two days, the actual time between two consecutive camps varies due to a variety of reasons. The
actual number of donors attending these camps is also stochastic and cannot be predicted in
advance (see Table 3). The distributions of the three supply variables at the blood bank8 are
shown in Fig 2.

6
The data organization at the blood bank under study was quite poor due to absence of computerization. The data
entry into various registers was performed manually at the blood bank. The data presented in the chapter,
therefore, is presented as was made available to us by the blood bank officials in the excel sheet
“Blood_Bank_Case_Study_DATA.xls”
7
One unit is equivalent to one blood bag. Blood is collected from donors in the bags of 300 ml and 450 ml
capacities. Maximum one unit of blood is collected from a donor depending upon the health of the donor. Blood is
not separated by gender of the donor. Blood collected from one donor is not mixed with the blood of other donors
even if they are of the same blood group type. The difference between the capacities of various blood bags (such
as 300 ml and 450 ml) has been ignored for the rest of the chapter.
8
All probability distributions are based on the past data at the blood bank. The data and the distributions will be
different for different blood banks.
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Table 3: Supply Variables

Average and Standard Distribution
S. No Random Variable
Deviation
Time between two successive Average = 2.359, Empirical9
1
camps(days) Std. Deviation = 2.22
Average = 83.57, Empirical
2 Donations at a camp (units)
Std. Deviation = 53.09
Daily donation at the blood Average = 1.574, Geometric
3
bank (units) Std. Deviation = 2.31 (0.3883)10

Table 4 shows the percentage composition of various positive blood groups in the blood obtained
through blood donation camps. The negative blood groups constitute only 6% of the total blood
collections and can be neglected for the purpose of analysis. The percentage of blood items
discarded due to various failed screening tests (HIV, HCV, HBV, VDRL, malaria, etc.) along
with the poor donations amount to roughly 2% of the total blood collections at the blood bank.

Table 4: Percentage Composition of Positive Blood Groups11

S. No Parameter Values
% composition of blood group “G” in the Groups A+ B+ O+ AB+
1
population % 21.19 29.24 37.09 6.44
Percentage of failed screening tests and
2 1.99%
poor donations

The present policy at the blood bank is to accept blood from all medically fit donors who come
to the blood donation camps (unrestricted collection policy). Typically the blood to be
fractionated into components is collected in empty triple bags of 450 ml each. The blood bank
componentizes 35% to 50% of the fresh blood. The remaining blood is collected in empty single
bags and stored as whole blood.

9
Empirical distribution is in the form of a histogram created from the past data. Empirical distributions are used to
describe random variables when commonly known distributions do not properly fit the historical data. All empirical
distributions described in the case study have been given in the excel file “Blood_Bank_Case_Study _DATA.xls” in
the form of probability distributions and histograms.
10
The number mentioned in the bracket represents the parameter of the geometric distribution. For more details
on geometric distribution please refer to the web-page: http://en.wikipedia.org/wiki/Geometric_distribution.
11
The percentage composition of the various blood groups in a given collection is assumed to be constant
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Fig 2: Distributions of Supply Variables

Source: [17]
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18.5.2 Information Regarding Demand

The averages, standard deviations and distributions of daily demand for blood and its
components for various blood groups have been shown in Table 5. It can be assumed that the
blood units are issued in the order in which they are collected (FIFO issuing), without any delay.
Whole blood and RBC (of the same blood group) can be assumed to be perfectly substitutable12.
Platelets of one blood group can be given to a patient of other blood group type. However, WB,
RBC and plasma of one blood group type cannot be given to a patient of other blood group type.
Since platelets usually do not carry any blood group charge, the consolidated demand for
platelets for all blood groups has been shown together. Also, since the percentage of negative
blood groups is extremely low they have been neglected. The distributions13 for the daily
demand of whole blood, RBC and fresh frozen plasma (FFP) for one blood group (O+) are
shown in Fig 3. The distribution of daily demand for platelets (all groups) is shown in Fig 4.

Table 5: Daily Demand Characteristics

Blood Group
O+ B+ A+ AB+
Average 7.84 4.52 4.28 1.67
Whole Blood Standard Deviation 5.28 2.92 3.56 2.00
(WB)
Distribution Empirical Empirical Empirical Geometric (0.375)
Average 3.75 3.01 2.44 0.65
Standard Deviation 3.36 2.65 3.02 0.95
RBC
Geometric Geometric
Distribution Empirical Geometric (0.606)
(0.249) (0.291)
Average 1.24 0.91 0.65 0.09
Fresh Frozen
Standard Deviation 1.73 1.64 1.24 0.63
Plasma (FFP)
Distribution Empirical Empirical Empirical Empirical
All Groups
Average 7.35
Platelets Standard Deviation 7.28
Distribution Empirical

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In cases where a unit of RBC is not available, WB of the same blood group can be usually given after minor
processing which removes the platelet and plasma from WB. In the cases where WB is not available, RBC can be
given (along with certain fluids if required) to the patient.
13
The probability distributions of the demand and supply variables are assumed to remain same for the entire
period of simulation.
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Fig 3: Distribution of Daily Demand for WB, RBC and FFP (O+)

Source: [17]
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Fig 4: Distribution of Daily Demand for Platelets (All Groups)

Source: [17]
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18.5.3 Revenue and Cost Structure

Blood and its components are sold at very reasonable prices to the patients who need
transfusion, by the blood bank. Whole blood (WB) and RBC are sold at Rs. 700 per bag
while platelets and plasma are sold at Rs. 600 per bag. Roughly 10 % of the blood at the
blood bank is given away free to the below poverty line patients. The holding costs are
assumed to be Rs. 25 per unit per year independent of the type of the component. The costs of
the blood bags are assumed to be Rs. 270 for a single bag (empty) and Rs. 500 for a triple bag
(empty). The cost of shortage and wastage for WB and components can be assumed as shown
in the Table 6.

Table 6: Cost of Shortage and Wastage for Blood and its Components

WB RBC Plasma Platelets

Shortage cost/unit (Rs.) 1000 1000 100 1000
Wastage cost/unit (Rs.) 1000 1000 100 1000

18.5.4 Decision Problems at the Blood Bank

The blood bank manager needs to identify optimal policies for blood collection and
componentizing. If it is assumed that the frequency of blood donation camps cannot be
changed14, then the operational decision problems for the blood bank can be summarized as:

1. How much blood should be collected during blood donation camps?

2. What fraction of the fresh blood should be componentized after each camp?

The number of blood units collected during a blood donation drive is a random variable. The
actual blood collection during a blood donation camp may differ from the planned collection.
It is important to keep the shortage of blood products under control since the unavailability of
blood units may lead to delay in surgeries and, in some cases, even death. Wastage of blood
products should be considered as equally serious a problem as shortage. The wastage of
blood products needs to be under control since wastage of one unit at a particular blood bank
may result in a shortage of one unit at some other blood bank.

Componentizing whole blood results in three products which have different demands and
lifetimes. The problem of determining the optimal fraction of whole blood to be
componentized is, therefore, quite complex. The blood from only about half of the donors is

14
The number of donation camps a blood bank can organize depends on the level of resources at the blood
bank and the permission from the various camping sites. It is usually difficult to change the camping frequency
in the short run. For the purpose of this problem one can assume that the duration between two successive
camps is a random variable which follows an empirical distribution with mean 2.359 days and standard
deviation 2.22 days as shown in Table 3.
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suitable for componentizing. Components cannot be prepared once blood has been collected
in a single blood bag because there is a risk of contamination while transferring the separated
components into other bags. Therefore, it has to be decided even before the camp itself what
ratio of single to triple blood bags should be carried to the camp site. Componentizing 100%
blood is neither technically feasible nor economically viable for the blood banks. The amount
of blood componentized directly affects the cost of blood bank operations. Componentizing
too little may lead to shortage while over componentizing may lead to high costs of
purchasing blood bags and holding the inventory of components. Over componentizing will
also result in excessive wastage. The optimal quantity of whole blood to be componentized is
a function of the costs of processing, shortage and wastage of blood and its components.

18.6 References

[1] Blood Basics: http://www.hematology.org/Patients/Blood-Basics/5222.aspx (accessed on

29 December 2012)

[2] Blood: http://en.wikipedia.org/wiki/Blood (accessed on 29 December 2012)

[3] Apheresis Donation: http://www.fivepointsoflife.com/teach-learn/what-are-the-five-

points/apheresis-donation/ (accessed on 29 December 2012)

[4] WHO: The Clinical Use of Blood, Handbook. Blood Transfusion Safety (2002)

[5] Red Gold: http://www.pbs.org/wnet/redgold/basics/ whatisblood.html (accessed on 29

December 2012)

[6] Cantt, L.: Life-Saving Decisions: A Model for Optimal Blood Inventory Management.
Thesis. Princeton University (2006)

[7] Glossary, Iron Corner. Society for the Advancement of Blood Management.
http://iron.sabm.org/glossary/index.php (2012) (accessed on 26 September 2012)

[8] Jennings, J.B.: Blood Bank Inventory Control. Management Science. Application Series.
19, 637-645 (1973)

[9] Elston, R. C. and Pickerel, J.C.: Blood Bank Inventories. Critical Reviews in Clinical
Laboratory Sciences.1 (3), 527-548 (1970)

[10] Blood Bank: http://en.wikipedia.org/wiki/Blood_bank (accessed on 29 December 2012)

[11] Regulatory Requirements of Blood and/or its Components Including Blood

Products. Central Drugs Standard Control Organization.
http://cdsco.nic.in/html/guideline.htm (2012). (accessed on 26 September 2012)

[12] Blood Facts: http://www.laneblood.org/blood-facts/ (accessed on 21 May 2013)

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[13] Blood components: http://ahdc.vet.cornell.edu/clinpath/modules/coags/comp.htm

(accessed on 22 May 2013)

[14] Lowalekar, H., Ravichandran, N.: A model for blood components processing.
Transfusion (Special Issue: Journal of Blood Services Management). 51 (7 Pt 2), 1624-34
(2011)

[15] Facts About Blood: http://www.thebloodbank.org/factsaboutblood.asp (accessed on 22

May 2013)

[16] Seeber, P., Shander, A.: Basics of Blood Management. First Edition, Blackwell
Publishing (2007)

[17] Lowalekar, H., Ravichandran, N.: Model for blood collections management.
Transfusion (Special Issue: Journal of Blood Services Management). 50 (12 Pt 2), 2778-84
(2010)