Investigating the Impacts of RFID Application on Supply Chain Dynamics with Chaos Theory

Radio Frequency Identification is regarded as the most cutting edge technology for the optimization of supply chain processes in recent years. Researchers of supply chain management have often suggested that the measurement of RFID benefits is very important. This research investigated how the different levels of a multi-level supply chain dynamically behave under the impacts of RFID application and offer insights into how to manage relevant supply chain factors to eliminate supply chain uncertainty. The study involved the simulation model to characterize the supply chain with the conventional beer distribution model and some modifications. We observed the supply chain dynamics under the influence of various factors: demand pattern, demand information sharing, lead time, and the degree of RFID application through the Lyapunov exponent calculating. Results of this study showed that the adjustment parameters for both inventory and supply line discrepancies, RFID application, and lead time are critical factors to influence the supply chain dynamics. To conclude, this research may be of importance in explaining the effects of RFID application and dynamic relationship between supply chain factors and the effective inventory, as well as in providing supply chain managers with an effective supply chain management and strategy of the investment of RFID technology. Key-Words: Supply chain management; RFID; Chaos theory; Lyapunov exponent; Beer distribution model