Radio-frequency identification (RFID) technology-based real-time indoor location awareness has been widely studied. In this paper, a passive RFID-based indoor inventory localization method for small and medium-sized enterprises (SMEs) is proposed to effectively manage their indoor inventory tracking in terms of the multi-stacking racking (MSR). To achieve this, we introduce a concept of reference tags and a calculation of measurement for the distance between the RFID reader and reference tag to improve the accuracy of the item location recognition. To illustrate the efficacy and applicability of the method, an empirical case study that applies it to an electronic device manufacturing company is conducted. It was noted that there was no significant difference in the location awareness rate of the proposed system compared with the existing active RFID-based methods. Also, it is demonstrated that the construction can be relatively inexpensive in terms of identifying the location of the items loaded in MSR and relatively narrow areas using a passive tag. This advantage makes it suitable for SMEs that have issues with large-scale facility investment, applying the method to compare the location difference between the registered location information in the inventory system and the actual location of the item in the rack.
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