RFID Advantages and Disadvantages Comparison

Table of Content

Address all aspects below for full credit. I’ve added some guidance below that should help if you don’t know how to approach this.

1.How does RFID compare to bar-coding?

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By searching the Internet, summarize the advantages and disadvantages of RFID systems. Did you find any RFID applications for services?

•RFID tags don’t need to be positioned in the line of sight with the scanter but barcodes do •RFID tags can be read at a faster rate than barcodes; as approximately 40 RFID tages can be read at the same time •RFID tags can work within much greater distances; information can be read from a tag at up to 300 ft. •RFID tags are read/write devices where as barcodes are a universal technology •RFID tags contain high levels of security; stores that own a barcode reader can process barcodes from anywhere in the world Disadvantages

•RFID involves assembling and inserting a computerized chip; which is more expensive than barcode scanner •RFID readers struggle picking up information when passing through metal or liquid; barcode scanners are only limited to direct line of sight •Reader collision can mix up two signals and cannot respond to both but barcodes are labor intensive because they must scan individually •Tag collision can occur when numerous tags in the same area respond at the same time but barcodes are more easily damaged •RFID still has two separate chips, which cannot be read b the same machine barcodes can be more easily reproduced or forged

Adaptalift Hyster. (2012, May 1). RFID VS BARCODES: Advantages and disadvantages comparison. Retrieved from http://www.aalhysterforklifts.com.au/index.php/about/blog-post/rfid_vs_barcodes_advantages_and_disadvantages_comparison

Find at least one application for RFID in the service industry (healthcare, beauty salons, higher education, legal services, banking, hotels, etc.). Try Googling “RFID in service industry” or something similar.

•RFID can be used for patient tracking, wait time monitoring, medication authentication an control and surgery asset management. RFID can also be used to monitor hand washing stations for hospitals, manages parking, access control, and document and file tracking. RFID can also be used on what one would think to be simple things like laundry management an waste management. •GAO RFID. (2013). RFID for Healthcare. Retrieved from http://healthcare.gaorfid.com/

2. What is the economic payback in years for this possible RFID adoption? (Hint: There are two benefits that can be quantified – labor savings due to faster scan times and miss-read savings. Annual benefits divided by economic benefits equals’ payback.)

Here is the relevant information below:

Cost of Goods Sold$61,000,000
Average Inventory$14,000,000
Factory Operates260days/year
Employee Annual Salary $55,000
Miss Reads Bar Code %0.020
Miss Reads RFID %0.002
Average Miss Read Cost$4.00Students often convert to hours so No. Items Scanned/Day8,850all 3 factories(23,010,000/3600) = 6392 hours and
6392/2000 = 3.2 people
No. Items Scanned/Yr2,301,000(8,850*260)

Bar Code Scan Time/Item (seconds) = 10

No. Scan Seconds/Yr23,010,000[(10 sec/item)(260)(8850)]

One Full Time Equivalent Employee Time (Hours) per Year =2,000 One Full Time Equivalent Employee Time (Seconds) per Year =7,200,000 (2,000*3600)

Answer this question: What would be the labor savings from the RFID scan time reduction? Here’s how to calculate the answer:
•Assume that RFID scanning is instantaneous, so that the number of scan seconds per year for bar code scanning is eliminated. •Number of bar code scan seconds per year / one full time employee seconds per year = what number? oHint: You should get a number between 1 and 4.

oThis is the number of people who would no longer be needed for scanning. •What dollar amount would be saved by not having to pay these positions any longer? oHint: It’s the number of people no longer needed x $55,000 per person. •This is your labor savings by going with RFID.

Now answer this question: What is the cost savings from the reduction in misreads? Here’s how to calculate the answer:
•Remember that each misread costs the company $4.
•Remember that bar code misreads are .02 x number of items scanned per year. •Assume that RFID misreads would be .002 x the same number of items scanned per year. •What is the difference between the total number of bar code misreads per year and the total number of RFID misreads per year? •Now just multiply this difference by $4.

•This is your cost savings from reduction in misreads.

Now answer this question: What is the total annual cost savings from switching to RFID? Here’s how to calculate:
•Just add the labor cost savings to the misread cost savings. •What is your answer? Hint: Should be between $300,000 and $350,000.

You’re almost there. Answer this question: What is the total cost to implement RFID for all of Bracket’s facilities? •You’re given the costs for readers, tags, and software in the case study. Just add the two given costs together.

Final question: What is the simple payback in years for the investment in RFID at Bracket? •Total cost of RFID investment / total annual cost savings = how many years? •Hint: You should get an answer of somewhere between 2 and 5 years.

3.What are the risks of adopting a new technology too early? Too late? •What would happen if Bracket, a relatively small outfit, adopted a new technology too early; before larger competitors adopted it and ironed out any bugs? •What would happen if Bracket adopted the new technology after most of his competitors adopted it (too late)?

4.What do you recommend Mr. Bracket do in the short- and long-term? Explain your reasoning. •Well? What would YOU do?

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RFID Advantages and Disadvantages Comparison. (2016, Aug 08). Retrieved from


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