Inventory control of the special sale and known price increased model

Abstract

In the recent globalization era, the competition among the companies for the same area of business is more intense, such as the competition in the Pharmacy industries for the pharmacy distributors (called the PBF). The PBF X is one of the pharmacy distributors located in the Semarang city, in the middle of Java Island, Indonesia. Due to of this highly competition, the PBF X would like to increase their inventory performance by minimizing the inventory total cost. In the present situation, the determination of T (the order period) and the order size are performed by intuition. In the situation where the price of medicine changes, the PBF X does not have any method how to determine the order size and T. This situation may create the condition of stock out or overstock and may also increase the expected total cost and automatically reduce the inventory performance. The research focuses on the fast moving medicines that often experience the stock out condition. The Calculation used the joint P-(R;T) model when there is no change in the price of medicine where the model determines both the order interval (T) and the maximum inventory. In the case of price medicine change, the calculation uses either the special sale model or the known price increased model and the results are the number of special order and the total benefit. This total benefit can affect the PBF X in making decision whether to perform special order or not.