Warehouse efficiency improvement using RFID in a humanitarian supply chain: Implications for Indian food security system

This paper investigates the impact of RFID adoption in a non-profit supply chain scenario to study the effect of available rate of ordering and shrinkage recovery rate on overall costs at the warehouse level. We model the situation as a Newsvendor problem with the objective to minimize the total expected cost and compare two scenarios with and without RFID for managing the inventory subjected to shrinkage and misplacement. We apply the model to Indian food security system and the results show that, incentive to deploy RFID depends on the deprivation cost, the severity of error and the shrinkage recovery rate.