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

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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)

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.

Suggested Citation

  • Anthony Vance & Paul Benjamin Lowry & Jeffrey A. Ogden, 2010. "Testing the Potential of RFID to Increase Supply-Chain Agility and to Mitigate the Bullwhip Effect," International Journal of Applied Logistics (IJAL), IGI Global, vol. 1(1), pages 48-66, January.
    • Handle: RePEc:igg:jal000:v:1:y:2010:i:1:p:48-66
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