Reference no: EM131400133

Due to the changing requirements for the products, the inventory management has become a vital component, particularly for the safety of the stock. The four eements for evaluating the (J.f?.Ck safety are: forecast requirement, level of service, start time and '!fie definite demand. The purpose of safety stock is to safeguard against this probability, but the problem is more than the high safety stock and the need can increase the operational costs. On the basis of these difficulties, the prediction needs to be exact so that the company can ascertain the amount needed to be bought, manufactured and shipped. For estimating the forecast, the dual exponential smoothing model is f applied. With. the use of exponential smoothing, calculation for both the average and the trend can be smoothed. • Not just prediction, lead time also is the main component for ,l ascertaining the safety stock and aspects which can bring down the stock out case. "Lead time is the time elapsed in between the receipt of customer order until the delivery of finished goods to the customer". Some of the issues of lead time are: demand, order of .quantity, product quality, reorder spot, safety stock, and other price issues such as discount, permit shortage or not, price rise and the value of time of money, and should be considered in deduction of lead time. On the basis of the stock out occurrences, there is an issue which affects the case. Forecasting and reorder point also affect the safety stock. When the safety stock reaches the right stage, the stock level is brought down. Nevertheless, forecasting influences the estimation of safety stock, as the level of safety stock is ascertained on the basis of forecasting estimations. Not only this, the reorder point can ascertain the level of safety stock.A stock out or pending orders is a state which the company experiences for not meeting the requirements of the customer within the required time period. Each month, PT.Combiphar acquired stock outs in very high levels and values. Research was done on CTS3 or Omtusi, since they have their quantity, rate and value is very high. Comtusi Syrup is a cough syrup which is produced by PT.Combiphar, Padalarang, Indonesia. It is prepared for hospital purposes and pharmacists, and comes in 60ml pack. The quantity of total stok out in 2012 was 1,390,698 units, and the total value was Rp 35,229,335. The total stock out quantity of CTS3 is at the rate of 9%; the quantity is equal to 128,036 units. The percentage of this product is 9.75% from the total value, which is Rp 3,424,963,000. Due to the above case of stock out, the capital and total profit came down. The above estimations show considerable difference in the profits because of stock out case. The company did not face any loss, but the profits came down. Because of stock out in 2012, the loss of Rp 1, 888,383,500 was seen by the company. According to the above evaluation, it is clear that the company had to face the dilapidated profits because of stock out condition.

Answer the following question.

1. Write a short note on Forecasting, ReOrder Point and Safety Stock Level at PT. Combiphar, Indonesia. (Hint: The four elements for evaluating the stock safety are: forecast requirement, level of service, start time and the definite demand, The purpose of safety stock is to safeguard against this probability, but the problem is more than the high safety stock and the need can increase the operational costs)

2. Which cough syrup does PT.Combiphar make? (Hint: comtusi)

This is original Case study which i have received. This case study belongs to Quantitative Methods.