The impact of false-negative reads on the performance of RFID-based shelf inventory control policies

Item Type Journal paper

Effective retail in-store logistics are paramount to provide high product availability at minimal operating costs. Despite various efforts by retailers to lower out-of-stock rates on retail shelves, product availability remains insufficient thereby significantly degrading a store's performance. Currently, retailers consider the introduction of Radio Frequency Identification (RFID) to improve the efficiency of replenishment processes in stores. However, the possibilities of RFID are ultimately limited by the physical characteristics of RF communications. Tag detuning and the absorption of radio waves
by the tag's environment may lead to so-called ‘false-negative' reads, i.e., RFID tags in range being undetected by the reader device. Retailers ignoring the impact of false-negatives on the performance of RFID-based inventory control systems run the risk of overestimating the benefits to be expected from RFID. We develop an inventory control policy based on shelf stock information generated by RFID, which specifically accounts for inaccuracies associated with false-negative reads. The mathematical model is optimized for operating costs and compared to a basic periodic review trategy in a numerical study. The results indicate that the impact of false-negatives on cost remains modest for medium to high read rates. However, the system performance is sensitive to a number of exogenous parameters that must be considered when evaluating the practical use of RFID.

Authors Metzger, Christian; Gershwin, Stanley & Fleisch, Elgar
Editors Thiesse, Frederic
Journal or Publication Title Computers and Operations Research
Language English
Keywords RFID, Inventory, Retailing, Shelf replenishment, In-store logistics
Subjects other research area
HSG Classification contribution to scientific community
Refereed No
Date July 2013
Publisher Elsevier
Place of Publication Amsterdam
Volume 40
Number 07
Page Range 1864-1873
Number of Pages 10
ISSN 0305-0548
ISSN-Digital 1873-765X
Publisher DOI 10.1016/j.cor.2013.02.001
Depositing User Prof. Dr. Elgar Fleisch
Date Deposited 25 Apr 2013 16:43
Last Modified 23 Aug 2016 11:16


MetzgerThiesseGershwinFleisch - FalseNegativeReads - COR - 2013.pdf

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Metzger, Christian; Gershwin, Stanley & Fleisch, Elgar (2013) The impact of false-negative reads on the performance of RFID-based shelf inventory control policies. Computers and Operations Research, 40 (07). 1864-1873. ISSN 0305-0548

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