The Application of Quantity Discounts in Army Procurements.

Abstract

The Department of Defense (DOD) has directed the use of basic Economic Order Quantity (EOQ) principles in the acquisition of secondary items. One assumption of the EOQ model is that there is no control over acquisition price; yet, it has been established that the unit price of an item is not always independent of the quantity procured. The approach taken in this study included a review of the Quantity Discount (QD) program as implemented by the Air Force, and the development of a total variable cost equation to evaluate offers in response to a QD solicitation. A QD program in the Army is expected to result in reductions in both acquisition cost and long run administrative workload. A proposed QD program has been developed and it is recommended that a test be conducted at one or more Materiel Readiness Commands to determine the degree of success a full QD program can be expected to accomplish.

Open PDF

Document Details

Document Type
Technical Report
Publication Date
Mar 01, 1979
Accession Number
ADA066583

Entities

People

  • Steven Gajdalo
  • Wayne V. Zabel

Tags

Communities of Interest

  • Human Systems
  • Weapons Technologies

DTIC Thesaurus Topics

  • Acquisition
  • Air Force
  • Army Procurement
  • Computer Programs
  • Contract Administration
  • Contracts
  • Department Of Defense
  • Equations
  • Instructors
  • Inventory
  • Inventory Control
  • Logistics
  • Logistics Management
  • Military Acquisition
  • Observation
  • Procurement
  • Test And Evaluation

Readers

  • Defense Acquisition Program Management
  • Life Cycle Cost Analysis