This article is a survey of the latest technologies, algorithms and state of the art localization techniques that can be used to serve as Internet of Things communication protocol by automating an RFID system. There is a lack of a reliable and up-to-date reference that can help inventory management systems developers and operators to enhance the management system efficiency, maximize the productivity, and minimize the material loss. Several low cost IoT devices and associated technologies, such as Radio Frequency Identification system, are widely used today in several applications, including educational, transportation, animal tracking, inventory object tracking, and so many others. In this paper, we present a survey of the state-of-the-art technologies, algorithms, and techniques used in smart Radio Frequency Identification systems based inventory systems. We first outline the design challenges for RFID-based inventory management systems followed by a comprehensive survey of various RFID technologies, RFID types, and RFID architectures. In addition, the latest researches in the RFID infrastructure and middlewares are evaluated. This includes passive RFID Tags, RFID Antennas, RFID middleware, and the RFID Reader. Finally, the paper presents the advantages and performance issues of different techniques in passive RFID, and investigates the collision and anti-collision algorithms for these types of applications.