Analysis of Criteria for Changing Standard Prices,
Abstract
Under current procedures, a Navy ICP (Inventory Control Point) notifies its customers of changes in repair part prices whenever the difference between the new standard price and the catalog price has an impact of at least $50 on the value of annual demand. Upon completing an inspection of the Navy Electronics Supply Office, the Naval Supply Systems Command Inspector General recently recommended the policy be changed so that a new price is published whenever the difference between the new and published price is 10% or more. Certain costs are incurred each time a notification of a price change is given. A study was performed to determine the most economical policy for making price changes. The current policy was tested varying the $50 impact value from $.01 to $160. The proposed policy was tested varying the 10% change value from 1/5% to 12%. The results indicated that the current policy requiring a $50 impact on the value of annual demand is the most economical. (Modified author abstract)
Document Details
- Document Type
- Technical Report
- Publication Date
- Aug 31, 1973
- Accession Number
- AD0767090
Entities
People
- S. D. Neely
- T. E. Searer