Production and Operations Management
Most developed countries hold significant quantities of medical supplies in reserve for emergency response. Due to high handling costs and remote storage locations, such stocks are typically not used for day-to-day operations. In consequence, the expiry of reserve supplies (without use) is a significant problem. One possible remedy for such wastage is to donate large batches of dated supplies to developing nations, which often do without adequate medical supplies in their health systems. Here, we focus on personal protective equipment (PPE) and similar products, which have low risks associated with aging and safety. However, the international community is cautious about donating dated medical supplies, with the World Health Organization explicitly recommending against it. Issues of safety, while important, are not the primary concern as recent studies have shown expiration dates to be conservative. Instead, most concerns relate to macrolevel effects on the recipient country. Taking safety as given, we carefully model the incentives in the medical supplies donation supply chain, providing insights into the likely effects of corruption and impacts on the local industry. Overall, we find that the impact of donation is not monotone in the quality of donated products. In particular, dated donations whose quality is slightly lower than the quality of products in the local market are likely to be more beneficial than fresh donations; thus, we suggest that the international community reconsiders its stand on banning donations from dated reserves. We provide concrete guidelines for such donations and suggest a possible path for implementation of a donation program.