Pharmaforte is a leading healthcare and pharmaceuticals distributor in Singapore. Due to the characteristics of the business, high inventories are held to shield against volatility, and the erratic demand patterns makes trends and product life cycles hard to track. In direct response to these two problems, we establish two deliverables – demand analysis and inventory management policies for each product line.
We were given time-indexed sales and inventory data of four product lines. After cleaning and pre-processing to obtain the data, we fit the bimonthly demand (demand during product lead time) into normal distributions.
Using these parameters, we apply the (Q,r) model for inventory management. A (Q,r) model is applicable for inventory control under uncertain demand and continuous review and helps generate performance metrics, including – Fill Rate, Total Cost per product and etc. Based on these metrics, we evaluate our model alongside Pharmaforte’s existing policy to estimate cost savings.
Aaron Reul Khoo
Ku Wee Tiong
Seah Ee Song
Seow Xu Lian
Tong Hui Kang