Inventory record inaccuracy in supply chains: the role of workers’ behavior

Abstract

Purpose This research aims at exploring the effect of inventory record inaccuracy due to behavioral aspects of workers on the order and inventory variance amplification. Design/methodology/approach We 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 our research is that we model workers’ behavior by inheriting a well-known theory from psychology that assumes a U-shaped relationship between stress and errors. We do not validate this relationship in the specific context of inventory operations. Practical implications The paper gives suggestions for managers who are responsible for designing order and inventory policies on how to take into account workers’ behavioral reaction to work pressure. Originality/value The logistics management literature does not lack of research works on behavioral decision making causes of order and inventory variance amplification. Contrarily, this paper investigates a new kind of behavioral issue, namely the impact of psycho-behavioral aspects of workers on variance amplification.