Estimating the ROI on implementation of RFID at the ammunition storage warehouse and the 40th supply depot KVA as a methodology
Jung, Bok Man
Baek, Dong Hwan
Doerr, Kenneth H.
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The purpose of this project is to estimate the Return On Investment (ROI) on implementation of RFID (Radio Frequency Identification) in the Ministry of National Defense (MND) inventory management context by using the KVA (Knowledge Value Added) theory. The MND has not only experienced continuous pressure from the government to reduce costs, but has also tried to improve productivity. To meet this challenge, the MND has tried to adopt various new management techniques and technologies to improve the operational performance, costeffectiveness, and ROI. Accordingly, the authors will use the performance measurement methodology, the KVA approach to estimate the ROI in one of these new technologies, i.e., RFID. The KVA methodology may prove to be a very useful tool for the MND. In particular, this framework will give decision-makers an idea of how an investment in RFID to support a redesigned inventory management process is paying off. The KVA also provides management with a way to help manage costs. This tool can be also applied to other areas in the MND to assess the potential ROI of new techniques and process redesigns before implementing them.
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