Inventory Replenishment Policies for a Grocery Supply Chain Using RFID to Improve the Performance Frontier
RFID; supply chain; inventory; stock
Journal of Supply Chain and Operations Management
This paper examines the use of RFID as an automatic identification data capture (AIDC) technology and as a tool for data analysis. The primary purpose of this paper is to provide an example of how RFID, for collecting timely and relevant data, could be applied to supply chain analytics. We use a simulation study of a two-echelon system of a retail store and a distribution center (DC) to model an inventory replenishment method that examines the value of using RFID for decision making. We report on five of seven collected performance measures for each of the simulated scenarios. One important finding of this research is that with the improved inventory record accuracy that RFID technologies provide, grocery stores can take advantage of more efficient reordering policies. The paper concludes with a discussion on RFID’s implication for facilitating an inventory replenishment system generated by the DC instead of the retail stores.