Inventory Management System Using RFID and Barcode - A Modeling and Simulation Approach

Inventory management has always been a pressing issue for companies and manufacturers alike. As the size of production expands, manufacturers and companies must calculate the math for optimizing production to meet the needs of the customers while avoiding excessive spending in inventory holding, such as finding out the optimal inventory level and maximizing profit. However, with the current use of Barcode technology in inventory management, many noticed the drawbacks that come with manual labor and the inaccuracy of inventory control due to lack of real-time visibility. Many companies and manufacturers have considered the use of RFID to counter the drawbacks of using Barcode technology for these reasons. In the research paper, we develop models of managing inventory through RFID and Barcode by simulating them in ARENA and comparing them against each other based on customer satisfaction, average inventory level, and total cost with a case study of a supermarket in Ho Chi Minh City. The results show that the RFID model, ran in the span of one year, is more beneficial than Barcode with a decrease in an average inventory level of 13.37%, the total cost is down by 15.7^%, and customer satisfaction is improved by 1.38%. Based on these results, we conclude that inventory management using RFID is suggested to help manufacturers and companies improve their inventory management practices.