An Economic Retention Model for Excess Navy Items with Foreign Military Applications
NAVY FLEET MATERIAL SUPPORT OFFICE MECHANICSBURG PA OPERATIONS ANALYSIS DIV
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There is a current moratorium on disposal of all excess Navy material with application to Foreign GovernmentFG weapons systems. The material is being held in anticipation of future sales to FGs. Material holding costs preclude holding the material indefinitely. The purpose of this report is to present a mathematical model for computing the optimal amount of excess material to be held under economic criteria. The model was designed to provide management with a tool for computing the level of assets to hold in retention to maximize the financial return to the Navy through future sales to FGs. The model was also intended to be flexible in that input parameters may be varied and output solution values may be overridden to reflect management policy. It is anticipated that substantial financial savings will accrue through implementation of the model. The model will reduce material holding costs and free financial resources through liquidation disposal of assets with either no reasonable expectation of demand or no economic justification for retention.
- Economics and Cost Analysis
- Logistics, Military Facilities and Supplies