Estimating Optimum Amount of Stock in The Warehousing Process Using Newsvendor Model
Abstract
PT Grow Commerce Indonesia is a technology
driven company which focuses on the digital branding of
partner brands, mostly local brands. They also help in the
warehouse and distribution activities of the partner brand’s
products. The warehouses that are used by Grow Commerce are
the partner brands. The problem faced by PT. Grow Commerce
Indonesia is that each year, their warehouse always has
overstock left, with increase of quantity each year. The author
intends to analyze the problem and design a solution using the
Newsvendor Model. The Newsvendor model helps in
determining the optimum quantity of products that should be
manufactured/ordered to avoid overstocking (supply is more
than demand) and or understocking (demand is more than
supply) which overall avoids the loss of profit. By analyzing the
forecast of demands, the Newsvendor model can calculate the
optimum number of stocks to minimize loss of profit.
Keywords— PT. Grow Commerce Indonesia, Overstock,
Newsvendor Model
References
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