# Balancing public health needs and economic sustainability: A dual-matrix model for community pharmacy inventory management

## TL;DR

The paper introduces a new inventory management model for community pharmacies to balance public health needs and economic sustainability.

## Contribution

A dual-matrix model is introduced to separately manage medical and non-medical inventory in community pharmacies.

## Key findings

- Non-medical products made up 76.4% of all items in the pharmacies.
- A Pareto pattern was observed, with 10% of items accounting for 70% of spend and profit.
- The model identified 149 medical and 580 non-medical items for strict inventory control.

## Abstract

Community pharmacies must balance public health obligations with economic sustainability. However, integrated methods that jointly manage medical and non-medical inventory in community pharmacies in LMICs are limited.

To develop and apply a dual-matrix model separating medical from non-medical products into operational control categories and introducing a High–Medium–Low profitability (HML-P) classification.

We conducted a retrospective, descriptive analysis of all items handled in six community pharmacies in the Republic of Srpska, Bosnia and Herzegovina, during the analyzed 2022 year (12-month period) (n = 10,541). Medical products were classified by Always Better Control (ABC) by purchase value and Fast-/Slow-/Non-moving (FSN) by dispensing frequency (predefined thresholds: >4/day = F, 1–4 = S, <1 = N) to form an ABC–FSN matrix. Non-medical products were classified by ABC and a new HML-P scheme (expert-defined Pareto cut-offs: 70%/20%/10% of cumulative gross profit) to form an ABC–HML-P matrix. Each matrix was consolidated into three control categories: I (strict), II (moderate) and III (minimal).

Non-medical products constituted 76.4% of all items. The ABC–FSN matrix identified Im = 149 medical products for strict control, while the non-medical ABC–HML-P matrix identified Inm = 580 items for strict control and a large segment for minimal oversight (IIInm = 6218). A pronounced Pareto pattern was observed (≈10% of items accounted for 70% of spend and 70% of gross profit), alongside low daily movement (only 3.2% dispensed ≥1/day).

The proposed dual-matrix model provides a practical decision-support tool for community pharmacies. It helps prioritize availability of patient-critical medical products while supporting economic sustainability.

•Introduction of a dual-matrix model for community pharmacy inventories.•Separation of medical (ABC–FSN) from non-medical (ABC–HML-P) products.•Mapping items to control Categories I–III for focused stock oversight.•Framework for balancing public-health priorities with economic sustainability in LMICs.

Introduction of a dual-matrix model for community pharmacy inventories.

Separation of medical (ABC–FSN) from non-medical (ABC–HML-P) products.

Mapping items to control Categories I–III for focused stock oversight.

Framework for balancing public-health priorities with economic sustainability in LMICs.