A simulation approach to evaluate the impact of introducing RFID technologies in a three-level supply chain

The aim of this paper is to analyze the impacts of RFID technologies on supply chain performances, in particular to evaluate their economical impacts and to conduct ROI (return-on-investment) analyses. We simulate a three-level supply chain in which thefts, misplacements and unavailable items for sale cause inventory inaccuracies that decrease the supply chain performance. We compare the effects of different RFID technologies and with different tagging levels for different product types. The main originality of our research is that we are considering that there are various possible RFID systems of different costs and potential profits. The results indicate that different technologies can improve the supply chain performance at different ratios. The economical impacts depend on the chosen technology, the tagging level and the product. Our analyses thus show that the ROI of RFID applications strongly depends on the settings.