Financial Effects and Constraints Health care organizations throughout the world are facing many financial challenges. Management has to find ways to streamline processes, reduce waste, and bring profit to the organization. Pharmacies in the health care system tend to be one of the major departments that bring in a very large amount of revenue for an organization. Therefore, it is extremely important for management to focus on processes that will result in the smooth operation of the pharmacy department. Management must be cognizant of the revenue constraints and financial factors that the pharmacy department faces and be able to make good business decisions that benefit the organization. Additionally, to forecast accurately the future of a hospital’s pharmacy, management must have the required knowledgebase to review and interpret the appropriate financial reports. Pharmacy Effects on Operations Management Health care managers must continually monitor the processes and operations of the pharmacy in their organization. Pharmacies are one of the major profit producers of a health care organization, therefore ensuring that required workflow processes are efficiently and effectively in place are critical. Pharmacists and pharmacies play a major role in the delivery of quality health care as they distribute safe medications to the patient population. To prevent disruptions in services and to make a positive impact on the hospitals bottom line, pharmacy management must focus on inventory control, staffing, and automation. Inventory Control Pharmacies keep

adequate stock levels of medications to meet the demands of the local hospital. Most pharmacies use the economic order quantity (EOQ) methodology to establish a benchmark for inventory levels (Beier, 1995, p. 160). To maximize profitability of hospital pharmacies, efficient inventory