Using Radio Frequency Identifications Technology in Inventory Control: An Application of the Implementation of RFID Technology

Inventory accuracy is one of the keys to an efficient supply chain, yet it is often referred to as the ‘missing link’ in retail execution. Large retail operations face enormous challenges tracking their inventory and preventing errors while ensuring products are correctly stored in the proper location in their warehouses. In this book, inaccuracy problems of inventory were tried to be reduced by applying new tracking system using RFID to provide real-time monitoring of inventory levels. An optimization model is proposed to determine the product assortment, inventory replenishment, display area and shelf space allocation decisions that jointly maximize the retailer’s profit under shelf space and backroom storage constraints. The variety of products to be displayed in the retail store, their display locations within the store, their ordering quantities, and the allocated shelf space in each display area are considered as decision variables to be determined by the integrated model. The model is a mixed integer non-linear program that we solved using LINGO software. A case study is conducted to verify the model results and assess the impact of integrating RFID into an existing system.