Simple mathematics applied to inventory accuracy

Simple mathematics applied to inventory accuracy

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Article ID: iaor1990859
Country: United States
Volume: 28
Start Page Number: 64
End Page Number: 70
Publication Date: Oct 1987
Journal: Production and Inventory Management Journal
Authors:
Abstract:

Balance-on-hand errors in inventory systems remain an expensive problem for the materials manager. This article establishes a framework within which various strategies for maintaining inventory accuracy can be evaluated. A probabilistic model of accuracy decay is developed and various counting strategies-the annual physical inventory, random cycle counting, and longest-interval cycle counting-are examined against it. Activity-directed counting is proposed as a near-optimal strategy for maintaining inventory accuracy.

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