COST BENEFIT ANALYSIS

Cost Benefit Analysis

Cost Benefit Analysis

With regard to the scenario RFID The decision to deploy RFID technology in a company is a business and not a technology decision. For this reason it is vital that the decision to implement RFID be justifiable in terms of its economic value to the company. A cost-benefit analysis can assist a company in analyzing the impact of an RFID deployment on its business and activities. It is critical to this decision-making that a company take an enterprise-wide view since every decision taken will impact future deployments and the net ROI.

The most of the cost for benchmark sponges was associated to operating-room time essential for doctors to manually enumerate the sponges. For RFID sponges, the biggest cost constituent was for buying costs. Overall, the incremental cost effectiveness ratio equaled $41,704. The quality-adjusted life-years (QALYs) profited with RFID sponges was associated to improvements in death and value of life for those patients who were released dwelling with a kept sponge.

Conclusion

Such a scenario requires that the two tags operate at different core frequencies yet share the data. Add to this scenario a passive system which also must be operating simultaneously and you will have complete chaos unless the Enterprise's requirements were scooped during the ROI-benefit analysis phase. This is a critical consideration even if the full deployment is a 10-year project. In fact, many of these process changes cannot be accounted for upfront. If the benefits are labor-saving, then the operators themselves will find ways to use the technology to the future process change, making their tasking less intensive and faster. Based on the results of this type of analysis, the company may then structure its project to capture immediate, short-term benefits first, and later on modify the scope of the project to reap the long-term benefits. (Frank Mayors 2004)

Many factors contribute to calculating RFID costs and benefits. In terms of costs, they can be either fixed, such as investment in new tools or processes, or recurring, such as the cost of the tags and costs associated with applying them and establishing the benefits of data harvesting. As for the benefits, they can be direct, such as reduction in labor cost and shrinkage, or indirect, such as improved customer service or increased In-Transit Visibility (ITV). Now let's look at what types of benefits a company should expect and how various components of an RFID deployment can ...