Abstract: Two supply chains which are led by retailers consisting of one supplier and one retailer are considered in this paper. The study is divided into three situations:two suppliers have not invested in RFID technology, only one supplier invests in RFID technology and two suppliers simultaneously invest in RFID, respectively. The differences in supplier cost structure and compares are considered and investment decisions in the supply chain are analyzed. Because the analytical solution of the model is too complicated, this paper focuses on the impact of the product replacement rate, RFID tag price and inventory availability on the profit of supply chain members through numerical analysis. The results show that the investment decisions of RFID technology in the two supply chains will change due to the difference in cost structure and product replacement rate. When the production cost difference between the two suppliers is obvious and the product competition intensity is relatively flat, the supplier with higher production cost is more willing to invest in RFID technology, while the supplier with lower production cost is reluctant to invest, and two retailers want to use RFID technology, so there will only be one supply chain that decides to invest in RFID technology. If only one supply chain invests in RFID technology, the impact of RFID tag cost on supplier revenue changes due to the cost of the supplier. When the supplier's production cost is high, his revenue decreases with the tag cost. When the supplier's production cost is low, his revenue increases with the tag cost. When the supplier's production cost is in the middle, the revenue rises and then decreases with the tag cost. The impact of inventory availability on supplier profit is similar to the cost of RFID tags.

Key words: supply chain management, RFID technology, inventory inaccuracy, investment decisions