Impacts of RFID technologies on supply chains: a simulation study of a three-level supply chain subject to shrinkage and delivery errors

This paper addresses the impact of introducing radio frequency identification (RFID) technologies in a three-level supply chain subject to inventory inaccuracy and delivery errors. Inventory inaccuracy occurs because of shrinkage errors (such as thefts, misplacements or unavailable items for sale, etc.), and delivery errors. We develop a simulation study to evaluate qualitative and quantitative impacts of RFID technologies on supply chain performances and profits. Different RFID systems are considered with different costs and efficiencies. Different tagging levels and different types of products are also examined. We analyse the impacts of RFID technologies when supply chains are reengineered using new possibilities enabled by RFID technologies. This paper provides also a general approach to help decision makers using simulation approaches in their decision processes. [Received 10 June 2012; Revised 27 February 2013; Revised 26 July 2013; Accepted 23 August 2013]