Inventory Record Inaccuracy, Double Marginalization, and RFID Adoption

Heese, H. Sebastian

doi:10.1111/j.1937-5956.2007.tb00279.x

Cited by 215 publications

(127 citation statements)

References 20 publications

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“…They showed that the incentives of the parties for investing in RFID are not perfectly aligned in the existence of the fixed cost of investment. Heese [33] investigated the effect of inventory inaccuracy on supply chain performance and the impact of double marginalization on the parties' incentives for RFID adoption. They showed that RFID adoption improves supply chain coordination and a decentralized supply chain can benefit more from RFID technology.…”

Section: Literature Reviewmentioning

confidence: 99%

Risk Analysis of a Two-Level Supply Chain Subject to Misplaced Inventory

Zhu

Lee

2017

Applied Sciences

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Abstract:Misplaced inventory is prevalent in retail stores and may lead to the overall poor performance of the supply chain. We explore the impact of misplaced inventory on a two-level supply chain, which consists of a risk-neutral supplier and a risk-averse retailer. The supplier decides the wholesale price to maximize her profit, whereas the retailer decides the order quantity to maximize his utility. Under the Conditional Value-at-Risk (CVaR) criterion, we formulate the problem as a Stackelberg game model and obtain the equilibrium solutions in three cases: (i) information asymmetry about inventory errors exists; (ii) the retailer shares information about inventory errors with the supplier; and (iii) in order to reduce misplaced inventory, the supply chain deploys Radio-Frequency Identification (RFID) technology. The benefits of information sharing and RFID implementation are explored. A revenue and cost sharing contract is proposed to coordinate the supply chain and to allocate the cost savings from RFID implementation among supply chain participants. Finally, we provide managerial insights for risk-averse decision makers that are considering investing in the RFID technology.

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Section: Literature Reviewmentioning

confidence: 99%

Risk Analysis of a Two-Level Supply Chain Subject to Misplaced Inventory

Zhu

Lee

2017

Applied Sciences

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“…Order was generated using the new information system linked to the RFID technology. [11][12][13][14][15][16] In Model 3 (automated delivery) or AGV Model, inventory checking, picking and replenishment at service points were manual, order was generated by manually keying in the existing hospital information system while transportation was automated using AGVs. Detailed comparison of the 3 models in terms of process is depicted in Table 3.…”

Section: Details Of Interventionsmentioning

confidence: 99%

Technology in healthcare: A case study of healthcare supply chain management models in a general hospital in Singapore

Mittal

Maw

Soong

2017

JHA

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Objective: To simulate and compare a manual hospital supply chain management model versus a process that is technologically integrated (either by Radio Frequency Identification [RFID] technology or automated guided vehicles [AGVs]), in a general hospital in Singapore. Methods: Design: Deterministic modelling of hospital supply chain management for manual and technologically integrated processes as part of the institutional quality improvement exercise. Setting: Study was conceptualised during re-location of a 355-bed general hospital to newer premises within Singapore with an increased capacity of 700 beds. Study duration was 1.5 years and data collection was performed from Sep 2014 to Sep 2015. Results: Automating the inventory check and use of automated guided vehicles for medical supplies can improve business and operational performance by saving time on no-value added activities that can be transferred to patient care. RFID intervention requires least number of man-hours per day reducing the total manpower requirements by about one third as compared to the manual process while improving productivity by about 40%, it also provides cost savings of about 25% over a period of 10 years. Sensitivity analysis shows that extent of these cost savings are dependent on overall staff utilisation. Although use of AGV alone is expensive in our model, combining AGVs with RFID technology provides the least manpower dependence among the different interventions studied, it also gives a positive return on investment as compared to manual process beyond 3 years of operations. Conclusions: Optimising supply chains within healthcare helps minimise manpower dependency and costs. However, prior to adopting a specific intervention, the unique characteristics of each healthcare setting should be considered. There is need for similar research into healthcare supply chains to identify key determinants to cost savings and improving productivity, both locally and regionally.

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“…Item-level information visibility is analytically analyzed by Zhou [117]. Inventory-record inaccuracy in a supply chain model is discussed by Heese [57]. A simulation-based framework for evaluating the effect of inventory error on the performance of complex distribution systems was developed by Goebel and Günther [51], which allows one for comparing the profitability of RFID for inventory tracking with other managerial measures.…”

Section: Rfid In the Supply Chain -Towards An "Internet Of Things"mentioning

confidence: 99%

RFID and the Internet of Things: Technology, Applications, and Security Challenges

Evdokimov

2010

FNT in Technology, Information and Operations Management

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Inventory Record Inaccuracy, Double Marginalization, and RFID Adoption

Cited by 215 publications

References 20 publications

Risk Analysis of a Two-Level Supply Chain Subject to Misplaced Inventory

Risk Analysis of a Two-Level Supply Chain Subject to Misplaced Inventory

Technology in healthcare: A case study of healthcare supply chain management models in a general hospital in Singapore

RFID and the Internet of Things: Technology, Applications, and Security Challenges

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