Incorporating ARIMA forecasting and service-level based replenishment in RFID-enabled supply chain

This paper focuses on the global supply chain of a company in Taiwan (referred to as Company A), which manufactures thin film transistor liquid crystal display (TFT-LCD) products. A simulated experiment is made 640 times, and a comparison of output analysis is also made. In the experiment, the key performance indicators are the total inventory cost, the inventory turnover rate, and the bullwhip effect. Four supply chain replenishment policies, four customer demand forecasting methods, radio frequency identification (RFID) and non-RFID system are the experimental factors and their levels, which generate 16 combinations of the Taguchi experiment. From the result, we find that the RFID-enabled R-SCI ARIMA supply chain model which integrates the (s, Q) replenishment policy based on the ARIMA forecasting method and service level is the best: the total inventory cost has a 35.43% reduction, and the inventory turnover rate has a 61.36% increase, compared with that of the non-RFID SCI ARIMA model.