Effects and Causes of Discrepancies in Supply Operations

Abstract

A matter that has received scant attention in the literature of operations research is the role of discrepancies between physical stocks and stocks of record in a supply operation. Discrepancies not only exert a deleterious effect on the performance of the supply function, but may have a serious effect on the realization of benefits to be derived from implementation of theoretically optimal methods of inventory control and procurement or production scheduling. The present paper reports on a case study of discrepancies and their causes in a supply facility of an agency of the Federal Government. Contrary to the general expectation that the massive and complex paper work system connected with processing of issues and receipts was the principal source of discrepancies, it was possible to determine that about 80 per cent of the discrepancies were caused by the discrepancy-correcting procedures themselves. As a result two principal targets for further study are clearly delineated, (1) the inventorying process and (2) the stock balance adjustment procedures. Even on the basis of preliminary study some ameliorating recommendations were possible.

Determination of Optimum Quantity Cost and Cycle Time Using Inventory Model with Stock Level Dependent Demand Rate and Variable Holding Cost. (A Case Study of Mantrac Ghana Limited).

“…Research on Inventory Record Inaccuracy (IRI) has been taking place since 1960s with the report by (Rinehart, 1960). The author stated that this inaccuracy produces "deleterious" on operational performance.…”

Um Levantamento Das Causas E Efeitos Da Falta De Acuracidade Nos Estoques: Um Estudo Exploratório

“…Aplicando o conceito da acuracidade no estoque, verifica-se que quanto mais precisas forem as informações dos estoques, mais seguras serão as decisões de seu gerenciamento (WALLER et al, 2006). O trabalho realizado por Rinehart (1960) pode ser considerado a literatura inicial sobre acuracidade. Este autor apresenta uma pesquisa em que analisava os efeitos e as causas das divergências de estoque em uma agência do governo federal americano.…”

Inventory Management: Information, Coordination, and Rationality

“…The implicit assumption was that all demand sources are visible. However, recent surveys and empirical work have shown that unaccounted inventory due to, for example, theft or misplacement, can lead to a significant discrepancy between inventory records and actual inventory (as documented by empirical studies such as Rinehart 1960, Raman et al 2001a,b, ECR Europe 2003). As a result, stock-outs are widespread at retailers and distributors (Alexander et al 2002).…”