System dynamics analysis for RFID-enabled milk-run logistics system in industrial park

Milk-run logistics (MRL) allows the multiple enterprises in an industrial park to integrate their small-batch materials handling tasks into a highly shared logistics process to avoid redundant logistics consumption. Yet the performances of such collaborated process are often affected by the unexpected operational dynamics factors of MRL process, e.g. suppliers´ unstable production rates. This paper, firstly, discusses how to apply system dynamics (SD) approach to design the structure and parameters of the MRL system so as to achieve a statistical optimization with operational dynamics. Then, the MRL system is further simulated by SD in RFID-based information sharing environment, to investigate the comparative advantages of typical RFID application schemes. RFID benefits and the corresponding RoI-based economic analysis are both conducted to provide a comprehensive instruction for those MRL managers.