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Stockup Stockout Case
Stockup Stockout Case
Stockup Stockout Case
mobile clinic
Case Facts:
The scenario depicts the inventory management dilemma at The Star Clinic, a mobile medical
clinic. The clinic's resident doctor wishes that regularly prescribed medicines, particularly
Panadol, a brand of paracetamol (a pain reliever), be adequately supplied. Yet, the
procurement manager prefers to keep pharmaceutical holding costs to a minimum. To
achieve a very high level of patient service, the doctor demands that paracetamol be easily
available and dispensable at all times in the clinic. Patients should not have to wait three days
for the next shipment of supplies. On the contrary, the procurement manager takes a financial
approach and concentrates on the company's profit and loss statement.
Problems:
Problem Statement:
“How should the Organisation manage its Inventory while satisfying the customers and
incurring less cost?”
Criteria:
Alternative:
Recommendation:
The continuous review method is suitable for the case circumstance because inventory
management requires the daily demand of the products, which varies depending on the type.
Data on total cost, holding cost, and ordering cost are easily available and require less time.
Calculation:
Sigma = 442.7