MARKOV CHAIN TO CONTROL GENERIC DRUG IN INVENTORY PROBLEM

Have the generic drugs inventory been optimal, neither excessive nor
deficient? Inadequate inventory can cause in losses due to increased ordering and storage costs. Shortage of generic drug will cause a decrease of public health services. Given demand generic drugs which always fluctuates, so stochastic process is the right method. In this study, the optimal level of generic drugs inventory will be analyzed by using the Markov chain. Steady state conditions were achieved when the same results obtained with the previous iteration result. There are 7 linear equations produced, each accompanied by 7 levels of inventory, optimal order quantities and also the costs.