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Tag: Analysis
Safety stock is crucial to prevent stockouts, acting as a buffer between forecasted quantities and demand levels. Calculating safety stock level for each item is vital, particularly for products with high demand variability. The formula for calculating safety stock and its linkage to the reorder point are key. Inaccurate forecasting and supplier challenges can impact…
The XYZ analysis refines the ABC framework by considering product demand variations at your pharmacy. It helps reduce the risk of overstocking, improve forecasting accuracy, and lower inventory costs. Category X products have low demand variability (<10%), category Y has moderate variability (10-30%), and category Z has the highest variability. Combining XYZ with ABC gives…
ABC analysis is a vital inventory management system for pharmacies to prioritize products based on their impact on revenue. Grade A products drive 80% of revenue but require tight control to avoid expiries. Grade B items are of moderate value and Grade C items contribute the least to revenue and are prone to expiries. Continuous…