Abstract: Research source of the problem:Inventory misplacement has always been a thorny issue in supply chain management. Despite the recognized potential benefit of RFID, firms in practice do not unanimously adopt it. RFID cost has long been identified as a barrier to RFID adoption. Will the RFID tagging cost still be the key barrier of RFID adoption under competing supply chains?How do supply chains adjust their RFID adoption strategies in response to competition?
Description of the problem:Consider two supply chains i and j(i∈{1,2} and j=3-i), each consisting of one risk-neutral manufacturer i (she) selling a homogeneous product to one risk-neutral exclusive retailer i (him) via wholesale price contract and incurs a constant marginal production cost c_i. We suppose that the supply chain i will only produce and sell product i. The two manufacturers are Stackelberg leaders, and the two retailers, as followers, engage in Cournot competition in a market. We define misplacement rate (1-θ_i)as the ratio of Retailer i's misplaced product to his order quantity. Retailer i's order quantity q_i is associated with two quantities:θ_iq_i, which is available to consumers by Retailer i, and (1-θ_i)q_i, which is unavailable to customers because of the misplacement.
Methods model of research:The process is essentially a Stackelberg game, the manufacturers move first to decide the optimal wholesale prices and then the retailers move sequentially after observing the pricing decision of the manufacturers and decide the optimal production quantities and whether to adopt RFID or not. For the four models, we obtain the profits of the supply chain players by using the economics model.
Problem-solving ideas:In the first stage of the game, the manufacturers simultaneously announce the wholesale prices for their products. In the second stage, the two supply chains simultaneously decides on whether to adopt RFID technology to resolve the misplacement problems. Hence, the two supply chains exist four parallel RFID adoption decision units denoted by {N,Si,Sj,T}. In the third stage, the retailers decide the optimal order quantities to maximize their profits and compete in the market with Nash game.
Research results:Compared to the Scenario N, one supply chain adopting RFID causes negative externality to the other chain. When the RFID cost is low, Scenario T is the equilibrium strategy for the supply chains. When the RFID cost is high, the low misplacement rate supply chain will not adopt RFID, while the other chain will adopt RFID to enhance his competitive power.
The introduction of case data:The data in the article is referenced with former related papers in a portion. Thus, the results of numerical analysis in this paper can reflect the reality better.
Contributions:Our research differs from the literature in that we explicitly model the competing supply chains to study its impacts on RFID adoption. It is shown that the retailers' RFID adoption strategies depend on the competitor's RFID decisions, misplacement rates, and RFID tagging costs.

Key words: competitive supply chains, RFID, inventory misplacement, equilibrium strategies