Research On Inventory Inaccuracy Of Retailers Based On Internet Of Things

Inventory management is an key factor for retailers to deal with the fierce marketcompetition, and also tap retailers’ potential. However, the traditional inventorymanagement technology does not solve the inventory inaccuracy problems because ofits technical defects in the process of optimizing inventory management. There is andiscrepancy between the physical inventory and information inventory, therebyleading to incorrect inventory decisions and earning expectations of the retailers basedon the inaccurate inventory data. Internet of Things (IOT) with its real-timemonitoring, automatic alarm, artificial intelligence and other technical advantages canbe a good solution to manage inventory accurately and solve the problem of inventoryinaccuracy through the use of scientific and rational means of information, and finallymeet the requirements of modern inventory management.However, the cost of the Internet of Things is significant, the retailers do notdetermine the standard of the Internet of Things, and it exacerbates the concerns ofretailers and members of the supply chain, people usually ignore the benefits of RFIDtechnology and the Internet of Things, and finally delay the development speed ofInternet of Things. Therefore, to make full use of the new technology to improve theinventory distortion, and whether or not to adopt the Internet of Things technologyhave become the key issues that retailers have to deal with.The thesis carries out research on the application of Internet of Things technologyin inventory distortion based on a two-stage supply chain:First, the thesis discusses the theory of the Internet of Things and inventory,elaborates the architectures, supporting technologies, basic features of the Internet ofThing, as well as the concept of the inventory, the reason of inventory distortion, andthe information distortion in the process of traditional inventory management. Thenthe thesis concludes the strategic advantage of Internet of Things in inventorymanagement, which is a theoretical foundation for retailers’ inventory improvementsbased on the Internet of Things..Second, the thesis explains the technical advantages of the Internet of Things ininventory information management, indicates the application prospect of Internet ofThings in the field, which lays the foundation for this study. Then the thesis elaborates the cost-benefit effect of application of Internet of Things on retailers, providing atheoretical basis for retailers.Finally, the thesis builds a research model of the inventory inaccuracy to do thecost–benefit analysis of application of Internet of Things. It focuses on thecost-benefit effect of inventory information inaccuracy and application of Internet ofThings under newsvendor model, draws loss of benefit due to the inventoryinaccuracy and improvement of benefit due to application of Internet of Things, thenraises the cost threshold for retailers to adopt the technology of the Internet of Things,and make a feasible proposal for retailers to decide whether or not to adopt theInternet of Things.