Justifying RFID Investment to Enable Mobile Service Applications in Manufacturing and Supply Chain

Abstract

Radio Frequency Identification (RFID) technology is rapidly expanding its application area from simple inventory management to advanced location tracking and supply chain management in a wide range of industries. Because of the potential benefits gained and high investment costs incurred by RFID, firms need to carefully assess every RFID opportunity and challenge to ensure that their resources are spent judiciously. Because of the lack of analytical methods for measuring the benefits and costs, this chapter presents a mathematical model for the evaluation of RFID investment in manufacturing and supply chain. This model provides a basis for the authors’ understanding of RFID value creation and ways to build an RFID business case for an RFID investment justification.