1

RFID BASED IDENTIFICATION SYSTEM

AProjectReport
Presentedto
TheFacultyoftheDepartmentof
GeneralEngineering
SanJoseStateUniversity



InPartialFulfillment
oftheRequirementsfortheDegree
MasterofScienceinEngineering

By


Akshay Bal
005728580
APRIL 2009


2

Copyright2009
AKSHAYBAL
ALLRIGHTSRESERVED

APPROVEDFORTHEDEPARTMENTOFGENERALENGINEERING

____________________________________________________________
Prof.MorrisJones
DepartmentofElectricalEngineering,
SanJoseStateUniversity

____________________________________________________________
Dr.MelisaBuie
DepartmentofChemical&MaterialsEngineering
SanJoseStateUniversity

____________________________________________________________
Dr.LeonardWesley
DepartmentofComputerEngineering
SanJoseStateUniversity

ABSTRACT
RFID BASED IDENTIFICATION SYSTEM
By
AKSHAYBAL

The innovation in technology today has made our lifestyle much easier and fun. This project
intends to help those people who are blind identify certain paths easily and thus help them
navigate through buildings, using the upcoming technologies that exist in the market today. This
project has a social and economic future for itself. The latest developments in technology such
as Radio Frequency Identification Devices, has prompted me to think of an application which
would be helpful to those who will need it and promises to have a open future to a change in its
design and usage.












5

ACKNOWLEDGEMENTS
IwouldliketothankProfessorMorrisJones,DepartmentofElectricalEngineering,forhisguidance
AndsupportforthisprojectandIwouldalsoliketosincerelythankDr.MelisaBuie,forher
encouragementandherguidanceinaccomplishingourgoal.
IwouldliketothankDr.LeonardWesley,AssociateProfessor,Dept.ofComputerEngineering,
SanJoseStateUniversity,forallhisguidancethroughouttheENGR298/295Bcourse.

AKSHAYBAL

Table of Contents
Contents
1. Introduction.9
1.1. Problem Statement..11
1.2. Design Methodology...12
1.3. Tools Used In Project..13
1.4. Testing the Design14
2. Literature Review15
2.1. Introduction.15
2.2. Literature Survey Analysis..16
2.3. RFID Components Used.18
2.3.1. Reader Tag Communication.19
2.3.2. Antennas Used.20
3.1. Product Description.22
3.1.1. External Interface.23
3.1.3. Design Architecture..24
3.1.4. Antenna Reader Communication..25
3.1.5. Design Specification.27
3.1.6. Implementation.28
4. Economic Analysis29
4.1.1. Introduction..29
4.1.2. Executive Summary..29
4.1.3. Problem Statement.30
4.1.4. Market Size31
4.1.5. Market Analysis.32
4.1.6. Revenue Growth33
4.1.7. Cost of Prototype33
4.1.8. Cost Analysis..36
4.1.9. Initial Capital Requirement.37

7

4.2.1. Potential ustomers.38

4.2.2. Competition..39
4.3. Production Cost Analysis.40
4.4. Breakeven Analysis..46
4.5. Profit and Loss; Exit Strategy..46
4.6 Return of Investment.48
4.7. Organization Chart50
5.1. Project Schedule51
6.1. Future Enhancement .54
7.1. Conclusion.55
8.1. References.56
.
LIST OF TABLES
Table 1: Revenue Growth33
Table 2: Cost of Product...33
Table 3: Fixed Cost..37
Table 4: Product Cost Analysis for 1
st
year..40
Table 5: Product Cost Analysis for 2
nd
year.42
Table 6: Product Cost Analysis for 3
rd
year..43
Table 7: Product Cost Analysis for 4
th
year.44
Table 8: Product cost analysis for 5
th
year45
Table 9: Total cost and revenue model47
Table 10: Number of employee51
Table 11: SWOT Analysis52
LIST OF FIGURES
Figure 1: Tag Reader Communication11
Figure 2: Design Block..12
Figure3: Types of tags13
Figure 4: Antenna reader combination13
Figure 5: Reader Tag antenna setup used.15
8

Figure 6: RFID UHF-HF tag16

Figure 7: UHF Tag17
Figure8: The Braille Code.17
Figure 9: Reader Tag Communication..18
Figure 10: Antenna & Read range19
Figure 11: Basic Block Diagram..21
Figure 12: Tag Antenna Setup..23
Figure 13: Tag Memory Structure24
Figure 14: Antenna reader Interface.25
Figure 15: Serial Communication.26
Figure 16: Hyper terminal26
Figure17: Network Communication.27
Figure18: Total RFID Market .31
Figure19: Market share of RFID products32
Figure 20: Complete Project Module34
Figure 21: US RFID Spending.35
Figure 22: Breakeven Analysis Diagram..46
Figure 23: P & L Diagram47
Figure 24: Return Of Investment.49
Figure 25: Organizational Chart..50
Figure 26: Gantt chart..53
Figure 27: Handheld reader.54







9

1. Introduction

In the recent few years there have been a lot of advancements in the field of RFID. The
applications of the RFID technology have been numerous and the usage of this technology
has lead to many application specific designs and models that are today being used in many
control systems. RFID finds itself being used in many areas of industry today, right from
inventory control to tracking systems. The purpose of this project will be to develop a
design and propose a plan to implement RFID technology that will help the blind people
navigate in buildings. This system will help us to understand and develop a prototype
model which will be used as a system used by people to fulfill their requirements of
navigation and identification. This will bring into the market the application of RFID
technology towards a social cause, which will have its own economic future.











10

Committee Members
Industrial Advisor: Prof Morris J ones
Academic Reader: Prof Melisa Buie
11

1.1. PROBLEM STATEMENT
In the recent few years there have been a lot of advancements in the field of RFID. The
applications of the RFID technology have been numerous and the usage of this technology
has lead to many application specific designs and models that are today being used in many
control systems. RFID finds itself being used in many areas of industry today, right from
inventory control to tracking systems. The purpose of this project will be to develop a
design and propose a plan to implement RFID technology that will help the blind people
navigate in buildings. This system will help us to understand and develop a prototype
model which will be used as a system used by people to fulfill their requirements of
navigation and identification. This will bring into the market the application of RFID
technology towards a social cause, which will have its own economic future.




Figure 1: RFID Reader-Tag communication [Source : RFID J ournal]
12

1.2. Design Methodology

The basic design blocks of the given system are show below. Here we consider the
assembling of different components, and a system level integration with the software that
will help us build and test the model for identification system using RFID technology.




Figure 2: Design Block
13

1.3. Tools used to design the project

The different tool s that we will need for our design are basic components such as a power
supply, a RFID reader which acts as a transceiver which is connected to the antenna and we will
implement the software that will enable the communication with the host computer. We will be
using passive tags as the primary identification devices to be read from antennas which operate
on Ultra high frequencies.

Figure 3: The Different Types of tags Used [1]
There are various products that are used in todays market for the RFID applications. Here we
will be using the tags and the antenna-reader setup to help locate or identify room/structures
inside a given building with the help of the software program we will execute.


Figure 4: The Antenna- reader Combination [1]
14

The Power supply that will be used for the motherboard and the given reader will also be
installed with the given setup
1.5. Testing the Design
After implementing the design and testing the application software, we will develop a test plan
that will test and demonstrate the ability of the system to work in various conditions and
parameters. The testing will be divided into two phases. The preliminary testing is done for the
various components that have been purchased and which will be later assembled. This will be
followed by the installation. The second stage will contain a testing of the software being used
after the installation process is carried out in the design phase of the project. A test plan will be
written to figure out the exact requirements of the given system.











15

2. LITERATURE REVIEW
2.1. Introduction
The RFID has come up as emerging technology which started evolving in World War II [1]. A
RFID system has several components which include tags, antennas and readers. This set up can
be used either in high frequency or ultra high frequency. In 1946, Leon Theremin invented a
tool for the Soviet Union which retransmitted radio waves with some audio information attached
to it[17].Though it was not an identification device it can be considered a predecessor to the
RFID technology. In 1939, The IFF transponder was used by the United Kingdom in 1939
which was then used for identifying planes as an ally plane or enemy plane as early in the 19
th

century in the World War II [17]. The transponder of this kind is still used in todays aircrafts
wherein the transmission and receiving of waves is used. The patent from Mario Cardullos in
1973 which talks about a passive radio transponder attached to a memory was the true ancestor
of modern RFID.[17]




Figure 5: The Reader and Antenna setup used [1]

16

2.2. Literature survey analysis
The Radio Frequency Identification Devices used in todays industry are being used in many
areas that need identification, inventory control and automation. The use of high frequency and
ultra high frequency signals to identify objects which can be considered as tags here, has been
helpful in developing various applications.

Figure 6: RFID UHF and HF tags [1]
Radio frequency range is considered to be about 3 MHz to 300 GHz. This frequency
corresponds to the alternating electrical signals which are used to produce and detect radio
waves.
The high frequency range of frequency ranges from 330 MHz which has a wavelength of 10
100 m and has various applications in shortwave, amateur ratio, etc. The very high frequency of
radio waves consist frequencies in between 30300 MHz with a wavelength of 110 m and are
generally used in FM broadcasting, aviation, broadcast television, etc. The ultra high frequency
or the UHF range of frequency is around 3003000 MHz with a wavelength of 10100 cm used
for Broadcast television, mobile telephones, wireless networking, etc. The super high frequency
radio waves range is from 330 GHz with a wavelength of 110 cm used in Wireless
networking, and satellite links. The extremely high frequency waves range from 30-300 GHz
17

with a wavelength of 110 mm and have applications in radio astronomy, remote sensing and
advanced weapons systems.[17]

Figure 7: UHF Tag [1]
TheconventionalmethodofthecommunicationofblindpeoplehasbeentheBraillesystem,which
helpsthem,readandwriteusingacellmadeupofsixdottedpositionswhicharearrangedina
rectangularshape.In1821,LouisBraille,whowasinParis,France,identifiedthemajorissueswith
communicationprotocolsfortheblindatthatperiodoftime,andthusintroducedtheBraillecode[17].
Thishadbasicallyrevolutionizedthecommunicationsystemforblindpeople.HeretheRFIDbased
identificationsystemwillnotonlyhelppeoplenavigatebutletthemusethesystemwiththeexisting
BraillecodeorwithoutitwhereintheRFIDsystemisthemainguidanceandidentificationdevice.

Figure8:TheBrailleSystem[17]


18

2.3 RFID Components Used

The RFID system that is used here has many components which make the system. This include
ethe RFID reader, which is basically a transmitter and receiver of ultra high frequency radiations
and an antenna which helps transmit this waves. The tag works as the identification system
wherein every object that needs to be identifies is attached with a tag and the control software
helps the given user application.

2.3.1ReaderTagCommunication
The Tag and sends a sting of data to the reader which again will talk with the host computer and
this will help us determine the tag data.

Figure9:ReaderTagCommunication[1]
19

2.3.2.AntennasUsed
The basic types of antennas used can be of two types:
Linear Antenna
Circular Antenna
Here the polarization of the given tags with respect to the radiation of the antennas is an
important parameter to increase the read range of the given tags and thus make the RFID system
more stable and reliable.

Figure10:Antenna&Readrange[1]

20

3.1. PRODUCT DESCRIPTION

The Radio Frequency Identification Device used for identification helps people who are blind to
identify different locations in their path and this application can also be used by people new to a
place who need guidance finding their destination or identifying their current location. The
product here consists of various functional blocks that help us achieve our target goal of
identifying current locations. Here the basic blocks of the given system are as follows
A Radio Frequency Identification Device Reader
A UHF linear/circular antenna
A set of UHF tags
A computer interface for control program
Serial Network Communication Equipment
Reader- Host Interface Software
With the installation of the given system, we can identify the given location with the help of a
tag, which has been related to the current location it is placed in. When the antenna detects the
tag, it corresponds this data to the information in the database to identify the location the tag has
been placed in. This is followed by a conversion of data to sound, thus letting a blind man to
listen and identify the exact location he is presently in. This can be used to identify room
numbers in a building, or identify any possible obstructions in ones path (warnings) or a device
that can help you know your current location.

21

Power
Supply
Graphical
User Inteface
RFID Reader
Antenna Tag

Figure11:BasicBlockDiagramoftheproduct.

22

3.1.1 External interface

The Radio Frequency Identification Device Reader that is used here in the product has to
interface itself to the host computer system to transfer data. This can be done in two ways
Serial Communication
Network Communication
The serial communication mode is used to identify the reader using the reader-host interface
application software. This recognizes the reader and its current settings. The reader-host
interface software listens to data from the reader and helps us interface with the reader. The
reader can be configured using a serial communication before using it in the network mode for
the given application.
The Network communication uses the TCP/IP protocol to communicate with the reader. Here
via the LAN port we can communicate with the reader wherein the data is transferred from the
reader to the host computer and the reader operates as a telnet server. This network
communication can be configured after the serial interface has been achieved. Various
parameters such as baud rate are necessary during the communication period. This can be tested
using a hyper terminal program on your computer. The network communication of the reader is
an important aspect of reader and host computer communication wherein the reader has to be
discovered over the network using the reader-host computer interface software. Once it is
discovered, we can program the reader to send out data to the host computer using the TCP/IP
network communication.[1]


23

3.1.2. Design Architecture

The basic building blocks of the given product are the reader antenna setup and the
communication of the reader-host computer. Here the communication of these devices using the
control software helps us meet the required specification and the expected results. The current
blocks used are as shown in the figure
Tag Antenna Communication
Here the UHF tag is read from the antenna wherei 96 bits of data is transferred to the reader via
the antenna.

Figure12:TagAntennaSetup[1]
The tag memory structure is shown as shown as below for the UHF tag is shown below. This 96
bits of data is shown as a string of tag ID number on the reader-host application software.
24

The basic memory structure of a generation 2 class 1 tag memory structure is defined as follows

Figure13:TagMemoryStructure[1]
3.1.3. Antenna- Reader Communication
The antenna used are operated at 915 MHz range which are in the Ultra High frequency range
and give us a range of approximately 10 feet of range. The antennas are powered by the reader
which has four antenna terminals wherein we use one of the antenna ports for our application.
The reader needs time to configure its factory settings before it starts the antenna- reader
connection to read tag data from the antenna. The range and attenuation are set using the reader
interface.
25

Figure14:TheantennaReadeinterface[1]
3.1.4. Reader to Host Communication
The serial communication has to be established with the reader by the host computer system
using a serial communication cable (RS-232) wherein with the required baud rate and serial
mode setting, we can get the tag data from the serial port to the application software used by the
host computer. The transfer of the tag data can be checked using the reader-host software or
using hyper terminal and establishing a connection through it.
26

Figure15:RS232usedforserialcommunication.[Source:Google,2009]
The hyper terminal is used as a tool to determine if serial communication is obtained in between
the reader and the host computer running the application program.

Figure16:HyperTerminal[Souce:Google,2009]
The network communication is then obtained using an Ethernet connection from the reader to the
host computer wherein after the calibration of the reader via the serial communication we can
27

now transfer data via a network communication protocol, and thus the reader send the given tag
data to the address set by the reader.

Figure 17: The network communication via Ethernet cable.[Source: Google,2009]

The communication of the reader helps us notify the control program in the host computer, the
tag data which then is associated with the location which had been preprogrammed to correspond
with the tag. This control software then associates this location with another software
application which plays out sound to notify the current location to the person using this product.
3.1.5. Design Specifications
The Tag used here belongs to the EPC GEN1 CLASS 2 category wherein it has an operating
frequency of 840-960 MHz range [1]. It has an exceptional range too. It is a passive tag.
The antenna used might be a linear or circular antenna based on the given location setup wherein
the range of the antenna is around 10 feet. The tags can then be read from long distances and
thus this will help reduce collision in between tags.
28

The frequency range of the antenna is from 890-940 MHz and it has a linear gain of 6Dbi with a
beam width 40 degree and the minimum impedance is 50 ohm and it uses a 50 ohm coaxial TNC
reverse polarity TNC connector. [19]
The reader used here has four antenna ports and supports EPC generation 2 protocol and thus
communicating using serial and TCP/IP communication.
3.1.6. Implementation
Here the reader will be powered up and connected to the linear antenna and also the min
computer which acts as a host computer terminal for the programming and interface with the
UHF reader. When the control program is set to run condition, and when the tag is in the range
of the UHF rays of the antenna, it reads the tag and data is sent to the control program using the
reader-computer interface and the reader-antenna setup. This will give us a voice response
wherein the exact location of the given tag posted comes out of the speaker and thus helps in the
identification of objects and navigation.







29

4. ECONOMIC SURVEY
4.1.1. Introduction
RFID technology has seen immense growth in the past few years. After companies like Wal-
Mart have started using RFID based application, the industry has seen some major boost in
research, development and sales. According to a recent study shown on a website, the key
prediction is that the RFID market will grow from $504 million this year to around $3 billion in
2010.[2]
The RFID market was at around $503 million in 2004 and now it is well determined that this
figure will grow immensely due to increase in applications of the RFID technology[2].
Therefore this prediction also states that the Radio frequency identification device technology
will drive the market growth at a rate of 67 percent to more than $3.8 billion in 2011.[19] As
mentioned earlier, the implementation of RFID based systems by Wal-Mart, Tesco, Metro AG
and Target and U.S. Department of Defense, has triggered a rapid growth rate for the RFID
industry.[2]
4.1.2. Executive Summary
The RFID based identification system plans on helping people with blindness navigate
themselves to their destinations. The universities are required to provide access to people with
disabilities to any events held at the university [13]. This requires handing out Braille code and
providing escort service to the visually impaired. This product will work as a better solution in
these situations. The costumers for this product will be the universities, public buildings and
private purchases. As this is a new product there is an open market out there to explore. With
the help of the various suppliers and competitors in the future, we will be able to start building
30

profits on a wide scale. The product will be produced in a four stage process wherein the first
stage will include Research and development, the second stage is engineering evaluation and
prototype, the third stage is beta test site implementation and preproduction, followed by full
production to meet the requirements. The company will start its first stage in 2010, wherein the
first quarter will be for research and development, and this will require around $ 137,000 and an
initial investment from potential investor. The first year will require an amount of $588,000 and
the total amount of revenue from the beta test site installation will be $60,000. The second year
will start with the full scale production of 90 units for each quarter and thus the total cost
required will be $1148000 to produce these quantities. The total revenue will be $1,800,000 and
this is the point wherein the company starts to get more revenue than the total cost of production.
The third and fourth year will see a reduction in manufacturing costs and increase in the number
of products produced and thus the total cost would come to $1516000 and the total revenue
coming in would be $2400000. The fifth year shows a reduction in production cost and the total
cost would be $1116000 and the total revenue will be $1884000. The breakeven graph is plotted
and the Return of investment is considered wherein an exit strategy and Profit and Loss analysis
help us determine the exact economic feasibility of this project. The SWOT analysis wherein
the strength, weakness, opportunity and threats related to the product survival in the present
market and the future is forecasted.
4.1.3. Problem Statement
The need for a navigation system which will help blind people identify potential obstructions and
identify their current location will make a person independent to navigate himself though the
given path. The American Disability Act needs the university to provide people with disability
access to the various programs and events at the university [18]. Generally brialle handout for
31

the blind people are given out, or escorts needs to be present for guiding blind people. As many
buildings have a social obligation to provide various types of accessibilities to the people with
disabilities, this product will surely be a major help in achieving that goal. Even if any person
needs to identify their location in a new place, then it is a major help to use this product. This
will help the blind identify and navigate and people identify the unknown locations they may be
in.

4.1.3. A.Solution and Market Proposition
The RFID market as it grows will give us the ability to develop our product with enhanced
custom designs wherein the system will include both a portable hand held reader or a moving
vehicle mounted with an identification system. This will help the people with disability identify
their location in a building or any other person navigates through an unknown area. This will
help reduce cost for the buildings which may have to hire additional help to navigate the people
around a building. This will be a self reliable portable device which can be used by anyone.
4.1.4. Market Share
The United States has a large share in the regional RFID market. The total share of the market is
about 88.3 percent which comes around $124.6 million.[8] Though its share is predicted to
reduce
in the given coming years, there is large growth in the market which is driven by new
implementation of the technology and increase in the number of companies that are using the
RFID technology such as Wal-Mart and various sectors of the industry wherein we can consider
supply chain as one of the biggest markets for RFID [19]
32

Figure 18: Total RFID Market 2004-2010 in Mio. US Dollars[8]
4.1.5. Market Analysis
The given system will be used as an identifier system for the blind in a given building. After a
test of the prototype model, we can focus on various markets that would include hotels, business
building and tourist places where a system for navigation and identification for the blind people
can be used, and thus this would turn into an economic profit turnover for the company as these
are unexplored markets for the given product. The potential markets will include the educational
institutions such as university and school and public building needing resources to help the
visually impaired people. The RFID market share is huge and we plan to acquire 0.05% of the
total market at the end of ten years.
33

Figure 19: Market share of RFID products[8]


4.1.6. Revenue Growth
The market of RFID products include readers, antennas and software that are used in the given
system. A generalized study of the given market is shown below

34

Source: ABI Research
Table 1: Revenue Growth

4.1.7. Cost of single system produced (Prototype Model)
We will be using a reader and tag that will be used to install the system in a given building. A
price quote for the prototype of the given model is as shown
Power Supply $200
Motherboard $300 ( With Memory)
GUI $170
Reader $2000
Antennas $200
Tags $100
Table 2: Cost of product prototype

The cost of the product will eventually reduce as more units are produced.
35

Power
Supply
Graphical
User Inteface
RFID Reader
Antenna Tag

Figure 20: The complete product module


The basic Spending for the RFID products in the US in 2002- 2008 has seen an increase as
shown below[2]
36

Figure 21: US RFID spending[2]



4.1.8. Cost Analysis
The total cost of the product here is divided into fixed and variable cost. The cost here can be
considered as the total money spent during the designing and development of the product.
37

Fixed Cost: When the product is in the development stage, the amount spent on the product is
known as the fixed cost. Here it does not vary with the units produced which might be a few or
hundreds.
Variable Cost: This varies with time and the value depends on the number of units designed
and thus varies with the time duration which can include marketing costs too.

Table 3: Fixed Costs
38

4.1.9. Initial Capital Requirements

The initial investment for the acquisition and assembling of the RFID based navigation system
will come through personal founds of the management (who will be rewarded shares in the
company), potential investors, and money coming in after the first beta site installation.
The cost of research and development of the product will take up around two quarters and the
prototype will have been developed by the third quarter. The initial cost of the prototype will be
around $2000 and the beta test site installation will have to pay around $4000 for installation and
free servicing for 2 years. The cost will be reduced as funds come in and the more research and
development will make the product more reliable.
4.2. Potential customers
The potential customer for us from the beginning of this project has been educational
institutions. The Schools and universities will be the main potential customers. Once the
prototypes are installed at beta sites and fine tuned to 100% efficiency in school
buildings, we will expand our market share to other areas of interests which might
include public buildings can be used by many public building wherein people could use
the product as a navigation system. The area for exploration is vast and the investment
required to venture into new markets will depend on the initial return and profits of this
company. Here the hotel industry can also be potential customers showcasing the product
as an additional feature to their existing services.
School and Colleges
Public buildings
39

Private purchases
Hotels
Apartment and Homes


4.2.1. Competition
As this is a new product in development, as a company we do not see real competition
from any other company in the market right now. The only competition my company
will get is from any existing companies that might come up with future navigation system
product. But the major players in the RFID markets are
Alien Technology
Texas Instruments
Impingi
GED
Intermac



40

4.3. PRODUCTION COST ANALYSIS

The fixed cost to produce a single prototype of the product in the first four quarters will be
$3000. The product will be built as a prototype, and then installed at the beta test sites wherein
they will be charged $4000 for the given product and services. Here around 30 units will be
produced in the end of the the fourth quarter, and each unit sold at $4000 as a marketing strategy.

EXPENSES Q1of2010(R
andD)
Q2of2010(
prototype)
Q3of2010
(Pre
Production)
Q4of2010
HARDWAREPRODUCT
COST
$20,000 $10,000 $30,000 $90,000
LicenseandPatent $10,000 0 0 0
CEO $13,500 $13,500 $13,500 $13,500
ProductManager $12,000 $12,000 $12,000 $12,000
HardwareEngineer1 $12,000 $12,000 $12,000 $12,000
HardwareEngineer2 $10,500 $10,500 $10,500 $10,500
SoftwareEngineer1 $12,000 $12,000 $12,000 $12,000
SoftwareEngineer2 $10,500 $10,500 $10,500 $10,500
Accounting/Assistant/HR $11,500 $11,500 $11,500 $11,500
OfficeRent/Supplies $20,000 $20,000 $20,000 $20,000
Overheadcost $5,000 $5,000 $5,000 $5,000
TotalAmountper
Quarter
$137,000 $117,000 $137,000 $197,000
Table4:ProductCostAnalysisfor1
st
year
41

The total cost of the expenditure in a given year here is $588,000 and after the Beta Test Site
installation and the first 30 units produced and installed, we obtain revenue of $160,000.
Therefore net initial investment will be $438,000.
Here the first quarter is R&D phase & engineering Evaluation and the second quarter is
Prototype production. The third Quarter is Beta Test Site Installation and the fourth Quarter is
Pre Production
Here, the 10 beta test site installation will be charged $4000 (The selling cost) wherein the
production cost would be $3000 per unit. The 30 units in the preproduction stage need $90000
and sell we would sell them at a price of $4000.
In 2011 we will produce 90 units and the cost of producing each unit will reduce by $3000 to
$2000 in assembling as this is large scale production of the product. Therefore we spend for the
2011 annum =$908,000
The products are sold at $5000 and in 2011 annum the sale of the given products gives us a sum
of $1,800,000 and the product manufacturing cost would be $1148000. The resulting profit will
be $652,000.





42

EXPENSES Q1of2011 Q2of2011 Q3of2011 Q4of2011

HARDWAREPRODUCT
COST
$180,000 $180,000 $180,000 $180,000
LicenseandPatent $0 0 0 0
CEO $13,500 $13,500 $13,500 $13,500
ProductManager $12,000 $12,300 $12,300 $12,300
HardwareEngineer1 $12,000 $12,000 $12,000 $12,000
HardwareEngineer2 $10,500 $10,500 $10,500 $10,500
SoftwareEngineer1 $12,000 $12,000 $12,000 $12,000
SoftwareEngineer2 $10,500 $10,500 $10,500 $10,500
Accounting/Assistant/HR $11500 $11700 $11700 $11700
OfficeRent/Supplies $20,000 $20,000 $20,000 $20,000
Overheadcost $5,000 $5,000 $5,000 $5,000
TotalAmountper
Quarter
$287,000 $287,000 $287,000 $287,000
Table5:Productcostanalysisfor2
nd
year


In the third year running, we will be spending $1516000 and getting back revenue of $2400000
from the sales. Here the net profit margin will be $884000. This is the period when we can
expect a return of investment period to begin. Here to produce 120 per quarter- products are sold
at the cost of $2000 and sold at $5000. We will also hire a Chief Technical Officer and a
Operations manager to meet our increasing need of management.
43

EXPENSES Q1of2012 Q1of2012 Q3of2012 Q4of2012

HARDWAREPRODUCT
COST
$240,000 $240,000 $240,000 $240,000
LicenseandPatent $0 0 0 0
CEO $13,500 $13,500 $13,500 $13,500
CTO 12,000 12,000 12,000 12,000
ProductManager $12,000 $12,000 $12,000 $12,000
OperationsManager 10,000 10,000 10,000 10,000
HardwareEngineer1 $12,000 $12,000 $12,000 $12,000
HardwareEngineer2 $10,500 $10,500 $10,500 $10,500
SoftwareEngineer1 $12,000 $12,000 $12,000 $12,000
SoftwareEngineer2 $10,500 $10,500 $10,500 $10,500
Accounting/Assistant/HR $11500 $11500 $11500 $11500
OfficeRent/Supplies $20,000 $20,000 $20,000 $20,000
Overheadcost $5,000 $5,000 $5,000 $5,000
TotalAmountper
Quarter
$369,000 $369,000 $369,000 $369,000
Table6:Productcostanalysisfor3
rd
year.Weearn360,000perquarterherewhichwillhelpus
breakeven
0

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In the fourth year running we will have production of 120 units which will be sold per quarter
and will be sold at 5000 per unit.

EXPENSES Q1of2013 Q2of2013 Q3of2013 Q4of2013
HARDWAREPRODUCT
COST
$240,000 $240,000 $240,000 $240,000
LicenseandPatent $0 0 0 0
CEO $13,500 $13,500 $13,500 $13,500
CTO $12000 $12000 $12000 $12000
Operationsmanager $10000 $10000 $10000 $10000
ProductManager $12,000 $12,000 $12,000 $12,000
HardwareEngineer1 $12,000 $12,000 $12,000 $12,000
HardwareEngineer2 $10,500 $10,500 $10,500 $10,500
SoftwareEngineer1 $12,000 $12,000 $12,000 $12,000
SoftwareEngineer2 $10,500 $10,500 $10,500 $10,500
Accounting/Assistant/HR $11500 $11500 $11500 $11500
OfficeRent/Supplies $20,000 $20,000 $20,000 $20,000
Overheadcost $5,000 $5,000 $5,000 $5,000
TotalAmountper
Quarter
$369,000 $369,000 $369,000 $369,000

Table7:ProductCostAnalysisfor4
th
year.
Here we spend $1516000 in each quarter and the revenue from the sales equal $2400000 and the
net profit is $884,000.

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The fifth year in production will see a rise to 150 products every quarter and the cost of
production will have reduced to $1000 and we will sell at $5000 per product.
EXPENSES Q1of2014 Q2of2014 Q4of2014 Q4of2014
HARDWAREPRODUCT
COST
$150,000 $150,000 $150,000 $150,000
LicenseandPatent $0 0 0 0
CEO $13,500 $13,500 $13,500 $13,500
CTO $12000 $12000 $12000 $12000
ProductManager $12,000 $12,000 $12,000 $12,000
OperationsManager $10000 $10000 $10000 $10000
HardwareEngineer1 $12,000 $12,000 $12,000 $12,000
HardwareEngineer2 $10,500 $10,500 $10,500 $10,500
SoftwareEngineer1 $12,000 $12,000 $12,000 $12,000
SoftwareEngineer2 $10,500 $10,500 $10,500 $10,500
Accounting/Assistant/HR $11500 $11700 $11700 $11700
OfficeRent/Supplies $20,000 $20,000 $20,000 $20,000
Overheadcost $5,000 $5,000 $5,000 $5,000
TotalAmountper
Quarter
$279,000 $279,000 $379,000 $379,000
Table8:ProductCostanalysisfor5
th
year
The total product cost will be $1116000 and the revenue from the sales will be $3000000. This
will give us a net profit of $1884000.

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4.4. Breakeven Analysis

The company will be getting in revenue from the first quarter of the second year (2011) to pay
for its own product cost. The initial investment in the first two quarters will show up as profit in
the second year of product production and selling stage. Here a graph describes the breakeven
point of the given product wherein the total cost of the product and revenue are considered.

Figure 22: Breakeven Analysis Diagram.

4.5. Profit and Loss Diagram
The profit and loss diagram helps us show the various fluctuations in the total product cost and
the revenue coming in from the sales, and the associated profit and loss for each year.


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YEAR TotalCost(In
thousands)
TotalRevenue(In
thousands)
2010 $588 $160
2011 $1148 $1800
2012 $1516 $2400
2013 $1516 $2400
2014 $1116 $3000
Table9:TotalCostandrevenuetable.

The total cost of the product including installation, along with the total revenue gives us an
indication of the profit or loss of the company. Here as shown in the figure, profits are made
during the second year in business wherein full production is acquired.

Figure23:P&LDiagram
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4.6. Return of Investment
The return of investment lets us know if the company is economically viable in the future and its
an indication of profits.
For our given company let us consider the first five years of the company
ROI=(Total Revenue-Total cost) / Total Cost
Here , once the company gets more profits, as an exit strategy it can plan for merging with the
large players in RFID market today such as Alien Technology and Texas Instruments. We will
need $ 875,000 to reach the breakeven stage in the product development and selling.
YEAR TotalCost(In
thousands)
TotalRevenue(In
thousands)
ROI(Percentage)
2010 $588 $160 0.72(*100)
2011 $1148 $1800 0.56(*100)
2012 $1516 $2400 0.58(*100)
2013 $1516 $2400 0.58(*100)
2014 $1116 $3000 1.68(*100)

Table10:ReturnofInvestmenttable.
With an investment of $1576000 over the 5 years and a revenue payback of $2752000, we have
an ROI of 74.62% for the 5 year period.




49

50

4.7. Organizational Chart

The production of the given system after a test of the prototype will require an organizational
structure as shown below


Figure 25: Organizational Chart




51

The company will consist of 10 employees. As this is a startup company, we will hire skilled
engineers with experience and would expand our company in the future by hiring interns and co-
ops. Here the basic salaries of the employee are shown as follows in thefollowing table. The
organization of the company explains the chain of command. Shares will be distributed among
employee as a bonus during the development and deployment of the prototype.

Employee Type 2009 2010 2011
CEO 1 1 1
CTO 0 0 1
Hardware Project
Manager
0 1 1
Software Project
Manager
0 0 1
Operations Manager 0 1 1
HR/Accounting
Manager
1 1 1
Hardware Engineer 2 2 2
Software Engineer 1 1 1
Firmware Engineer 1 1 1

Table 11 : Number of employees.

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4.8. SWOT ANALYSIS

The SWOT analysis gives out the strengths, weaknesses and the opportunities that the product
might face in the future. It also considers the threats that may hamper its progress. For the given
product the SWOT analysis is shown as follows:

Strengths
Mobileandhasapracticalapplication
Isreliablewithoptimumcostandperformance
Marketfortheproductisgoodandisanewapplicationina
developingtechnology.
Weakness
Highcostofhardware
New player
Opportunities
Manyapplicationsfornavigation
Advancementintechnologywillincreasestabilityandreducecost

Threat
OtherGPSapplicationsin
futurefornavigation

Table 12 : SWOT Analysis

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5. Project Schedule
The Gantt chart below indicates the progress of the given project and divided the given tasks in
regards to the timelines that will be needed to attain the working model of the given system



Figure26:Ganttchart

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6.1. Future Enhancement

The application of this product to help navigate people around unknown places has a large scope
of development in the field of technology it uses. The RFID based Identification system could
be enhanced in the future to be user friendly wherein speech recognition software can be used to
help people get instructions on the destination they need to reach to.
With the advancement of technology, readers are getting smaller and faster with greater ability to
self program. The future of this product would be a handheld device which is a portable reader
in itself with the control software and this could be the size of your mobile phone and thus can be
carried anywhere, anytime. This will make sure that the person knows where he is all the time
with the help of a simple navigation system which will then help him always when he needs
directions and needs to identify unknown places, or find his way out from a college campus if he
is lost.

Figure27:HandheldReader[8]

55

7.1 .Conclusion
Using the Ultra high frequency radio waves, we are implementing a system which will use the
RFID tag and reader setup along with a customized program that will help the blind identify
structures in a given building and in the near future help them navigate through potential
obstructions. The RFID reader tag set up with the help of the conceptual design of this project
will be implemented thus showing us the possibility of using the RFID technology to help the
blind.















56

8.1. References
[1]Retrieved from Alien Technology on J anuary 29, 2009, http://www.alientechnology.com
[2]Retrieved from RFID journal on February 10, 2009, http://www.rfidjournal.com/

[3]Retrieved from Wikipedia, on February 12, 2009,http://en.wikipedia.org/wiki/RFID

[4]Retrieved from , on March 2, 2009,
http://go.infor.com/library/Infor/INFWP_IREMGEENODD_0107-1_LR.pdf

[5]Retrieved from Information week, on April 14, 2009,
http://www.informationweek.com/news/management/showArticle.jhtml?articleID=51201525

[6]Retrieved from, Webopedia, on J anuary 9, 2009,
http://www.webopedia.com/TERM/R/RFID.html
[7]Retrieved from GED on March 23, 2009, http://pll.gedlm.com/
[8]Retrieved from RFID Reader web portal, on April 22, 2009
http://www.rfidreader.info/index.htm
[9]Retrieved from Motherboards, on March 12, 2009, http://www.motherboards.org/
[10]Retrieved from Tigerdirect on April 12, 2009,
http://www.tigerdirect.com/applications/category/category_tlc.asp?CatId=106&name=
57

[11]Retrieved from Samsung, April 25, 2009

http://www.samsung.com/us/consumer/subtype/subtype.do?group=televisions&type=televis
ions&subtype=lcdtv
[12]Retrieved from AIM Global on February 14, 2009 http:
//www.aimglobal.org/technologies/rfid/
[13]Retrieved from AIMGlobal, December 12, 2008
http://www.aimglobal.org/solutions/RFID_City/RFID_city.asp
[14]Retrieved from E Marketer on March 21,2009, www.emarketer.com
[15]Retrieved from RFID updates, on April 23, 2009
fhttp://www.rfidupdate.com/articles/index.php?id=1014
[16] Retrieved from Wintegreen research on April 25, 2009,
http://www.wintergreenresearch.com/reports/RFID_Final.htm
[17] Retrieved from Wikipedia on J anuary 12, 2009. From www.wikipedia.org
[18] Retrieved from Disability resource Center, San J ose State University on April 14, 2009 from
http://www.drc.sjsu.edu/about/policies_guidelines.htm
[19] Retrieved from RFID journal on April 25, from
http://www.rfidjournal.com/article/articleview/3941/


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