2016 IEEE International Conference on Internet of Things (iThings) and IEEE Green Computing and Communications (GreenCom)

and IEEE Cyber, Physical and Social Computing (CPSCom) and IEEE Smart Data (SmartData)

An IoT Application for Inventory Management

with A Self-Adaptive Decision Model
Lizong Zhang Nawaf Alharbe Anthony S. Atkins
School of Computer Science & College of Community of Badr Faculty of Computing, Engineering
Engineering Taibah University, and Sciences
University of Electronic Science and Badr, Kingdom of Saudi Arabia Staffordshire University,
Technology of China, nrharbe@taibahu.edu.sa Stafford, United Kingdom,
Chengdu, China a.s.atkins@staffs.ac.uk
l.zhang@uestc.edu.cn

Abstract— Safety storage in large warehouse is an urgent issue
to be addressed by both the local authorities and businesses,
especially after the Tianjin explosions. This paper proposes an
inventory management system for a warehousing company. The
system integrates RFID technology and a self-Adaptive distributed
decision support model for inbound and outbound actives,
inventory location suggestions and incident handling. The model
consists of three major components: environment recognition,
knowledge merging and the decision making. In addition, a ‘self-
adaptive’ feature is adopted for adjusting the knowledge used in
decision making procedure. An experiment is also outlined to
validate the utilisations of our model and the proposed system.
Keywords—Distributed Decision Support; Self-adaptive System;
RFID; Inventory Management
I. INTRODUCTION
Businesses incur costs to store, track and secure inventory.
Inventories that are mismanaged can create significant financial
problems for a business, where the mismanagement can cause
an inventory glut or shortage, or even worse, results in deadliest
disasters.
Inventory management of raw materials and products is
often concerned and attracts a lot of scholars' attentions.
However, with the growing public awareness of security, the
safety storage is an urgent issue to be addressed by both the local
authorities and businesses, especially after the Tianjin
explosions.
Near midnight on the night of 12th August 2015, a
catastrophic warehouse explosion occurred in Tinajin, near
Bohai Bay, generating mass casualties, including 165 victims
with nearly 800 additional people reportedly injured, and over
$1.5 billion in economic losses. The warehouse was a storage
area for containers of hazardous materials, but inventory
negligence led to dangerous chemical storage layout, and finally
caused a deadly explosion.
An achievable solution for the problem is to adopt the
concept of Internet of Things (IoT) using RFID technology to
track the material, and providing messages or warnings when
incorrect behaviours are detected. A novel inventory
management system with a self-adaptive distributed decision
support model is proposed in this paper. It aims to provide the
transportation and inventory information of storage objects, with
the intelligent decision support for incident situation and storage
activities.
We also outline a simulation experiment to validate the
utilisations of our model and the proposed system as well. The
prototype design is also confirmed by a local warehousing
company that they estimated it could result in a 10% work
efficiency improvement to their current work procedures.
The rest of this paper is organized as follows: Section 2
describes the approach of our model. Section 3 discussed the
design of our proposed system with the model, and then an
experiments with the data from our previous work is presented.
II. SELF-ADAPTIVE DISTRIBUTED DECISION SUPPORT MODEL
The proposed Self-Adaptive Distributed Decision Support
Model is a more ‘generic’ approach to provide intelligent
support for IoT applications. It is designed with three major
components: environment recognition, knowledge merging and
the decision making. A ‘self-adaptive’ mechanism is introduced
for adjusting the knowledge used for decision making, which
enables the model to give a better ‘fit’ to the deployed scenario
automatically.
The history of the ‘decision support system’ concept can be
traced back to 1971 [1], it has been further developed over the
past decades. In its research domains, the distributed decision
support system is the one that has received growing attention
from researchers [2-4]. Most of the researches aims to break
down the decision task to several sub-tasks that are carried out
by serval decision agents, the final results are provided from the
negation of the results, either by the agents, or a central unit[3,
5]. Another approach of distributed decision support focus on
the fusion of heterogeneous information from different source
[6-8], this approach normally assumes that the outside
environment is explicit to the agents and the system[9, 10] with
a static knowledge base.
However, under the inventory management scenarios, and
the concept of IoT, the system deployed environments are
usually dynamic and complex, thus a new approach of
distributed decision support system is required for the proposed
inventory management system.

978-1-5090-5880-8/16 $31.00 © 2016 IEEE 317

DOI 10.1109/iThings-GreenCom-CPSCom-SmartData.2016.77
A. Overview of the model
The proposed model is a distributed system, and the decision
procedures are carried out locally at the ‘node’ level, rather than
in a central decision unit. The central unit of our model is only
controls the self-adaption procedure, and does not carry out any
decision making.
Fig. 1. Work procedures of the proposed model
The work procedures of our proposed model are illustrated
in Fig. 1. Briefly, the decision support procedure starts from
environment recognition by using a neural network approach,
and the recognition results are used to select the knowledge
segments from several pre-set knowledge bases. A knowledge
merging process is then carried out to generate a local
knowledge base from the selected knowledge segments. After
the local knowledge base is created, decisions are then able to be
made by the node’s own reasoning module. Finally, the decision
result is evaluated either by the system or by the users. The
evaluation result is used in self-adaption process as a reference
for adjusting the benchmark of knowledge selection. Once the
adjustment exceeds a certain threshold, the local knowledge
base is re-created. This process aims to improve the fitness of
the knowledge for nodes’ deployed scenario, and thus, we called
this mode is a ‘self-adaptive’ model.
B. Work procedures of the proposed model
The details of the model are described as follows:
1) Scenario Recognition Scenario Recognition
The first task of our model is to correctly recognise the
scenario of where a node is deployed. The Artificial Neural
Network (ANN) approach is used in our model for this task, it is
normally used for pattern recognition [11]. The scenario
recognition result in our model is a matrix that contains possible
‘domains’ or aspects of circumstances, instead of giving an
exactly environment type. This is in consideration of the
complexity and dynamicity of real world. Normally, the scenario
recognition procedure consists of the following two actions:
Action 1: Determine the features used for scenario
recognition: it consists of two parts, find out all possible
features and then reduced the quantity to a reasonable number.
However, to determine the features used for the scenario
recognition is an application related task, as the features are very
different depending on the application scenarios. Consequently,
a general approach is then provided in the proposed model. The
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feature generation step is suggested focus on the objects
involved in the system, the feature can be generated from the
statistical data and the parameters of the object itself. For
example, the features can be the number of the object type, the
count of the objects detected by a node in a certain time period
etc. it can also include features from radio aspects if wireless
communication technology, such as RFID or ZigBee technology
is used, and for example, ‘Received Signal Strength Indication
(RSSI)’.
The number of generated features could be over a hundred,
and thus a feature selection step is carried out. A modified
version of Clamping Network approach with ‘Weighted Moving
Average’ sliding technology is used in our model [12]. This
approach uses a set of training data collected from the deployed
environment, and pre-processed into time-sequence data and
separated to serval patterns by using WMA method. Then, a
modified Clamping Network approach is used to select the most
‘important’ features in terms of the accuracy of the network [13].
The ‘accuracy’ criterion is suggested to use that the value of
most suitable ‘domain’ or ‘aspect’ in the matrix which exceeds
0.5 in the result matrix.
Action2: Training the artificial neural network: The
Network structure and training methods in our model is the
Back-Propagation neural network that contains one hidden layer
[14]. It can be replaced by other type of neural network if
required. Normally, this network is the same as the network used
in the feature selection process. The output layer of the network
is used to build a matrix as the environment recognition result,
each output node represents an ‘aspect’ of the deployment
scenario. This approach enables the ‘free selection’ of the
knowledge elements by using the result matrix as a benchmark.
The scenario recognition procedure is illustrated in Fig. 2.
Fig. 2. Feature selection and training the network
2) Step 2: Knowledge Selection
Several pre-set knowledge bases are created as the source of
the ‘local knowledge base’. A ‘base weight’ is assigned to these
pre-set knowledge base for knowledge selection and self-
adaption progress. The range of the base weight value is
normally set from 0 to 1. In addition, each knowledge element
has a Boolean matrix with the same schema of the scenario
recognition result.
The knowledge selection procedure is simple: the product of
base weight and the Boolean matrix of a rule is compared to the
recognition result, if any elements of in the first matrix is greater
than the corresponding element of the recognition matrix, this
knowledge segment is then selected.
3) Step 3: Knowledge merging
The selected knowledge elements may contain confliction
and inconsistencies, and thus they cannot be directly used as the
This action is carried out after the evaluation is received. The
step size is according to the evaluation that is in the format of
percentages. The following empirical equation is used for this
action:
local knowledge base. A knowledge merging process is then
carried out with a symbolic approach [11, 15, 16]. This approach
is firstly trying to find any possible extra condition attributes (i.e.
the antecedent of a rule) of the inconsistent knowledge elements
and to check it would help for removing inconsistence. Or
secondly, if the first step attempting fails, a weakening process
for the inconsistent knowledge is then carried out. It identifies
possible conflict, inconsistent or duplicated attributes of
knowledge elements with the help of a relationship table of
attributes values that created in knowledge selection step. A
meta rule set is associated for controlling the merging process.
And after the inconsistence removed, the knowledge elements
set are then used as the local knowledge base of a node.
4) Decision Making
Unlike other decision support systems, the decision making
is carried out locally by the nodes individually without any help
from the central unit. The node has its own rule-based system
and use the local knowledge base to determine the decisions.
Normally, the system follows event-drive schema, it could be by
using a set of meta rule for event confirmation, or just build into
the application, for example, the detection of RFID tag can be a
start of a decision making process. However, the determining of
an event occurrence is an application related design, the details
are unable to be clearly provided in model design.
5) Step 5: Self-adaption process
The ‘self-adaption’ feature of the model is carried out both
locally and globally. It consists of two parts, firstly, modifying
the base weight of the pre-set knowledge bases of a node,
according to the decision evaluations; and secondly, determining
the time of recreating the local knowledge base.
The first part of self-adaption requires the evaluation of the
decisions, it is an application related task. But normally, the
result of evaluation indicates the positive or the negative of the
effect from the decisions, and thus, the base weight can be
modified according to this evaluation.
The base weight modification step contains two actions:
firstly, a ‘reward’ base weight is added to all pre-set knowledge
base that help make out the decision, regardless of the decision
correctness. This action is carried out immediately after a
decision is made out by the following equations:
= ∗ − ∗ 
Where is the number of the knowledge elements that
are in this pre-set knowledge and are also selected in the local
knowledge base; is an empirical parameter to control the step
size, we set it to 0.05 in our application.
The second part of self-adaption is to determining the time
of local knowledge base regeneration. The regeneration can be
triggered manually by the users when required, or it can be
triggered automatically by measure the changed base weight: if
the total changed base weight in percentage is greater than the
number of improper used knowledge elements in percentage,
then, the regeneration process is started.
III. THE SMART INVENTORY MANAGEMENT SYSTEM
In this section, a smart inventory management system using
our proposed model is discussed. The system was original
designed for a UK local storage company that was handling
cardboard, metal material and oil. The system was designed for
monitoring the state of the storage warehouse, including
environment conditions and inventory information. It also
provided decision support during the processes of inbound,
outbound and storage. However, the decision support module of
the system had been carefully ‘localized’ and ‘customized’ in
order to match its application environment. Thus, it has
difficulties to be used in other scenarios, i.e. by other storage
companies. In order to overcome this issues, we outlined an
‘upgraded version’ of the system: the smart inventory
management system with a self-adaptive distributed decision
support model.
A. Background
This UK local storage company charges their customers for
storage by volume, weight and material. it has a large old-style
warehouse for normal goods storage, such as cardboards, metal
material that does not require special environment, and two
smaller warehouses that are equipped with thermometers,
hygrometers, air conditioner and motion sensors for goods that
require a special environment. Each smaller warehouse has 12
room that the environment can be adjusted respectively.
In the previous design, the smart inventory management
= ∗ + ∗ ⁄  system was mainly developed for tracking purpose by using
RFID equipment either fixed RFID readers or RFID handheld
devices that generated location information of objects. Other
Where is the percentage of the knowledge types of information were inputted by operating staffs, such as
elements that are not selected into the local knowledge base. the type and volume of goods. The pervious design was a
is the number of knowledge elements in the local centralized decision support system, and there is a central server
located in the company headquarter for processing data, making
knowledge base, and is the total number of knowledge decisions and sending back decision results to related devices
elements of the system. that are carried out by operating staff.
Secondly, a ‘reward’ or ‘punishment’ adjusting is applied to
the base weight that regarding the correctness of the decision.

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 The system provided decision support for the inventory
actives in three aspects: inbound and outbound actives,
inventory location suggestion and incident handling. It aimed to
relief the two members of staff from the increasing workloads
who are engaged in arranging the inventory location manually,
and to provide solutions for operating staff in unexpected
situation.
However, the design of the previous work has a weakness:
the centralized structure requires the decisions have to be made
after all related information is received. It could result in
incorrect solution and misjudgement of events, due to the
absence of importation data or information.
In addition, the system has difficulties to be used by other
similar companies, it had been carefully ‘localized’ and
‘customized’ for the company; the knowledge used in decision
support module was in a single knowledge base, and the
conflictions and inconsistence were removed manually. Thus, in
order to be used for other companies, the decision support
module must be re-designed, as well as the knowledge base.
Consequently, a new model is developed in order to
overcome these limitations. It is a more ‘generic’ approach to
provide intelligent support for the system with a distributed
schema. The decision procedures are carried out locally at the
‘node’ level, rather than in a central decision unit. The nodes of
the model represent the function units of the system, such as
vehicles, customer sites or a recycling centres etc. Thus, the
system is able to make correct decisions without whole system
information and within a limited amount of time. In addition,
with the self-adaption feature, the nodes are able to generate
more suitable knowledge base automatically for their deployed
environment.
B. System design
The layout of the design is briefly illustrated in Fig. 3. Each
node has a pre-trained neural network as a scenario recognition
module, and a knowledge-based system as a decision making
module. Thus, a node is able to carry out decision making
procedure individually.
Fig. 3. The system architecture
The nodes communicate to the server with a program that
running on hand devices or local computers that were deployed
nearby sensors. A node normally consisted of one or more
sensors and a computer. The sensor technology used in the
proposed system are RFID technology, motion sensors,
thermometers and hygrometers. RFID equipment used in this
system was from Alien Technology, includes 5 handheld
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devices that carried out by operating staff and 10 fixed Reader
with 40 antennas that deployed in the warehouses. All ‘objects’
in the system had been labelled with passive RFID tags. The
‘objects’ included vehicles, goods and operating staffs that with
RFID enabled pass cards.
1) Pre-set knowledge base
The knowledge used in the application was collected by an
interview with 2 members of management staff and 3 members
of operating staff. Four of operating handbooks were also
examined with the support of the management staff. Finally, 179
raw knowledge elements were collected.
A manual procedure was then carried out in order to create
the pre-set knowledge bases. The raw knowledge elements are
grouped into 6 pre-set knowledge bases according to their
application domains (scenario). During this step, inconsistences,
duplications and conflictions of knowledge elements in the pre-
set knowledge bases are removed.
A Boolean matrix was assigned to each rule, and it consisted
of 6 elements that indicate the fitness of a rule to a specific
scenario. In our proposed system, the matrix was used as filter
for knowledge selection from the pre-set knowledge base, and a
rule normally had 2-3 of possible application fields.
In addition, each pre-set knowledge base was assigned a
‘base weight’ to enable the self-adaption feature. The weights
were used in rule selection step and initially set to 0.5. This
weight was changed during the decision evaluation process
according to the user evaluation, or a fitness function that for
minimum the storage cost in terms of total routing length and
actual volume occupied.
2) Scenario Recognition
The scenario recognition result matrix is generated by a pre-
trained network and describes the current scenario by the beliefs
level of 6 elements in this result matrix. The deployed
environment was not clearly classified into a certain category,
due to the dynamic and complexity of real world. The
recognition result was used as guidance for selecting knowledge
from pre-set knowledge base, in order to ‘fit’ the real scenario
as much as possible.
In order to train the neural network for scenario recognition,
40 hours of raw data were collected. The data is treated as time
series data and then to be divided into small segments, and the
Sliding Window technology is used. After examination of the
raw data, a frame length of 30 seconds and a windows size of 1
hour is decided in consideration of the sample density.
The possible features used in environment recognition are
computed from the statistical data about objects that were
detected in a window. The raw RFID data such as signal strength
and reading time are also included. These features are calculated
from both time and frequency domains.
The criteria of the accuracy of the network is that the
scenario of the node deployed in the result matrix has the belief
that exceeds 0.5. The overall aim of the scenario recognition is
to generate the most suitable local knowledge base for nodes.
The accuracy is not so important when compared to other pattern
recognition application.
 TABLE I. SELECTED FEATURES adaption process is to modify the base weight according to the
evaluations, and consequently, in knowledge selection step,
more appropriate knowledge elements could be selected, and
thus, the decision made by the updated knowledge local are
more ‘adaption’ to the scenario. In this proposed system, the
decision receives ‘reward’ if the evaluation is greater than 50%,
otherwise it will be a ‘punishment’. The details of the self-
adaption process are described in Section 2.

IV. RESULT AND DISCUSSION

In this prototype design, we finally selected 11 features from
the training data with the method described in Section 2, and the A simulation experiment was carried out by using the data
listed in TABLE I. collected from real application environment, but all sensitive
information is removed. This experiments aims to evaluation the
The neural network used in this experiment was developed utilization of our proposed model in storage industry.
using MatLab Neural Network Toolbox®, the network has the
same layout as the BP network of feature selection. The neural The experimentation is simulated in a signal desktop
network has 11 input units, 6 output units and one hidden layer computer by using our own program. A 5-days of data was used
with 8 hidden units. The trained network is used as scenario for training the model, and plus one day of data for recognition
recognition module. training. The initial local knowledge bases were manually
created from one pre-set knowledge base which was the most
The local knowledge bases were manually created from one suitable to the environment of the nodes.
pre-set knowledge base that was the most suitable to the
environment of the nodes. The recognition result of the neural
TABLE II. RESULT OF THE EXPERIMENTATION
network is used in later self-adaption step for modification of the
local knowledge. Day1 Day2 Day3 Day4 Day5
3) Creating of local knowledge base Regeneration count 19 8 3 3 1
The scenario recognition result matrix is then used to
Correct decision 26 67 76 86 78
selected to a knowledge set for the knowledge merging: the
matrix is used as a benchmark that compares to the product of Incorrect decision 10 6 4 6 8
the base weight and Boolean matrix of each rule. If any element Fake decision 13 9 1 3 2
of the product is greater than the corresponding element of the False decision 8 5 3 2 4
recognition result matrix, the knowledge element is then
selected. The selected knowledge elements were used to create Total error decision 31 20 8 11 14
a local knowledge base by a knowledge merging process that is Total decision 57 87 84 97 92
for removing possible inconsistence. Accuracy (%) 45.61% 77.01% 90.48% 88.66% 84.78%
4) Decision making
The proposed system follows the event-drive approach. The During the experimentation training stage, there are in total
application of nodes handles the event determining task. if the 34 of regeneration with 417 of decision made, the average
occurrence of an event was confirmed, the relative information accuracy of decision was 77.3%, and if takes only the decisions
was then passed to the decision making module. in the last 3 days, the accuracy improved to 87.9%. However,
The events determining are normally started by a detection there are about 11% of the decisions are not properly triggered,
of RFID tag, but also can be triggered by the requests from this limitation may be caused by the knowledge we used is
operating staffs or remotely from management staffs. The mostly from interview of staff that may contain errors, and the
decision results made by the nodes are then send to the selected test data which is randomly created from old records that may
devices either automatically or by the management staff be different to the actual environment.
manually. The point of the experimentation shows that firstly, correct
5) Evaluation and self-adaption process decisions can be made locally by a node with limited
After the decision applied, the evaluation is dependent on information, and secondly, “decisions making” can self-adapt to
user assessment. The related users are required to provide their deployed environment without manually re-create their
confirmations and evaluations of the decisions, as there is no knowledge base. In addition, with the layout of the proposed
method that can be used to confirm the correctness of a system, new knowledge can be easily adding to related pre-set
‘suggestion’ or ‘instruction’ without human involvement. The knowledge base, instead of manually modification of entire
users are required to evaluate the ‘fitness’ of a decision in knowledge used in the system.
percentage from 0% to 100%, where 100% means the decision In addition to the experimentation described above, the
are correct and suitable to the deployed scenarios of nodes. design was shown to a local storage company that normally
The next step is to modify the base weights. It is a local, handling chemical goods. Their work procedure is very similar
internal procedure that only affects the node itself: The self- to the UK company mentioned in this paper. An evaluation was

321
provided by the company after a carefully examination of our
design.
They confirmed the design has the following advantages:
firstly, the tracking feature is the most important feature.
Secondly, the instruction and incident handling feature are
useful for their new employee. However, they pointed out there
is cost issue about the investment of the layout, the handle device
is expensive and they prefer using square code with Android
phone or cheaper RFID reader. Finally, they confirmed that the
system would improve at least 10% their work efficiency, in
terms of storage process and incident handling time.
V. CONCLUSION
In this paper, a novel inventory management system
designed for storage company is described. It uses the RFID
technology for tracking the movement of goods, and a proposed
self-adaptive distributed decision support model is introduced to
enable the system automatically ‘fit’ to its deployed
environment by adjusting of the nodes’ knowledge base.
The proposed model provides a more generic approach for
decision support in inventory management. It uses a distributed
schema and all decision makings are carried out by the nodes
individually to avoid any possible delay caused by network
communications. The model uses the result of scenario
recognition as a benchmark for knowledge selection to create a
local knowledge base that used by node individually to carry out
the decisions with its own rule-based system. In addition, a self-
adaption step is introduced to further modify the local
knowledge base for better adaption to the scenario where the
node deployed.
A simulation experiment is then carried out in this paper, in
order to prove the utilization of the proposed inventory
management system, as well as the self-adaptive model. This
design is also confirmed by another chemical storage company,
and they estimated the design could bring 10% work efficiency
improvement to their current work procedures.
ACKNOWLEDGMENT
This work was supported by the Applied Basic Research
Programs of Science and Technology Department of Sichuan
Province of P.R. China [grant numbers 2015JY0228]; the
Project Sponsored by the Scientific Research Foundation for the
Returned Overseas Chinese Scholars, State Education Ministry;
and the Fundamental Research Funds for the Central
Universities [grant numbers ZYGX2015J063].
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