Standardization of stock items

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Reference no: EM133499


Case Study: Pharmaceutical Products

One of the pillars of wellbeing state in Mauritius is free healthcare service for all Mauritians. To meet the objectives of free healthcare, the Ministry of Health & Quality of Life, has the accountability, among many others, to acquire, store and distribute pharmaceutical products for the advantages of in-patients as well as out-patients receiving treatment at the various hospitals and health centres.
Obtaining pharmaceutical inventions from the right source, in the right quantity, at the right time and at the least possible cost poses daunting challenges to staffs who are involved in procurement, storage and inventory management jobs. The major constraints usually faced in this regard may be summarized as follows:

• Working out the Ministry¡¦s annual requirements

• Limited funds but unlimited needs

• The wide range of items required, including life saving medicines

• Placing orders, receiving consignments and effecting relevant payments within a financial year

• Most of the supplies have to be procured from overseas sources all across the five continents

• Shelf life of products

• Limited storage space

Each one in the Ministry agrees that one means of addressing these challenges is to have a sound inventory policy in place.

(a) In your opinion, what type of inventory policy would be most appropriate with regard to pharmaceutical products for public segment healthcare institutions in Mauritius?

(b) Itemise and elucidate five main factors that are likely to influence the inventory policy.

(c) Propose and detail the two measures which you think would ensure a lean approach in the supply chain of pharmaceutical products in the hospitals and health centres.


Decide between dependent and independent demand, illustrating your answers with suitable instances, and indicate one inventory management technique, with explanation, for each class of demand.


The cost of acquiring stock and holding stock in a storehouse drains the organization's resources.

(a) Describe the meaning of these two costs.

(b) Under each of the two headings (i.e. cost of acquiring and cost of holding stock), list two constituents of cost and suggest a measure to control each of these elements of cost.


(a) Using detailed illustration, identify three measures that are likely to promote security or prevent thefts in warehouses.

(b) Health and safety subjects at workplaces are regulated under the Health and Safety Act (2005).
Record five health or safety measures which need to be put in place to protect workers involved in storage, association and allocation of supplies.


Make notes on:

(a) Standardization of stock items

(b) Internal customers in organizations

(c) Distribution resource planning (DRP)

(d) Electronic data interchange (EDI)

(e) Stocktaking

Reference no: EM133499


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