Optimizing Inventory at a Wholesale Distribution Centre

Pars Optima LLP is a wholesale distributor based in South Bangalore, India, that supplies fast moving consumer good products to nearly 2000 retail outlets daily. Their product line includes biscuits, breads, cakes, and beverages.

The company faced the issue of the lack of accuracy in forecasting the daily flow of products in and out of the distribution center and lost sales due to understocking. Therefore, we established two outcomes – product volume analysis for 4 individual SKUs and inventory management policies for 4 brands: Cake, Good day, Mariegold and Treat.

To deal with the company’s lack of accuracy, we first forecasted the product volume of 4 specific SKUs. We achieved that by using multiple linear regression and time series analysis. We then went on to model the probability distribution of the data for each brand and calculated the optimal safety stock levels accordingly.