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Information 2018, 9(2), 40; https://doi.org/10.3390/info9020040

Mean-Variance Analysis of Retailers Deploying RFID-Enabled Smart Shelves

1
Academy of Chinese Energy Strategy, China University of Petroleum-Beijing, 18 Fuxue Road, Changping, Beijing 102200, China
2
School of Economics and Management, Tianjin Chengjian University, 26 Jinjing Road, Xiqing, Tianjin 300384, China
*
Author to whom correspondence should be addressed.
Received: 31 December 2017 / Revised: 4 February 2018 / Accepted: 10 February 2018 / Published: 12 February 2018
(This article belongs to the Section Information Systems)
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Abstract

Radio frequency identification (RFID)-enabled smart shelves have recently attracted enormous attention from both industry and academia. Retailers have an explosion of interest in deploying smart shelves for the automatic ordering and the reduction of inventory inaccuracy. This study explores the retailers’ optimal policy for investing in a smart shelf inventory control system. Since the decision maker’s risk attitude plays an important role in its investment in technology, we therefore specifically consider the retailers’ risk attitude. The risk attitude is measured by the mean-variance analysis. We derive analytical expressions for the benefit of the smart shelf and specify the conditions under which retailers should invest in it. We also show the explicit relationship between the retailer’s risk attitude and his optimal policy. Finally, we conduct a numerical analysis to provide managerial insights for retailers to invest in smart shelves. View Full-Text
Keywords: smart shelves; RFID; mean-variance analysis; inventory inaccuracy; supply chain management smart shelves; RFID; mean-variance analysis; inventory inaccuracy; supply chain management
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This is an open access article distributed under the Creative Commons Attribution License which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited. (CC BY 4.0).

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Zhu, L.; Wang, P.; Xi, S. Mean-Variance Analysis of Retailers Deploying RFID-Enabled Smart Shelves. Information 2018, 9, 40.

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