Inventory accuracy improvement via cycle counting in a two-echelon supply chain


Inventory record inaccuracy occurs when there is a difference between the actual and the recorded inventory. It causes excess inventory to be held in the system and thus adds to total supply chain costs. In this paper, we present a simulation for a two-echelon multiple item-type inventory system consisting of a distribution center and a retailer that both use cycle-counting as the corrective action. The model can be used to examine the costs of various cycle-counting configurations (scheduled cycle-counting, opportunity-counts) based on how often and how much to count. The results indicate that correct application of cycle-counting increases accuracy and provides significant savings for supply chains.

Document Type

Conference Proceeding


Cycle counting, Inventory record inaccuracy, Simulation, Supply chain

Publication Date


Journal Title

IIE Annual Conference and Expo 2007 - Industrial Engineering's Critical Role in a Flat World - Conference Proceedings