The Experts below are selected from a list of 312 Experts worldwide ranked by ideXlab platform
Jose M. Framinan - One of the best experts on this subject based on the ideXlab platform.
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Inventory Record inaccuracy the impact of structural complexity and lead time variability
Omega-international Journal of Management Science, 2017Co-Authors: Salvatore Cannella, Roberto Dominguez, Jose M. FraminanAbstract:Abstract This article presents a rigorous prospective analysis of the impact of Inventory Record Inaccuracy (IRI) on complex multi-echelon Supply Chains (SCs). Specifically, key operational factors (i.e., the magnitude of the error, frequency of the Inventory audits and lead time variability) and SC structure are systematically assessed. We find that the detrimental effects of IRI are exacerbated by the structural complexity of the SC and lead time variability. Furthermore, we show how the efficacy of countermeasure strategies may vary depending on SC configuration and operational conditions. These results allow us to provide interesting managerial recommendations to guarantee investment in prevention and correction strategies.
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Inventory Record inaccuracy – The impact of structural complexity and lead time variability
Omega, 2017Co-Authors: Salvatore Cannella, Roberto Dominguez, Jose M. FraminanAbstract:Abstract This article presents a rigorous prospective analysis of the impact of Inventory Record Inaccuracy (IRI) on complex multi-echelon Supply Chains (SCs). Specifically, key operational factors (i.e., the magnitude of the error, frequency of the Inventory audits and lead time variability) and SC structure are systematically assessed. We find that the detrimental effects of IRI are exacerbated by the structural complexity of the SC and lead time variability. Furthermore, we show how the efficacy of countermeasure strategies may vary depending on SC configuration and operational conditions. These results allow us to provide interesting managerial recommendations to guarantee investment in prevention and correction strategies.
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The effect of Inventory Record inaccuracy in information exchange supply chains
European Journal of Operational Research, 2015Co-Authors: Salvatore Cannella, Jose M. Framinan, Manfredi Bruccoleri, Ana Paula Barbosa-póvoa, Susana RelvasAbstract: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.
Salvatore Cannella - One of the best experts on this subject based on the ideXlab platform.
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Inventory Record inaccuracy the impact of structural complexity and lead time variability
Omega-international Journal of Management Science, 2017Co-Authors: Salvatore Cannella, Roberto Dominguez, Jose M. FraminanAbstract:Abstract This article presents a rigorous prospective analysis of the impact of Inventory Record Inaccuracy (IRI) on complex multi-echelon Supply Chains (SCs). Specifically, key operational factors (i.e., the magnitude of the error, frequency of the Inventory audits and lead time variability) and SC structure are systematically assessed. We find that the detrimental effects of IRI are exacerbated by the structural complexity of the SC and lead time variability. Furthermore, we show how the efficacy of countermeasure strategies may vary depending on SC configuration and operational conditions. These results allow us to provide interesting managerial recommendations to guarantee investment in prevention and correction strategies.
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Inventory Record inaccuracy – The impact of structural complexity and lead time variability
Omega, 2017Co-Authors: Salvatore Cannella, Roberto Dominguez, Jose M. FraminanAbstract:Abstract This article presents a rigorous prospective analysis of the impact of Inventory Record Inaccuracy (IRI) on complex multi-echelon Supply Chains (SCs). Specifically, key operational factors (i.e., the magnitude of the error, frequency of the Inventory audits and lead time variability) and SC structure are systematically assessed. We find that the detrimental effects of IRI are exacerbated by the structural complexity of the SC and lead time variability. Furthermore, we show how the efficacy of countermeasure strategies may vary depending on SC configuration and operational conditions. These results allow us to provide interesting managerial recommendations to guarantee investment in prevention and correction strategies.
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The effect of Inventory Record inaccuracy in information exchange supply chains
European Journal of Operational Research, 2015Co-Authors: Salvatore Cannella, Jose M. Framinan, Manfredi Bruccoleri, Ana Paula Barbosa-póvoa, Susana RelvasAbstract: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.
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Inventory Record inaccuracy in supply chains: the role of workers’ behavior
International Journal of Physical Distribution & Logistics Management, 2014Co-Authors: Manfredi Bruccoleri, Salvatore Cannella, Giulia La PortaAbstract:Purpose – The purpose of this paper is to explore the effect of Inventory Record inaccuracy due to behavioral aspects of workers on the order and Inventory variance amplification. Design/methodology/approach – The authors adopt a continuous-time analytical approach to describe the effect of inbound throughput on the Inventory and order variance amplification due to the workload pressure and arousal of workers. The model is numerically solved through simulation and results are analyzed with statistical general linear model. Findings – Inventory management policies that usually dampen variance amplification are not effective when inaccuracy is generated due to workers’ behavioral aspects. Specifically, the psychological sensitivity and stability of workers to deal with a given range of operational conditions have a combined and multiplying effect over the amplification of order and Inventory variance generated by her/his errors. Research limitations/implications – The main limitation of the research is that...
Adam J. Mersereau - One of the best experts on this subject based on the ideXlab platform.
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Analytics for Operational Visibility in the Retail Store: The Cases of Censored Demand and Inventory Record Inaccuracy
Retail Supply Chain Management, 2015Co-Authors: Li Chen, Adam J. MersereauAbstract:Armed with a number of modern and emerging visibility technologies and facing increased competition from the internet channel, retail managers are seeking ever deeper visibility into store operations. We review two established streams of operations management research that try to overcome shortcomings of common retail data sources. The first is demand estimation and Inventory optimization in the presence of data censoring, where imperfect data may cause significant estimation biases and Inventory cost inefficiencies. The second is Inventory Record inaccuracy, where intelligent replenishment and inspection policies may be able to reduce Inventory management costs even without real-time tracking technologies like radio frequency identification (RFID). Common themes of these literatures are that lack of visibility can be costly if not properly accounted for, that intelligent analytical approaches can potentially substitute for visibility provided by technology, and that understanding the best possible policy without visibility is needed to properly evaluate visibility technologies. We include a survey of modern and emerging visibility technologies and a discussion of several new avenues for analytical research.
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Demand Estimation from Censored Observations with Inventory Record Inaccuracy
Manufacturing & Service Operations Management, 2015Co-Authors: Adam J. MersereauAbstract:A retailer cannot sell more than it has in stock; therefore, its sales observations are a censored representation of the underlying demand process. When a retailer forecasts demand based on past sales observations, it requires an estimation approach that accounts for this censoring. Several authors have analyzed Inventory management with demand learning in environments with censored observations, but the authors assume that Inventory levels are known and hence that stockouts are observed. However, firms often do not know how many units of Inventory are available to meet demand, a phenomenon known as Inventory Record inaccuracy. We investigate the impact of this unknown on demand estimation in an environment with censored observations. When the firm does not account for Inventory uncertainty when estimating demand, we discover and characterize a systematic downward bias in demand estimation under typical assumptions on the distribution of Inventory Record inaccuracies. We propose and test a heuristic prescription that relies on a single error statistic and that sharply reduces this bias.
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Information-Sensitive Replenishment when Inventory Records Are Inaccurate
Production and Operations Management, 2012Co-Authors: Adam J. MersereauAbstract:Inspired by recent empirical work on Inventory Record inaccuracy, we consider a periodic review Inventory system with imperfect Inventory Records and unobserved lost sales. Record inaccuracies are assumed to arrive via an error process that perturbs physical Inventory but is unobserved by the Inventory manager. The Inventory manager maintains a probability distribution around the physical Inventory level that he updates based on sales observations using Bayes Theorem. The focus of this study is on understanding, approximating, and evaluating optimal forward-looking replenishment in this environment. By analyzing one- and two-period versions of the problem, we demonstrate several mechanisms by which the error process and associated Record inaccuracy can impact optimal replenishment. Record inaccuracy generally brings an incentive for a myopic manager to increase stock to buffer the added uncertainty. On the other hand, a forward-looking manager will stock less than a myopic manager, in part to improve information content for future decisions. Using an approximate partially observed dynamic programming policy and associated bound, we numerically corroborate our analytical findings and measure the effectiveness of an intelligent myopic heuristic. We find that the myopic heuristic is likely sufficiently good in practical settings targeting high service levels.
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retail Inventory management when Records are inaccurate
Manufacturing & Service Operations Management, 2008Co-Authors: Nicole Dehoratius, Adam J. Mersereau, Linus SchrageAbstract:Inventory Record inaccuracy is a significant problem for retailers using automated Inventory management systems. In this paper, we consider an intelligent Inventory management tool that accounts for Record inaccuracy using a Bayesian belief of the physical Inventory level. We assume that excess demands are lost and unobserved, in which case sales data reveal information about physical Inventory levels. We show that a probability distribution on physical Inventory levels is a sufficient summary of past sales and replenishment observations, and that this probability distribution can be efficiently updated in a Bayesian fashion as observations are accumulated. We also demonstrate the use of this distribution as the basis for practical replenishment and Inventory audit policies and illustrate how the needed parameters can be estimated using data from a large national retailer. Our replenishment policies avoid the problem of “freezing,” in which a physical Inventory position persists at zero while the corresponding Record is positive. In addition, simulation studies show that our replenishment policies recoup much of the cost of Inventory Record inaccuracy, and that our audit policy significantly outperforms the popular “zero balance walk” audit policy.
Nicole Dehoratius - One of the best experts on this subject based on the ideXlab platform.
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the effectiveness of rfid in backroom and sales floor Inventory management
The International Journal of Logistics Management, 2016Co-Authors: Sandeep Goyal, John A. Aloysius, Bill C. Hardgrave, Nicole DehoratiusAbstract:Purpose Perceived as an antidote to poor execution, interest in radio frequency identification (RFID)-enabled visibility has grown. The purpose of this paper is to examine whether and how RFID-enabled visibility with item-level tagging improves store execution. Design/methodology/approach The authors conducted three field-based experiments in collaboration with two Fortune 500 retailers. Findings RFID-enabled visibility resulted in a sizable decrease in Inventory Record inaccuracy and out-of-stocks for Inventory held in both the backroom and on the sales floor. The decrease in Inventory Record inaccuracy and out-of-stocks was even greater among products stored primarily on the sales floor suggesting the benefits from increased visibility accrue to sales floor Inventory management processes. In contrast, the authors found no significant improvement in Inventory Record inaccuracy and no substantive improvement in out-of-stocks among products stored primarily in the backroom suggesting that increased visibility does not improve backroom management processes. Practical implications The authors recommend retailers focus on sales floor Inventory management when seeking to improve store execution through the adoption of RFID-enabled visibility. In the context, only partial evidence exists that backroom Inventory management improves with RFID-enabled visibility. Originality/value Retailers seeking to invest in RFID technology must estimate potential performance improvements before making firm-specific cost-benefit analyses. They must also understand where and how these performance improvements will accrue. This research uniquely presents the results of a three field experiments that quantify the changes in retail execution associated with RFID adoption.
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Inventory Record inaccuracy in retail supply chains
Wiley Encyclopedia of Operations Research and Management Science, 2012Co-Authors: Nicole DehoratiusAbstract:Inventory Record inaccuracy (IRI), defined as the discrepancy between the Recorded Inventory quantity and the actual Inventory quantity physically available on the shelf, is a substantial problem in retailing. This article summarizes the research documenting the problem of IRI within retail supply chains and reviews several potential solutions to IRI offered by operations management researchers. In addition, this article explores how execution problems within retail distribution centers contribute to store-level IRI. Through direct observations and interviews with retail employees, we identify numerous errors that occur within the retail distribution center and how such errors create a mismatch between actual and Recorded store Inventory. We argue that it is critical to detect, determine the root cause of, and correct such errors in an effort to prevent them from cascading from one stage of the distribution process to the next. We claim error prevention in distribution, similar to quality improvement in manufacturing, requires improving workforce practices, fool proofing operational processes, and appropriate incentive design. We conclude with our recommendations for further study on this topic. Keywords: Inventory Record inaccuracy; discrepancies; distribution center; audit frequency; product variety; Inventory density; retail execution; vendor-managed Inventory; process improvement; Inventory replenishment
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Wiley Encyclopedia of Operations Research and Management Science - Inventory Record Inaccuracy in Retail Supply Chains
Wiley Encyclopedia of Operations Research and Management Science, 2011Co-Authors: Nicole DehoratiusAbstract:Inventory Record inaccuracy (IRI), defined as the discrepancy between the Recorded Inventory quantity and the actual Inventory quantity physically available on the shelf, is a substantial problem in retailing. This article summarizes the research documenting the problem of IRI within retail supply chains and reviews several potential solutions to IRI offered by operations management researchers. In addition, this article explores how execution problems within retail distribution centers contribute to store-level IRI. Through direct observations and interviews with retail employees, we identify numerous errors that occur within the retail distribution center and how such errors create a mismatch between actual and Recorded store Inventory. We argue that it is critical to detect, determine the root cause of, and correct such errors in an effort to prevent them from cascading from one stage of the distribution process to the next. We claim error prevention in distribution, similar to quality improvement in manufacturing, requires improving workforce practices, fool proofing operational processes, and appropriate incentive design. We conclude with our recommendations for further study on this topic. Keywords: Inventory Record inaccuracy; discrepancies; distribution center; audit frequency; product variety; Inventory density; retail execution; vendor-managed Inventory; process improvement; Inventory replenishment
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The Role of Execution in Managing Product Availability
Retail Supply Chain Management, 2008Co-Authors: Nicole Dehoratius, Zeynep TonAbstract:This chapter explores two common problems faced by retailers, namely Inventory Record inaccuracy and misplaced products. These problems have substantial implications for retail performance. We find these two problems compromise the ability of a retailer to meet target service levels. Moreover, they cause a distortion in the sales and Inventory data used by retailers’ automatic decision support tools. We describe the drivers of these problems and highlight existing research in this domain. More importantly, we identify the need for additional empirical research – both field based and experimental – and note analytical approaches that could benefit from the incorporation of execution problems (e.g., demand forecasting, Inventory planning, and assortment choice). As retailers move to serve their customers from multiple channels and provide transparent Inventory information to end-consumers, the incentive to eliminate problems such as Inventory Record inaccuracy and misplace products grows. This chapter helps academics and practitioners alike understand these two problems and offers insight on a variety of approaches to mitigate their negative consequences.
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retail Inventory management when Records are inaccurate
Manufacturing & Service Operations Management, 2008Co-Authors: Nicole Dehoratius, Adam J. Mersereau, Linus SchrageAbstract:Inventory Record inaccuracy is a significant problem for retailers using automated Inventory management systems. In this paper, we consider an intelligent Inventory management tool that accounts for Record inaccuracy using a Bayesian belief of the physical Inventory level. We assume that excess demands are lost and unobserved, in which case sales data reveal information about physical Inventory levels. We show that a probability distribution on physical Inventory levels is a sufficient summary of past sales and replenishment observations, and that this probability distribution can be efficiently updated in a Bayesian fashion as observations are accumulated. We also demonstrate the use of this distribution as the basis for practical replenishment and Inventory audit policies and illustrate how the needed parameters can be estimated using data from a large national retailer. Our replenishment policies avoid the problem of “freezing,” in which a physical Inventory position persists at zero while the corresponding Record is positive. In addition, simulation studies show that our replenishment policies recoup much of the cost of Inventory Record inaccuracy, and that our audit policy significantly outperforms the popular “zero balance walk” audit policy.
Rogelio Oliva - One of the best experts on this subject based on the ideXlab platform.
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On-Shelf Availability, Retail Performance, and External Audits: A Field Experiment
2016Co-Authors: Howard Hao-chun Chuang, Rogelio Oliva, Sheng LiuAbstract:A potential answer to retailer’s shelf out-of-stocks (OOS), where the item is in store but customers cannot find it, is to employ third-party service providers to execute audits and corrections. However, given the nontrivial cost of executing external audits, it is still necessary to assess whether external audits are capable of reducing shelf-OOS, whether they can be performed in an economical way, and whether the benefits from the audits translate into higher sales. In an effort to address these questions, we partnered with a product manufacturer and a retail service provider and conducted a field experiment in a national retailer’s store set. We used transactional data to detect abnormal operations and respond to possible shelf-OOS by sending auditors to correct empty shelves and incorrect Inventory Records. At the conclusion of the experiment, we found that SKUs in the treatment group were less likely to have shelf-OOS and Inventory Record inaccuracies, and that our intervention had a positive effect on sales. Furthermore, we found that the external audit initiative is economically viable since these improvements required low auditing efforts after a transitional period, and in steady state the cost of running the program is a small fraction of the benefits it generates. We discuss the limitations of our study and the implications of our findings for researchers and practitioners.
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Erratum to ‘Inventory Record inaccuracy: Causes and labor effects’
Journal of Operations Management, 2016Co-Authors: Howard Hao-chun Chuang, Rogelio OlivaAbstract:Abstract Inventory Record inaccuracy (IRI) is a pervasive problem in retailing and causes non-trivial profit loss. In response to retailers’ interest in identifying antecedents and consequences of IRI, we present a study that comprises multiple modeling initiatives. We first develop a dynamic simulation model to compare and contrast impacts of different operational errors in a continuous (Q, R) Inventory system through a full-factorial experimental design. While backroom and shelf shrinkage are found to be predominant drivers of IRI, the other three errors related to Recording and shelving have negligible impacts on IRI. Next, we empirically assess the relationships between labor availability and IRI using longitudinal data from five stores in a global retail chain. After deriving a robust measure of IRI through Bayesian computation and estimating panel data models, we find strong evidence that full-time labor reduces IRI whereas part-time labor fails to alleviate it. Further, we articulate the reinforcing relationships between labor and IRI by formally assessing the gain of the feedback loop based on our empirical findings and analyzing immediate, intermediate, and long-term impacts of IRI on labor availability. The feedback modeling effort not only integrates findings from simulation and econometric analysis but also structurally explores the impacts of current practices. We conclude by discussing implications of our findings for practitioners and researchers.
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On-Shelf Availability, Retail Performance, and External Audits: A Field Experiment
Production and Operations Management, 2015Co-Authors: Howard Hao-chun Chuang, Rogelio OlivaAbstract:A potential answer to retailer's shelf out-of-stocks (OOS), where the item is in the store but customers cannot find it, is to employ third-party service providers to execute audits and corrections. However, given the nontrivial cost of executing external audits, it is still necessary to assess whether external audits are capable of reducing shelf-OOS, whether they can be performed in an economical way, and whether the benefits from the audits translate into higher sales. In an effort to address these questions, we partnered with a product manufacturer and a retail service provider and conducted a field experiment in a national retailer's store set. We used transactional data to detect abnormal operations and respond to possible shelf-OOS by sending auditors to correct empty shelves and incorrect Inventory Records. At the conclusion of the experiment, we found that Stock Keeping Units in the treatment group were less likely to have shelf-OOS and Inventory Record inaccuracies, and that our intervention had a positive effect on sales. Furthermore, we found that the external audit initiative is economically viable since these improvements required low auditing efforts after a transitional period, and in steady state the cost of running the program is a small fraction of the benefits it generates. We discuss the limitations of our study and the implications of our findings for researchers and practitioners.
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Inventory Record inaccuracy: Causes and labor effects
Journal of Operations Management, 2015Co-Authors: Howard Hao-chun Chuang, Rogelio OlivaAbstract:Inventory Record inaccuracy (IRI) is a pervasive problem in retailing and causes non-trivial profit loss. In response to retailers’ interest in identifying antecedents and consequences of IRI, we present a study that comprises multiple modeling initiatives. We first develop a dynamic simulation model to compare and contrast impacts of different operational errors in a continuous (Q, R) Inventory system through a full-factorial experimental design. While backroom and shelf shrinkage are found to be predominant drivers of IRI, the other three errors related to Recording and shelving have negligible impacts on IRI. Next, we empirically assess the relationships between labor availability and IRI using longitudinal data from five stores in a global retail chain. After deriving a robust measure of IRI through Bayesian computation and estimating panel data models, we find strong evidence that full-time labor reduces IRI whereas part-time labor fails to alleviate it. Further, we articulate the reinforcing relationships between labor and IRI by formally assessing the gain of the feedback loop based on our empirical findings and analyzing immediate, intermediate, and long-term impacts of IRI on labor availability. The feedback modeling effort not only integrates findings from simulation and econometric analysis but also structurally explores the impacts of current practices. We conclude by discussing implications of our findings for practitioners and researchers.
