Question

Briefly explain how RFID can be used to manage inventory. In your answer, please explain why item-level tagging is more expensive than case-level tagging. What might be some benefits of item-level tagging over case-level tagging?

Answer 1

How RFID can be used to manage inventory:

RFID, Radio frequency Identification, is a latest technology in tracking of units in supply chain after barcode scanner. There are 6 classes that are used in this namely 96-bit EPC, 8-bit header, 28-bit EPC (to identify manufacturer), 24-bit class (used for identifying product family), 36-bit serial number. Talking about numbers, header has capability to identify 256 versions, 28-bit can identify more than 268,000,000 companies, 24-bit can identify more than 16,000,000 product families, and serial number can identify more than 68,000,000,000 items. When using this huge database for identification, it is not wrong to say that RFID has completely revolutionalised inventory management.

Why item-level tagging is more expensive than case-level tagging:

As the tagging is done on each individual items, the cost involved gets more on packaging, transportation, tracking, and receiving of units. Hence, item level tagging is more expensive.

Benefits of item-level tagging over case-level tagging:

• Safety stock value gets reduced
• Lower out-of-stocks for individual items
• You can Pay-on-scan for each item
• Better consumer understanding for each unit
• Better R&D of products is possible