Testing the Potential of RFID to Increase Supply-Chain Agility and to Mitigate the Bullwhip Effect

Anthony Vance, Paul Benjamin Lowry and Jeffrey A. Ogden
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Anthony Vance: Brigham Young University, USA
Paul Benjamin Lowry: Brigham Young University, USA
Jeffrey A. Ogden: Air Force Institute of Technology, USA

International Journal of Applied Logistics (IJAL), 2010, vol. 1, issue 1, 48-66

Abstract: This study examines the potential of RFID technology to increase the agility of supply-chain e-commerce systems by mitigating the bullwhip effect. The bullwhip effect is a supply-chain phenomenon that reveals a lack of business agility characterized by the amplification of inventory variance. This study employs an experiment involving a modified Beer Distribution Game to simulate an RFID-enabled supply chain. The results provide empirical evidence that RFID technology can increase a supply chain’s agility and reduce the bullwhip effect by reducing inventory holding costs, stock out costs, and inventory-level variances. The results are all the more important when applied to interorganizational e-commerce systems.

Date: 2010
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Persistent link: https://EconPapers.repec.org/RePEc:igg:jal000:v:1:y:2010:i:1:p:48-66

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