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A Funding Allocation Methodology for War Reserve Secondary Items

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Technical rept.

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Army units must be ready to deploy rapidly in the event of a contingency, which creates challenges for the initial sustainment of deployed units, especially during the first 45 to 60 days or so it takes the first ships to arrive from CONUS. Additionally, when a contingency occurs, the increase in operating tempo leads to higher demands for some items. Because many items have lengthy procurement lead times, the baseline level of inventory will sometimes run out in the face of the higher demand before increased deliveries begin. Moreover, even if the contingency demands for certain items do not increase, these items must be transported to the site of the contingency, which places stress on the defense supply chain and on airlift capacity. Stocks of war reserve secondary items WRSI within Army Prepositioned Stock APS are designed to address the two issues of production surge response time and competition for airlift early in a contingency. However, given the breadth of Army budget priorities, funding for WRSI stocks often falls short of the total calculated requirement, and the Army has lacked a formal method for prioritizing which items to stock. Therefore, as part of an ongoing, formal process for determining WRSI stocks around the world, the Army asked the RAND Arroyo Center to develop techniques to prioritize the use of a 467 million FY 2007 budget for WRSI materiel for a Northeast Asia contingency scenario. RAND provided a quick-turn, 60-day product that 1 used empirical demand data to derive forecasts of the potential contingency demands, 2 determined which items should be forward positioned versus stored in CONUS and delivered via airlift, and 3 allocated the budgeted funding to maximize the WRSI inventory investment value with respect to readiness and reduced strategic airlift early in the contingency.

Subject Categories:

  • Administration and Management
  • Logistics, Military Facilities and Supplies

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