ROI Analysis of RFID-Based Intelligent Inventory Management Systems

Abstract

This paper investigates the return on investment (ROI) of RFID-based intelligent inventory management systems. RFID (Radio Frequency Identification) technology has revolutionized inventory management by providing real-time visibility, improved accuracy, and enhanced operational efficiency. The study employs a mixed-methods approach, integrating both qualitative insights from industry experts and quantitative data from surveys and existing literature. Initial setup costs, ongoing maintenance expenses, and tangible and intangible benefits are thoroughly analyzed. The findings reveal that while the initial investment in RFID technology can be substantial, the benefits in terms of reduced labor costs, minimized inventory shrinkage, and improved inventory accuracy significantly outweigh the costs. ROI calculations, including payback period and net present value (NPV), demonstrate the economic viability of RFID systems. Comparative analysis shows that RFID systems outperform traditional inventory management systems, especially in sectors such as retail and healthcare. This paper provides a comprehensive framework for evaluating the ROI of RFID technology and offers practical recommendations for businesses considering its adoption.