IS482 Enigma Project Overview
Sponsor Background
Kosmebox is Vietnam’s top beauty e-tailer and is expanding its influence across Southeast Asia. Driven by its customer-centric mission statement and its commitment towards efficient customer-service, Kosmebox aims to make cosmetic products easily accessible to Southeast Asian consumers. Despite its late entry to the market in 2015, its customer-base has reached 10,000 and is still growing rapidly. Through Kosmebox’s online portal, its customers are exposed to products offering from over 100 cosmetic brands. Most of which are imported directly from Korea, US and Vietnam.
Like many other start-ups, despite its initial success, Kosmebox’s current business model is no longer capable of fulfilling the needs of its expanding market. It starts to face issues in managing its ongoing business processes, especially in areas like inventory management and warehouse selection. As a result, Kosmebox is in need of an analytics solution that is capable of streamlining its inventory management business process and optimizing resource allocation in cases like, warehouse selection.
Project Motivation
Currently there is no systematic way for Kosmebox to decide on the replenishment quantity for different products. Current forecast on product type and quantities need to be ordered is mainly based on human interpretation of current sales and inventory level. In that case, forecasting results are inaccurate and unreliable due to the unforeseen external factors resulting in sales quantity fluctuations in different months. On top of which, factors leading to peak season sales are not taken into consideration when structuring the forecasting model. Furthermore, as Kosmebox’s decision on replenishment quantity is scheduled to be 20th of each month, forecasted sales quantity may potentially deviate from this month’s actual sales quantity.
Furthermore, as the Kosmebox’s sales growth and business expanded, it plans to set up one more warehouse to improve operational efficiency. This may be potentially achieved by saving delivery cost and processing time when deliveries are made from warehouses in the region. As a result, Kosmebox is looking out for an optimal warehouse location to balance the workload with operating warehouses. In order to facilitate our sponsor’s decision-making process, we would need to analyse the new revenue and cost (including labor and warehouse rental costs) if he decides to put a new warehouse into operation in the region. If the new warehouse location is deemed feasible, we would need to highlight the amount of stock that Kosmebox should keep inside the new warehouse to operate for the 1 to 2 months period.
Project Objectives
1. To analyse past 2-year sales data to provide an inventory management and replenishment forecasting model 2. According to past 2-year sales data and Vietnam's geographical information to help sponsor to make a decision on whether it is worthwhile to set up a new warehouse
