Applications of Item-Level RFID for Retail Services

Applications of Item-Level RFID for Retail Services

S. H. Choi (The University of Hong Kong, Hong Kong), H. H. Cheung (The University of Hong Kong, Hong Kong), B. Yang (The University of Hong Kong, Hong Kong) and Y. X. Yang (The University of Hong Kong, Hong Kong)
DOI: 10.4018/978-1-4666-9787-4.ch127
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A number of studies have recently been conducted to illustrate possible applications of item-level RFID for better inventory control and replenishment, stock-out reduction, increased operation efficiency, improved customer experience and differentiation, better prevention of product theft, better brand protection by RFID-based product anti-counterfeiting, and hence improved sales in stores (Marco et al., 2012).

Condea et al. (2012) proposed an RFID-enabled shelf-replenishment method for inventory control and replenishment in retail stores. The simulation results show that the RFID-based policies have the potential to improve cost efficiency and service levels. Xu et al. (2012) compared classical and RFID-based strategies for inventory inaccuracy control in two-echelon supply chain, and concluded that traditional strategies are inefficient while technological approaches such as RFID are able to alleviate the inventory shrinkage problems. Metzger et al. (2013) developed a mathematical model for periodic review and RFID-enabled retail shelf-inventory management, and analyzed the impact of false-negative reads on the performance of RFID-based shelf inventory control policies. Their results show that for low to medium demand rates and low tag cost, RFID systems may operate at lower costs than periodic review systems, cutting cost by 25.7% while increasing service levels by 2%. Rahman and Ahamed (2014) proposed an FSA-based protocol to speed up the authentication process for item-level RFID tagged products in retailing.

Key Terms in this Chapter

E-Pedigree: An electronic record of the movement of a product item.

Product Identifier (PID): A unique number formed by combining 96 bits of EPC with a hardcoded UID in the TID memory bank of a C1G2 UHF RFID tag for identification of a product item.

Item-Level RFID: A C1G2 UHF RFID tag attached to a product item and programmed with a PID to facilitate tracking and tracing of the movement of the product item in the supply chain.

Customer Shopping Behaviour (CSB): A process by which a customer searches for, selects, purchases, uses, and disposes of goods and services, in satisfaction of his needs and wants.

Track-and-Trace: A process of determining the status, including the current and past locations, ownership and other information, of a product item in a supply chain.

Customer Shopping Experience (CSE): A total summary of a customer’s interaction with the retail company beginning before he walks into the store and ending long after he leaves.

Omni-Channel Retailing: An innovative supply chain strategy to provide customer shopping services via all available shopping channels, such as mobile devices, computers, television, and catalogues. Item-level RFID empowers omni-channel retailing because this technology facilitates real-time tracking and tracing of product items to enhance product visibility and inventory control in the supply chain.

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