Return on Investment Analysis for Evaluation of RFID Implementation on Cargo Operations

Abstract

Radio frequency identification (RFID) is one of the most promising new technologies to provide better monitoring and coordination in the supply chain. However, high investment cost and inadequate technical capability remain as challenges for RFID system implementations. That being the case, fair evaluation of savings associated with increasing performance and investment costs has a great role in the success of RFID projects. This study presents an initial methodology for the adaptation of RFID technology to the service processes of a Turkish cargo firm. Costs and benefits arising from RFID technology implementation are analyzed to determine the return on investment (ROI) in the feasibility study. ROI for different tag prices is also computed to examine the effect of tag prices on RFID investment.