A quantitative analysis of inaccuracy inventory reducing in multi-period mode: Comparison between RFID and inventory counting

Inventory management decisions are one of the essential factors influencing the profitability of each supply chain member. However, in the real world and due to errors, the physical inventory and the inventory on the information system are frequently not matched, impacting the decision-making regarding inventory control. As a result, managers are constantly looking for ways to eliminate or reduce inventory errors. This study examines a retailer's inventory control problem with transaction errors over time. For this purpose, a single-item multiperiod model that adheres to a periodic review policy will be used. Therefore, the impact of two solutions, inventory counting and using RFID technology, on eliminating or reducing errors is assessed. In the section on inventory counting, unlike most papers that consider a counting cycle for inventory, it will be determined at the end of which period the inventory counting should be performed by acquiring the profit functions and their parameters. Also, when using RFID technology, it may occasionally fail to track the products, so the profit function is acquired with this error rate in mind. Moreover, it is determined when the inventory on the information system should be reset to eliminate errors accumulated over time. Furthermore, because these solutions each have costs, the discrete-event simulation approach calculates their profitability. Also, the profit changing of these solutions will be analyzed about various parameters.