R.M.J. Heuts

Cyclical packaging planning at a pharmaceutical company

The total yearly costs of medicine usage in The Netherlands are increasing year after year. The Dutch government tries to get this increase under control by price regulations, which forces pharmaceutical manufacturers in The Netherlands to manufacture and distribute more efficiently. In this case study, we analyse for a particular pharmaceutical manufacturer in The Netherlands, whose name is confidential, the outsourcing of distribution in combination with a cyclical planning procedure of the packaging of medicines. Next, this cyclical packaging plan is linked with a new order procedure. The proposed cyclical packaging plan together with the new order procedure appeared to be very favourable compared to the present procedures.

Coordinated replenishment systems with discount opportunities

Abstract In many practical situations, coordination of replenishment orders for a family of items can lead to considerable cost savings. A well-known class of strategies for the case where cost savings are due to reduced joint ordering costs is the class of can-order strategies. However, these strategies, which are simple to implement in practice, do not take discount possibilities into account. We propose a method to incorporate discounts in the framework of can-order strategies. A continuous review multi-item inventory system is considered with independent compound Poisson demand processes for each of the individual items. Discounts are offered by the supplier as a percentage of the total dollar value whenever this value exceeds a given threshold. Starting from the can-order strategy as a basic decision rule, we develop a simple heuristic to evaluate these discount opportunities. The performance of the can-order strategy with discount evaluation is compared with that of another class of discount evaluat...