The acronym RFID stands for Radio Frequency Identification, a technology used in inventory management to automatically identify and track RFID tags attached to objects. These tags contain embedded microchips that store information, allowing for quick and accurate scanning without the need for direct line-of-sight. RFID technology enhances inventory control by providing real-time data on stock levels, locations, and movement, resulting in increased efficiency and reduced errors in tracking. Consequently, businesses experience improvements in supply chain management, loss prevention, and overall operational effectiveness.