Justifying RFID Technology in Supply Chain: A Real Options Perspective

RFID is a fast emerging technology in supply chain and has a great potential to revolutionize the process of supply chain. Although with enticing benefits, many managers are still dealing with the problem of the justification of RFID due to the significant investment and the great uncertainty. Traditional capital budgeting approach such as ROI or NPV has been commonly used to evaluate the investment in RFID project. While considering the wide scope of application and the embedded options in RFID, the real option approach should also be considered to evaluate the investment of RFID in the Supply Chain.