Accession Number:

AD0767090

Title:

Analysis of Criteria for Changing Standard Prices,

Descriptive Note:

Corporate Author:

NAVY FLEET MATERIAL SUPPORT OFFICE MECHANICSBURG PA OPERATIONS ANALYSIS DEPT

Personal Author(s):

Report Date:

1973-08-31

Pagination or Media Count:

23.0

Abstract:

Under current procedures, a Navy ICP Inventory Control Point notifies its customers of changes in repair part prices whenever the difference between the new standard price and the catalog price has an impact of at least 50 on the value of annual demand. Upon completing an inspection of the Navy Electronics Supply Office, the Naval Supply Systems Command Inspector General recently recommended the policy be changed so that a new price is published whenever the difference between the new and published price is 10 or more. Certain costs are incurred each time a notification of a price change is given. A study was performed to determine the most economical policy for making price changes. The current policy was tested varying the 50 impact value from .01 to 160. The proposed policy was tested varying the 10 change value from 15 to 12. The results indicated that the current policy requiring a 50 impact on the value of annual demand is the most economical. Modified author abstract

Subject Categories:

  • Economics and Cost Analysis
  • Logistics, Military Facilities and Supplies

Distribution Statement:

APPROVED FOR PUBLIC RELEASE