Indicative FSP

Optimization of inventory management of APIVITA SA

Apivita Company is activated in the sector of cosmetics and pharmaceutical products, possessing one of the first places in its sector and is aspiring in still bigger growth. The materialization of company’s plans but also market particularities, make necessary the release of capitals through an effective inventory management system. In the present study, first we made an ABC analysis in order to see if sales of the Company are following Pareto’s law, and then we examine theoretically, almost all of the models of inventory management proposed by the bibliography, and finally we concluded to the deployment of a (Q,r) model with which we calculated the optimal reorder quantity and optimal reorder point for every product respectively.
We applied a stock out approach of a (Q,r) model on 25 products chosen from ABC analysis, these products represent the 5,76% of all of the Company’s products and almost the 43% of total sales in value. We determined reorder frequency equal to11 per year and a desirable service level (fill rate) of 95 %, the model lead us to the conclusions that there must be a reduction on the replenishment lead times and also that fluctuations on the forecasts of demand must be limited. These actually are the two axes on which the Company should move forward in order to have more effective inventory management. Potential proposals, we came up to, are the contracting of strategic alliances with the minimal possible number of suppliers and sub-producers, and the improvement of the methods for the reduction of fluctuations on the demand forecasts but also the examination of future adoption of an inventory management system that will use Internet technologies.

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