Assessment of RFID Investment in the Military Logistics Systems through the Life Cycle Cost (LCC) Model

Abstract

Radio Frequency Identification (RFID) is an emerging technology that has been recently used in numerous business and public fields. Most military applications of RFID have focused on logistics systems. Since RFID investment requires high initial cost and its benefits are hard to see in the short term, it needs an appropriate investment decision model. The purpose of this research is to propose a Life Cycle Cost (LCC) model for RFID integration into the Military Logistics System (MLS). The study primarily focuses on the question, whether the cost of integrating and operating the MLS with RFID is worth investing. The results of this study provide a strategic roadmap allowing decision makers to determine if the logistics system considered is a good candidate for RFID technology integration based on the comparison of the LCCs of the current and the RFID integrated MLS. This study also enlightens possible cost parameters and their impacts on the total cost of RFID technology implementation in MLS.