## 4 Analysis of the Economic Effect  
To analyze the economic effect of the RFID system developed in this study, the major benefits were determined through interviews with the managers of production management departments. The benefits included (1) prevention of sequencing errors; (2) prevention of the shortage of certain specification parts; and (3) reduction of the labor costs incurred for checking sequencing errors. In particular, the cost incurred by the shutdown of the production line because of sequencing errors can be calculated by the following two methods. * Direct shutdown cost estimation estimates a direct opportunity cost incurred by the shutdown. The dominant cost factor is the labor cost of about 120 workers deployed to the pertinent automobile body production line, and the official shutdown cost defined by the OEM is $370 per minute.
* Comprehensive shutdown cost estimation refers to the comprehensive cost estimation that includes the loss of sales opportunities. This cost estimation method is generally used in production environments in North American regions.  
The cost-saving effects were estimated according to the above two methods. A detailed description of the analysis is presented in Tables 2 and 3, which summarize the results of calculating the annual cost-saving effect with the direct shutdown cost estimation and comprehensive cost estimation methods, respectively. We applied two scenarios to each cost estimation method. In the first scenario, five shutdowns occur annually, and the inventory is reduced by 10%; in the second scenario, seven shutdowns occur annually, and the inventory is reduced by 20%. The analysis results showed that when the system was applied to three parts (instrumental panel, seats, and rear axles) at three plants, the annual cost saving amounted to $14.1 million and $19.5 million for the first and second scenarios, respectively, according to the comprehensive shutdown cost estimation. Figure 12: The sequence-checking algorithm. \begin{table}
\begin{tabular}{l l l l l} \hline \hline  & \multicolumn{2}{l}{**Stretched Scenario**} & \multicolumn{2}{l}{**Conservative Scenario**} \\ \hline
**Category** & **Reasoning** & **Amount** & **Reasoning** & **Amount** \\ \hline \multirow{3}{*}{(1) Annual shutdown cost saving} & 7 time/year \(\times\) 30 min & \multirow{3}{*}{$77,700} & 5 time/year \(\times\) 30 min & \multirow{3}{*}{$55,500} \\  & \(\times\) \$370 & & \(\times\) \$370 & \\  & shutdown-cost/min & & shutdown-cost/min & \\ \hline \multirow{3}{*}{(2) Annual labour cost saving} & \multirow{3}{*}{$532,500} \\  & & & & \\ \cline{1-1}  & & & \\ \cline{1-1}  & & & \\ \cline{1-1}  & & & \\ \cline{1-1}  & & & \\ \cline{1-1}  & & & \\ \cline{1-1}  & & & \\ \hline \multirow{3}{*}{(3) Annual inventory saving} & \multirow{3}{*}{$532,500} \\  & & & & \\ \cline{1-1}  & & & \\ \cline{1-1}  & & & \\ \cline{1-1}  & & & \\ \cline{1-1}  & & & \\ \cline{1-1}  & & & \\ \hline \multirow{3}{*}{(2-2) Data collection} & \multirow{3}{*}{$532,500} \\  & & & & \\ \cline{1-1}  & & & \\ \cline{1-1}  & & & \\ \cline{1-1}  & & & \\ \cline{1-1}  & & & \\ \cline{1-1}  & & & \\ \hline \multirow{3}{*}{(4) Annual cost saving for rear axles only} & \multirow{3}{*}{$5147,380} & \multirow{3}{*}{$5122,840} \\  & & & & \\ \cline{1-1}  & & & \\ \cline{1-1}  & & & \\ \cline{1-1}  & & & \\ \hline \multirow{3}{*}{(5) Case-1: three assembly line items (instrumental panel, seats, and rear axles)} & \multirow{3}{*}{$5442,140} & \multirow{3}{*}{$5368,520} \\ \cline{1-1}  & & & \\ \cline{1-1}  & & & \\ \cline{1-1}  & & & \\ \cline{1-1}  & & & \\ \hline \multirow{3}{*}{(6) Case-2: three plants} & \multirow{3}{*}{$51,326,420} & \multirow{3}{*}{$51,105,560} \\ \end{tabular}
\end{table} 
Table 2: Direct shutdown cost estimation (unit $: USD).