A real options approach to strategic RFID investment decision

Xiaodan Wu; Dianmin Yue; Junbo Bai; Chao Hsien Chu

doi:10.1109/RFID.2009.4911201

A real options approach to strategic RFID investment decision

Xiaodan Wu, Dianmin Yue, Junbo Bai, Chao Hsien Chu

College of Information Sciences and Technology

Research output: Chapter in Book/Report/Conference proceeding › Conference contribution

7 Scopus citations

Abstract

One major roadblock for RFID adoption is to justify its return on investment. Most researchers used cost/benefit analysis, discount cash flow, or net present value method to support the decision; however, these methods does not consider uncertainties and lack flexibility when valuate the investment in RFID. In this paper, we examine the uncertainties and risks associated with RFID investment and propose the use of real options approach to consider them. We demonstrate how can a real options method be used and suggest a process for making strategic RFID investment decision. The results were evidenced and supplemented with a sensitivity analysis.

Original language	English (US)
Title of host publication	2009 IEEE International Conference on RFID, RFID 2009
Pages	314-321
Number of pages	8
DOIs	https://doi.org/10.1109/RFID.2009.4911201
State	Published - Sep 25 2009
Event	2009 IEEE International Conference on RFID, RFID 2009 - Orlando, FL, United States Duration: Apr 27 2009 → Apr 28 2009

Other

Other	2009 IEEE International Conference on RFID, RFID 2009
Country/Territory	United States
City	Orlando, FL
Period	4/27/09 → 4/28/09

All Science Journal Classification (ASJC) codes

Computer Networks and Communications
Information Systems
Electrical and Electronic Engineering

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10.1109/RFID.2009.4911201

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title = "A real options approach to strategic RFID investment decision",

abstract = "One major roadblock for RFID adoption is to justify its return on investment. Most researchers used cost/benefit analysis, discount cash flow, or net present value method to support the decision; however, these methods does not consider uncertainties and lack flexibility when valuate the investment in RFID. In this paper, we examine the uncertainties and risks associated with RFID investment and propose the use of real options approach to consider them. We demonstrate how can a real options method be used and suggest a process for making strategic RFID investment decision. The results were evidenced and supplemented with a sensitivity analysis.",

author = "Xiaodan Wu and Dianmin Yue and Junbo Bai and Chu, {Chao Hsien}",

year = "2009",

month = sep,

day = "25",

doi = "10.1109/RFID.2009.4911201",

language = "English (US)",

isbn = "9781424433384",

pages = "314--321",

booktitle = "2009 IEEE International Conference on RFID, RFID 2009",

note = "2009 IEEE International Conference on RFID, RFID 2009 ; Conference date: 27-04-2009 Through 28-04-2009",

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T1 - A real options approach to strategic RFID investment decision

AU - Wu, Xiaodan

AU - Yue, Dianmin

AU - Bai, Junbo

AU - Chu, Chao Hsien

PY - 2009/9/25

Y1 - 2009/9/25

N2 - One major roadblock for RFID adoption is to justify its return on investment. Most researchers used cost/benefit analysis, discount cash flow, or net present value method to support the decision; however, these methods does not consider uncertainties and lack flexibility when valuate the investment in RFID. In this paper, we examine the uncertainties and risks associated with RFID investment and propose the use of real options approach to consider them. We demonstrate how can a real options method be used and suggest a process for making strategic RFID investment decision. The results were evidenced and supplemented with a sensitivity analysis.

AB - One major roadblock for RFID adoption is to justify its return on investment. Most researchers used cost/benefit analysis, discount cash flow, or net present value method to support the decision; however, these methods does not consider uncertainties and lack flexibility when valuate the investment in RFID. In this paper, we examine the uncertainties and risks associated with RFID investment and propose the use of real options approach to consider them. We demonstrate how can a real options method be used and suggest a process for making strategic RFID investment decision. The results were evidenced and supplemented with a sensitivity analysis.

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U2 - 10.1109/RFID.2009.4911201

DO - 10.1109/RFID.2009.4911201

M3 - Conference contribution

AN - SCOPUS:70349286556

SN - 9781424433384

SP - 314

EP - 321

BT - 2009 IEEE International Conference on RFID, RFID 2009

T2 - 2009 IEEE International Conference on RFID, RFID 2009

Y2 - 27 April 2009 through 28 April 2009

ER -

A real options approach to strategic RFID investment decision

Abstract

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All Science Journal Classification (ASJC) codes

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