Application of PCM to Centrally Managed Items (Pilot Test),
NAVY FLEET MATERIAL SUPPORT OFFICE MECHANICSBURG PA OPERATIONS ANALYSIS DEPT
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The PCM Penalty Cost Model is a technique for economically selecting items for physical inventory in anticipation of replenishment. It has been applied to stock points and proved to be of benefit. The report evaluates application of the PCM to Navy centrally managed secondary items. Simulation indicated PCM to be cost effective when compared to the uniform method for generating physical inventories. A pilot study confirmed the simulation. Comparison of PCM to a unique program used at the inventory control point for the same purpose indicated only marginal benefits. Projected benefits do not warrant programming costs to implement PCM at the Navy inventory control points. It is recommended that the unique method be adopted as the standard.
- Logistics, Military Facilities and Supplies