VALUE OF TIME AND TEMPERATURE HISTORY RFID TECHNOLOGY TO LEVERAGE RETURN ON TRACEABILITY INVESTMENTS
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A threat to the competitiveness of the perishable produce industry is how to maintain product availability without spoilage. Waste is growing and costs an average supermarket approximately $450,000 per year, with perishables accounting for 56% of total store shrink. Spoilage throughout the supply chain is estimated to be as much as 10% of all perishable goods. Most perishable items like greens, meats, or dairy, have non-deterministic, random lifetimes. These random lifetimes depend on the time it takes for products to flow through the supply chain, as well as the product's temperature history and other environmental factors. These factors are generally unknown and highly variable, leading to considerable uncertainty with regard to the timing of product expiration and setting an appropriate sell-by date. The condition of many perishables cannot be ascertained by simple visual inspection. Thus, there is the danger that the product has expired before the sell-by date, and an expired product may be sold to the customer. The results of selling an expired product may range from the cost of a product return and loss of customer goodwill, to health and safety costs, public loss of reputation, and even litigation costs in case of a large-scale health scare. These complications and risks associated with perishable grocery products make effective inventory management challenging. In essence, the inventory control policy needs to balance the cost associated with waste (from throwing away good product), and the cost associated with selling expired product.........