DEFENSE INVENTORY: Applying Commercial Purchasing Practices Should Help Reduce Supply Costs
Abstract
The Department of Defense's (DOD) material inventory is the largest in the world. It includes secondary items (spare parts and operating supplies) that maintain the readiness of the U.S. military's aircraft, ships, tanks, and other complex weapon systems and support the needs of military personnel. Concerned about the high cost of replenishing secondary items, the Ranking Minority Member, Senate Committee on Governmental Affairs, asked GAO to examine the cost considerations underlying DOD's inventory decisions for these items. In response, GAO undertook a two-part effort. The first part resulted in a report that explained how DOD developed and used cost data in making secondary item inventory purchasing and stocking decisions. The second part, which this report addresses, assesses the defense inventory control points use of DODS replenishment formula to compute optimum order quantities for secondary items and discusses the methods by which six private sector companies make their purchase decisions.
Document Details
- Document Type
- Technical Report
- Publication Date
- Aug 01, 1993
- Accession Number
- AD1167874
Entities
People
- Donna M. Heivilin
- George Morse
- Harry E. Jr Taylor
- John J. D'esopo
- Johnnie Phillips
- Tracy Banks
Organizations
- United States Government Accountability Office