The impact of RFID on management of returnable containers

Inventory shrinkage is a common problem in themanagement of returnable containers. RFID-based containertracking systems have been proposed as a possible solution.Benefits of RFID-based tracking of returnable transportitems such as pallets, kegs and boxes are documented inseveral case studies, but have so far hardly been analyzedfrom a theoretical perspective. In this article, we analyze theimpact of RFID on container management using a deterministicinventory model. The analysis focuses firstly oninventory control for which we deduce changes due to RFIDfor the optimum policy. We then turn to the profitability ofthe RFID system and determine relevant relations of costsand benefits. Finally we analyze alternatives of implementingan RFID-based container tracking system. These alternativesare analyzed with respect to diffusion speed andprofitability....