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The effect of Inventory Record Inaccuracy in Information Exchange Supply Chains

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

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.

Suggested Citation

  • Cannella, Salvatore & Framinan, Jose M. & Bruccoleri, Manfredi & Barbosa-Póvoa, Ana Paula & Relvas, Susana, 2015. "The effect of Inventory Record Inaccuracy in Information Exchange Supply Chains," European Journal of Operational Research, Elsevier, vol. 243(1), pages 120-129.
  • Handle: RePEc:eee:ejores:v:243:y:2015:i:1:p:120-129
    DOI: 10.1016/j.ejor.2014.11.021
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    Cited by:

    1. Spiegler, Virginia L.M. & Naim, Mohamed M. & Towill, Denis R. & Wikner, Joakim, 2016. "A technique to develop simplified and linearised models of complex dynamic supply chain systems," European Journal of Operational Research, Elsevier, vol. 251(3), pages 888-903.
    2. repec:gam:jsusta:v:10:y:2018:i:3:p:641-:d:133963 is not listed on IDEAS
    3. Mendes, Paulo & Leal, José Eugênio & Thomé, Antônio Márcio Tavares, 2016. "A maturity model for demand-driven supply chains in the consumer product goods industry," International Journal of Production Economics, Elsevier, vol. 179(C), pages 153-165.
    4. Ali, Mohammad M. & Babai, Mohamed Zied & Boylan, John E. & Syntetos, A.A., 2017. "Supply chain forecasting when information is not shared," European Journal of Operational Research, Elsevier, vol. 260(3), pages 984-994.
    5. Reyes, Pedro M. & Li, Suhong & Visich, John K., 2016. "Determinants of RFID adoption stage and perceived benefits," European Journal of Operational Research, Elsevier, vol. 254(3), pages 801-812.
    6. Dai, Hongyan & Li, Jianbin & Yan, Nina & Zhou, Weihua, 2016. "Bullwhip effect and supply chain costs with low- and high-quality information on inventory shrinkage," European Journal of Operational Research, Elsevier, vol. 250(2), pages 457-469.
    7. repec:eee:proeco:v:196:y:2018:i:c:p:12-23 is not listed on IDEAS
    8. repec:gam:jsusta:v:10:y:2018:i:5:p:1547-:d:146045 is not listed on IDEAS
    9. repec:eee:transe:v:110:y:2018:i:c:p:122-136 is not listed on IDEAS
    10. repec:eee:transe:v:109:y:2018:i:c:p:205-224 is not listed on IDEAS
    11. Cannella, Salvatore & Dominguez, Roberto & Framinan, Jose M., 2017. "Inventory record inaccuracy – The impact of structural complexity and lead time variability," Omega, Elsevier, vol. 68(C), pages 123-138.

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