Application of PCM to Centrally Managed Items (Pilot Test),

Abstract

The PCM (Penalty Cost Model) is a technique for economically selecting items for physical inventory in anticipation of replenishment. It has been applied to stock points and proved to be of benefit. The report evaluates application of the PCM to Navy centrally managed secondary items. Simulation indicated PCM to be cost effective when compared to the uniform method for generating physical inventories. A pilot study confirmed the simulation. Comparison of PCM to a unique program used at the inventory control point for the same purpose indicated only marginal benefits. Projected benefits do not warrant programming costs to implement PCM at the Navy inventory control points. It is recommended that the unique method be adopted as the standard.

Document Details

Document Type
Technical Report
Publication Date
Dec 30, 1974
Accession Number
ADA003474

Entities

People

  • G. S. Crum

Tags

DTIC Thesaurus Topics

  • Computer Programming
  • Cost Models
  • Costs
  • Inventory
  • Inventory Control
  • Pilot Studies
  • Replenishment
  • Simulations
  • Standards

Readers

  • Logistics and Supply Chain Management.
  • Radio communications and signal processing.
  • Systems Analysis and Design