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: | Neeley Parley S. |
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.