Khulood Pharmacy Case Study

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Introduction
Inventory management involves the organizing and controlling of stock with the aim of sustaining the competitive needs of the company. Inventory is a reserve of materials utilized to meet customers’ demands or support the production process. By inventory and supply chains, it means that the input flow of materials should be enough to sustain the inventory level at any given time while sustaining the output flow of materials and the scrap flow. To understand how inventory management operates, Khulood pharmacy is a model company to use.
The organization
Kholuud Pharmacy is located at AlMarkhieh as the main branch in a group of 31 branches in a chain of pharmacies called International Medical Company (IMC) in Qatar. Located in a busy
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With this method, a company can keep records of inventory at specified and set intervals; it can be every Friday, or any other day of the week. To determine the amount of inventory needed (Q), one needs to subtract the amount of inventory on hand from the target inventory level (TI) (Wensing, 2011). The pharmacy’s demand is variable and has a fixed lead time hence the need to adopt this system. Order times are divided into quarters in which the inventory control systems generate reports to compare fast-moving products against the slow-moving …show more content…
However, the busiest interval is between 6pm to 10pm in any day, while Saturday is the busiest of all days of the week. To meet this demand, a group of dedicated pharmacists and administrators coordinate the flow of stocks from the suppliers and manage the available stock. Currently, the company replenishes stock using centralized and decentralized approaches.
Using the former method, operators in the back office generate reports on the available inventory from the IMS and send them to a specific supplier in specific days of the month through mail. After receiving them, the main warehouse collects all the orders from all the branches and sends them to the supplier. The supplier responds with different lot sizes at fixed times which eventually get to the pharmacy after a two-week lead time.

The second approach allows each pharmacy under IMC to order for bulky and high-demand products like pampers, directly from the supplier. The approach saves the firm time, transportation, and storage costs while ensuring their availability all the time. The process of determining levels of needed stock is automated through the barcode system; no need of physically counting it. Critical inventory order is set at 20% and a report is generated every three months to determine of any of the stock has reached that level. Regular SKU demand is set at 1.5 months while that of critical SKU is set at 3

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