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Navy Supply: Economic Order Quantity and Item Essentiality Need More Consideration.
GENERAL ACCOUNTING OFFICE WASHINGTON DC NATIONAL SECURITY AND INTERNATIONAL A FFAIRS DIV
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This report addresses the economic order quantity and safety level aspects of the requirements determination process for material. The General Accounting Office found that improvements in the process could reduce the potential for increases in stocks beyond current needs and minimize the costs of ordering and holding inventory. The report contains recommendations 31 U.S.C. 720 requires the head of a federal agency to submit a written statement on actions taken on GAO recommendations to the House Committee on Government Operations and the Senate Committee on Governmental Affairs no later than 60 days after the date of the report and to the House and Senate Committees on Appropriations with the agencys first request for appropriations made more than 60 days after the date of the report. The objectives of this GAO report were to evaluate the requirements determination process for replenishment material and to assess those requirement computation factors offering the greatest potential for cost avoidance. This review was performed because the growth of long supply assets in the Navy prompted both the Department of Defense DOD and the Navy Comptroller to cut the Navys wholesale replenishment obligation authority for fiscal years 1986 and 1987. Keywords Lead time level Safety level.
APPROVED FOR PUBLIC RELEASE