Assessing the Impacts of RFID on Inventory Management - A Simulation Study for the Retail Industry
Date Issued
2006
Date
2006
Author(s)
Huang, Ju-I
DOI
en-US
Abstract
Radio Frequency Identification (RFID) has been widely regarded as a revolutionary technology for supply chain management in the coming years. Thanks to its capability of tracking goods in real time, RFID provides an unprecedented visibility to supply chains, which is believed to bring about a considerable number of benefits such as reduction of labor costs, increase of product availability, speedup of the checkout time in retail counters, and improvement of supply chain coordination. Among the many proposed applications, inventory management in retail stores has been commonly identified as one critical application of RFID. Although business consultants and academic researchers are highly interested in the estimation and assessment of the benefits and values of RFID deployed in retail stores, most of their figures and claims are based on certain simple assumptions rather than numerical simulation models.
This thesis aims at investigating the impacts of deploying RFID on general retail stores, which have been suffering from a variety of inventory management problems such as obsolete goods, internal and external theft, and process failure which are all the primary causes of inventory inaccuracy. We start with understanding how RFID can influence the fundamental operating characteristics of a typical retail system. Via simulation modeling that applies the concept of System Dynamics, we observe how the influences in the operating characteristics, for example, inventory accuracy, can be of help to achieve the refinement of replenishment planning and decisions. Through various modeling schemes, we accordingly appraise the value of introducing RFID into the replenishment process. As the simulation results shown in this research, under different scenarios using RFID could bring in different values for the retail store. On the other hand, by way of amending replenishment policies it is possible to compensate the absence of RFID to a certain degree. It is certain that the overall cost issue of adopting RFID could not be ignored either.
Subjects
無線射頻
存貨管理
RFID
Inventory Management
Type
other