A PROPOSAL FOR REDUCING THE COST OF LOGISTICS SUPPORT,
RAND CORP SANTA MONICA CALIF
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Deferral of procurement is distinctly worthwhile for some items. These are, for the most part, expensive spare parts which are few enough to be managed with considerable attention, and also of such a nature that spares consumption is almost certainly sure to be low during the phasing-in of new equipment. The savings indicated may be as high as sixty per cent of the total cost of expensive items under the present supply system, and undoubtedly exceeds thirty per cent of this cost. Since expensive spares consititute more than fifty per cent of the total dollar value of the supply system, the indicated savings are very substantial. The deferred procurement system does not result in a noticeable reduction of the effectiveness of the supply system if deferral is practiced just long enough to collect sufficient data to make a substantially improved forecast of future consumption. In the current study, this period was approximately eighteen months in length.