The research analysis on the projection of the warehouse occupancy in a pharmaceutical company
Date of Issue2008
School of Mechanical and Aerospace Engineering
Singapore-MIT Alliance Programme
Currently the warehouse occupancy in NPC is around 85%. As the new product C launches next year, the occupancy will increase as well. In order to forecast the utilization of the warehouse capacity before hand and to effectively manage the inventory of the new product, we present two methods to analyze the safety stock level of Product C. We use the continuous review policy to estimate the safety stock level, the expected inventory level and reorder level for each type of raw materials. We applied the aggregate safety stock model to estimate the base stock level for finished goods. Through the application of these two methods, the warehouse capacity can be saved around 30% for Product C safety inventory. But we also found out that the current warehouse capacity will still not be sustainable enough when Product C is fully in production. Solutions to avoid warehouse over utilization need to be taken before Product C is fully launched.