Misplaced inventory and lead-time in the supply chain: analysis of decision-making on RFID investment with service level

DOI10.1155/2014/135284MaRDI QIDQ2336152zbMATH OpenOpenAlexDBLPWikidataFDO

Authors Li-Hao Zhang, Tijun Fan, Wen-Chyuan Chiang, Feng Tao

Publication date 19 November 2019

Published in Journal of Applied Mathematics (Search for Journal in Brave)

Copyright license Creative Commons Attribution 3.0 Unported

Full work available at URL https://doi.org/10.1155/2014/135284

Mathematics Subject Classification ID

Inventory, storage, reservoirs (90B05) Production models (90B30)

Review text

Summary: Radio-frequency identification (RFID), as the key technology of Internet of Things (IoT), has been hailed as a major innovation to solve misplaced inventory and reduce lead-time. Many retailers have been pushing their suppliers to invest this technology. However, its associated costs seem to prohibit its widespread application. This paper analyzes the situation of service level in a retail supply chain, which has resulted from misplaced inventory and lead-time. By newsvendor model, we analyze the difference between with- and without-RFID technologies in service level of centralized and decentralized supply chains, respectively. Then with different service levels, we determine the tag cost thresholds at which RFID technology investment becomes profitable in centralized and decentralized supply chains, respectively. Furthermore, we apply a linear transfer payment coefficient strategy to coordinate with the decentralized supply chain. It is found that whether the adoption of RFID technology improves the service level depends on the cost of RFID tag in the centralized system, but it improves the service level in the decentralized system when only the supplier bears the cost of RFID tag. Moreover, the same cost thresholds of RFID tag with different service levels exist in both the centralized and the decentralized cases.

Recommendations

• Impact of RFID technology on coordination of a three-tier fresh product supply chain
• The impact of RFID investment on complex product in three-level assembly supply chain
• RFID adoption strategy in a retailer-dominant supply chain with competing suppliers
• Supply chain coordination under inventory inaccuracy with RFID technology
• Radio-frequency identification (RFID) adoption with inventory misplacement under retail competition

Cites work

• A comprehensive analysis of the newsvendor model with unreliable supply
• Analysis of a newsvendor which has errors in inventory data records
• Execution errors in retail supply chains: analysis of the case of misplaced products
• Leadtime-inventory trade-offs in assemble-to-order systems
• Performance Analysis and Optimization of Assemble-to-Order Systems with Random Lead Times
• Quick Response in Manufacturer-Retailer Channels
• Single-vendor multi-buyer integrated production-inventory model with controllable lead time and service level constraints
• Timing of RFID Adoption in a Supply Chain

Cited in

(5)

• A technical and business perspective on wireless sensor network for manufacturing execution system
• Random misplacement and production process reliability: a sustainable industrial approach to deal with the discrepancy and deficiency
• Incorporating ARIMA forecasting and service-level based replenishment in RFID-enabled supply chain
• The impact of false-negative reads on the performance of RFID-based shelf inventory control policies
• The impact of RFID investment on complex product in three-level assembly supply chain

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