Reference no: EM131806891

A grocery distribution center is considering whether to invest in RFID or bar code technology to track its inventory within the warehouse and truck loading operations. The useful life of the RFID and bar code devices is projected to be 5 years with minimal or zero salvage value. The bar code investment cost is $100,000 and can be expected to save at least $50,000 in product theft and lost items annually. The RFID system is estimated to cost $200,000 and will save $30,000 the first year, with an increase of $15,000 annually after the first year. For a 5% MARR, should the managerinvest in the RFID system or the bar code system? Analyze incrementally using rate of return. Contributed by Oliver Hedgepeth, University of Alaska Anchorage.