Quantifying the costs of cycle counting in a two-echelon supply chain with multiple items
Inventory record errors within a supply chain can lead to problems that cause low customer satisfaction and high operational costs. This paper presents a simulation model of a two-echelon inventory system consisting of a retailer, a distribution center, and a supplier that includes multiple item types and the use of cycle counting as the corrective action. An extensive set of cycle-counting configurations were examined while observing the trade-off between fill rates, accuracy, and system costs in order to investigate the best possible configuration of cycle counting for two set of experiments that examine high-demand-low-cost and low-demand-high-cost items. The results indicate that the correct application of cycle counting will increase record accuracy and provide significant amount of savings for the entire supply chain. © 2008 Elsevier B.V. All rights reserved.
Cycle counting, Inventory inaccuracy, Simulation, Supply chain
Gumrukcu, Seda, Manuel D. Rossetti, and Nebil Buyurgan. "Quantifying the costs of cycle counting in a two-echelon supply chain with multiple items." International Journal of Production Economics 116, no. 2 (2008): 263-274.
International Journal of Production Economics