Equilibrium strategies for RFID adoption in a supply chain with advance payment financing

This paper studies a two-stage supply chain that consists of a retailer and a manufacturer, who suffers from production capital constrained problem. Based on whether the supply chain invests in RFID technology when the retailer provides an advance payment financing, we accordingly set up the supply chain players' profit models under two scenarios: the supply chain adopts RFID or forgoes RFID. We obtain the players' optimal decision-variables and revenues. Furthermore, we discuss the equilibrium strategies for RFID adoption in the supply chain. We find that the equilibrium strategies for RFID adoption depend on the manufacturers' initial capital and RFID tagging cost. As the manufacturer's initial capital increases, the supply chain partners are more willing to adopt RFID. The supply chain partners tend to adopt(forgo)RFID when the tagging cost is low(high). When the tagging cost is moderate, the RFID equilibrium strategy only depends on the manufacturers' initial capital. © 2020, Editorial Department of CIMS. All right reserved.