×

Analysis of a newsvendor which has errors in inventory data records. (English) Zbl 1149.90307

Summary: Although supply chain scholars very often assume the availability of error free data pertaining to the flow of goods that come in and go out of an inventory system as well as the on hand inventory level, some recent investigations show that this may not be true even in facilities where advanced item identification and data capture technologies such as the barcode system are used. This paper proposes a single period model where the inventory data capture process using the barcode system is prone to errors that lead to inaccuracies. In the first part of our work, we derive analytically the optimal policy in presence of errors when both demand and errors are uniformly distributed. In the second part, we examine quantitatively the impact of record inaccuracies on the performance of an inventory system, in terms of additional overage and shortage costs incurred.

MSC:

90B05 Inventory, storage, reservoirs
90B50 Management decision making, including multiple objectives
PDFBibTeX XMLCite
Full Text: DOI

References:

[1] Alexander, K., Birkhofer, G., Gramling, K., Kleinberger, H., Leng, S., Moogimane, D., Woods, M., 2003. Focus on Retail: Applying Auto-Id to Improve Product Availability at the Retail Shelf., Technical report, Auto ID Center, MIT.; Alexander, K., Birkhofer, G., Gramling, K., Kleinberger, H., Leng, S., Moogimane, D., Woods, M., 2003. Focus on Retail: Applying Auto-Id to Improve Product Availability at the Retail Shelf., Technical report, Auto ID Center, MIT.
[2] DeHoratius, N., Mersereau, A.J., Schrage, L., 2005. Retail Inventory Management When Records Are Inaccurate., Technical report, The University of Chicago Graduate School of Business, Chicago.; DeHoratius, N., Mersereau, A.J., Schrage, L., 2005. Retail Inventory Management When Records Are Inaccurate., Technical report, The University of Chicago Graduate School of Business, Chicago.
[3] Fleisch, E.; Tellkamp, C., Inventory inaccuracy and supply chain performance: A simulation study of a retail supply chain, International Journal of Production Economics, 95, 3 (2005)
[4] Gaukler, G., Seifert, R.W., Hausman, W.H., 2003. Item Level RFID in the Retail Supply Chain. Technical report, Stanford University.; Gaukler, G., Seifert, R.W., Hausman, W.H., 2003. Item Level RFID in the Retail Supply Chain. Technical report, Stanford University.
[5] Gel, E.S., Erkip, N.K., Thulaseedas, A., 2006. Analysis of Simple Inventory Control Systems with Execution Errors: Economic Impact under Correction Opportunities. Technical report, Department of Industrial Engineering, Arizona State University.; Gel, E.S., Erkip, N.K., Thulaseedas, A., 2006. Analysis of Simple Inventory Control Systems with Execution Errors: Economic Impact under Correction Opportunities. Technical report, Department of Industrial Engineering, Arizona State University.
[6] Iglehart, D.; Morey, R. C., Inventory systems with imperfect asset information, Management Science, 18, 8 (1972) · Zbl 0234.90011
[7] Inderfurth, K., Analytical solution for a single-period production-inventory problem with uniformly distributed yield and demand, Central European Journal of Operations Research (2004) · Zbl 1136.90305
[8] Kang, Y.; Gershwin, S. B., Information inaccuracy in inventory systems - Stock loss and stockout, IIE Transactions, 37, 9 (2005)
[9] Kok, A.G. and Shang, K.H., 2004. Replenishment and Inspection Policies for Systems with Inventory Record Inaccuracy. Working paper, The Fuqua School of Business, Duke University.; Kok, A.G. and Shang, K.H., 2004. Replenishment and Inspection Policies for Systems with Inventory Record Inaccuracy. Working paper, The Fuqua School of Business, Duke University.
[10] Kumar, S.; Arora, S., Effects of inventory miscount and non inclusion of the lead time variability on inventory system performance, IIE Transactions, 24, 2 (1992)
[11] Marcel, B., Verify at source and train staff, Logistics Information Management, 8, 3 (1995)
[12] Morey, R. C., Estimating service level impacts from changes in cycle count, buffer stock or corrective action, Journal of Operations Management, 5, 4 (1985)
[13] Mosconi, R., Raman, A., Zotteri, G., 2004. The Impact of Data Quality and Zero-Balance Walks on Retail Inventory Management. Technical report, Harvard Business School.; Mosconi, R., Raman, A., Zotteri, G., 2004. The Impact of Data Quality and Zero-Balance Walks on Retail Inventory Management. Technical report, Harvard Business School.
[14] Noori, A. H.; Keller, G., One-period order quantity strategy with uncertain match between the amount received and quantity requisitioned, INFOR, 24, 1 (1986) · Zbl 0592.90026
[15] Raman, A., Retail data quality: Evidence, causes, costs and fixes, Technology in Society, 22 (2000)
[16] Rekik, Y.; Sahin, E.; Dallery, Y., A comprehensive analysis of the newsboy model with unreliable supply, OR Spectrum, 29 (2007) · Zbl 1170.90315
[17] Sahin, E., 2004. A qualitative and quantitative analysis of the impact of Auto ID technology on the performance of supply chains. Unpublished PhD Dissertation, Ecole Centrale Paris, France.; Sahin, E., 2004. A qualitative and quantitative analysis of the impact of Auto ID technology on the performance of supply chains. Unpublished PhD Dissertation, Ecole Centrale Paris, France.
[18] Sandoh, H.; Shimamoto, H., A theoretical study on optimal inventory taking frequency for retailing, Journal of Retailing and Consumer Services, 8 (2001)
[19] Shih, W., Optimal inventory policies when stockouts result from defective products, International Journal of Production Research, 18, 6 (1980)
This reference list is based on information provided by the publisher or from digital mathematics libraries. Its items are heuristically matched to zbMATH identifiers and may contain data conversion errors. In some cases that data have been complemented/enhanced by data from zbMATH Open. This attempts to reflect the references listed in the original paper as accurately as possible without claiming completeness or a perfect matching.