The effect of Inventory Record Inaccuracy in Information Exchange Supply Chains

Salvatore Cannella, Jose M. Framinan, Manfredi Bruccoleri, Ana Paula Barbosa-Póvoa and Susana Relvas

European Journal of Operational Research, 2015, vol. 243, issue 1, 120-129

Abstract: The goal of this paper is to quantify the impact of Inventory Record Inaccuracy on the dynamics of collaborative supply chains, both in terms of operational performance (i.e. order and inventory stability), and customer service level. To do so, we model an Information Exchange Supply Chain under shrinkage errors in the inventory item recording activity of their nodes, present the mathematical formulation of such supply chain model, and conduct a numerical simulation assuming different levels of errors. Results clearly show that Inventory Record Inaccuracy strongly compromises supply chain stability, particularly when moving upwards in the supply chain. Important managerial insights can be extracted from this analysis, such as the role of ‘benefit-sharing’ strategies in order to guarantee the advantage of investments in connectivity technologies.

Keywords: Supply chain management; Information sharing; Collaboration; Bullwhip effect; System dynamics (search for similar items in EconPapers)
Date: 2015
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Citations: View citations in EconPapers (18)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:ejores:v:243:y:2015:i:1:p:120-129

DOI: 10.1016/j.ejor.2014.11.021

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