The Effect of Violations of the Constant Demand Assumption on the Defense Logistic Agency Requirements Model
AIR FORCE INST OF TECH WRIGHT-PATTERSONAFB OH SCHOOL OF LOGISTICS AND ACQUISITION MANAGEMENT
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This project determined the impact of stationary but noncontinuous demand levied in a multi-echelon system. Specifically discussed is how this lumpy demand affected the Defense Logistics Agency, Defense Electronics Supply Center in its computed inventory levels and total variable costs. To determine the impact of lumpy demand, data was extracted from the Defense Logistics Agency, Defense Electronics Supply Center Dayton, Ohio. Based on patterns of demand and distributions, the authors constructed a SLAM 2 model that depicted lumpy orders being received at the Defense Logistics Agency. The SLAM 2 model was constructed for the proposed system and simulation runs were conducted using demand distributions gathered from the sample data set. These runs indicate that lumpy demand does impact negatively total variable cost and on-hand inventory levels. It is recommended the Defense Logistics Agency consider other lot sizing techniques or look into a Distribution Resource Planning model to improve overall system inventory levels and total variable costs. Defense Logistics Agency, Economic order quantity, Lot sizing, Lumpy demand, Inventory management, Logistics planning, Consumables, Multi-Echclon.
- Logistics, Military Facilities and Supplies