Quantifying the costs of cycle counting in a two-echelon supply chain with multiple items

Seda Gumrukcu, Manuel D. Rossetti and Nebil Buyurgan

International Journal of Production Economics, 2008, vol. 116, issue 2, 263-274

Abstract: 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.

Keywords: Cycle; counting; Supply; chain; Simulation; Inventory; inaccuracy (search for similar items in EconPapers)
Date: 2008
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Citations: View citations in EconPapers (7)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:proeco:v:116:y:2008:i:2:p:263-274

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