Impact of RFID on Supply Chain
Management: A Simulation Study
Young M. Lee
Radio-frequency
identification (RFID) technology can provide accurate and real time inventory information
throughout supply chain, promoting better supply chain decisions and
performance. In particular, the potential performance improvement in retail
store operations has generated a lot of interest in the industry. We developed a simulation model to study how
RFID can improve supply chain performance by modeling the impact of RFID
technology in a manufacturer-retailer supply chain environment. Our study
provides a quantitative analysis to demonstrate the potential benefits of RFID
in inventory reduction and service level improvement both for manufacturer and
retailer.