Determining optimal cycle count frequency

Determining optimal cycle count frequency

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Article ID: iaor199033
Country: United States
Volume: 27
Start Page Number: 66
End Page Number: 74
Publication Date: Mar 1986
Journal: Production and Inventory Management Journal
Authors:
Abstract:

The primary impact of an inventory record error is that the system may fail to reorder when it should, resulting in unplanned stockouts. Optimum elapsed time between counts depends upon item cost, counting cost, item criticality, usage rate, and error rate. An EOQ-like formula for determining optimal frequency of cycle counting insures, at a prestated level of protection, that remaining errors do not cause low availability.

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