Pricing and Allocation of Retail Space with One RFID Enabled Supplier and One Non-RFID Enabled Supplier

We consider a retailer who has two suppliers: one who is RFID enabled and another who is not. Assuming vendor managed inventory (VMI), we address the problem of allocation and pricing of the retail shelf-space. Modeling the problem as a Stackelberg game where the retailer is the leader, we observe that RFID technology provides a competitive advantage for the RFID enabled supplier. Further, we observe that high product substitutability, high demand uncertainty, low tag prices, and low restocking costs result in a more favorable environment for the RFID enabled supplier