Research And Application Of The EOQ Model In Pharmaceutical Companies

As market competition intensifies, the demand for the product is constantly undergoing change.In order to get an effective inventory control, more and more companies will divert attention to the EOQ. After a century of development, the EOQ theory has gradually tend to improve and make a systematic theoretical framework. Areas of research of scholars also gradually expand the scope of the study of EOQ and the research has become more widespread. At the same time, the scope of application of the EOQ model is gradually increased, the express delivery industry, household appliances industry, the retail industry and pharmaceutical distribution industry,which has a applicability. Inventory control, especially in the economic quantities who plays an increasingly important role in the company’s operations. With the rapid economic development, more and more attention for the ability to get the goods at their own request, in order to win more customers, more orders, each company efforts to improve inventory management, which also contributed to the inventory control and the rapid development of the theory. Similarly, the EOQ appears more and more important, which can effectively combine the corporate practice, to solve the company’s inventory control problem and which has become a top priority of the study.This paper will study the application and research of EOQ model in the pharmaceutical company’s ordering strategy,and which is based on K pharmaceutical company as the research object.First of all,on the basis of discussing the classical EOQ model,the model is improved.The traditional EOQ assumes that demand is constant, inventory demand rate is balanced.However,these assumptions are difficult to exist in the actual life,so the traditional model will be improved.In the new model,demand and purchasing price are time-varying and the return rate is considered.Secondly,we will study the inventory control of K pharmaceutical company,finding that the company’s ordering strategy remains forecasting based on experience.This ordering strategy apply to the steady demand drugs,but it is difficult to grasp for the new product.we we will focus on in-depth study of this problem.According to the actual situation of the K pharmaceutical company,we will construct a improved EOQ model,with the consideration of demand and price varying all the time and return caused by the damaged outer packing.Finally,we get the K company’s concrete data,use the improved EOQ model to simulate,and analyze the results(including sensitivity analysis).This paper provides a certain reference for other pharmaceutical distribution companies’inventory control in the case of the introduction of new drugs.