The Effects of Item Usage Variation on Inventory Stockage Models.
Abstract
Although the USAF maintains accurate records of average usage data for recoverable items, very few historical data are available which record the variations in usage which items may exhibit. These usage variations or variances are necessary inputs to all USAF inventory models. Current USAF practice is not consistent with respect to how these variances are estimated and used in different stockage calculations, e.g., Peacetime Operating Stock (POS) requirements computations, distribution, WRSK/BLSS. The purpose of this research is to determine how possible errors in variance estimates will affect stockage models. A validated F-16 item usage data base and RAND's Dyna-METRIC stockage model were used to explore the effects on inventory investment costs and weapon system readiness and sustainability of errors in estimating item usage variances. It was found that both investment cost and readiness/sustainability were changed significantly when variances were changed. Implications are that the variance inputs to stockage models must be estimated accurately to avoid a misallocation of funds. Also, an accurate prediction of how a given stockage level will support readiness and sustainability depends on accurately determining the variance. This research suggests that the right variance-to-mean must be computed and used.
Document Details
- Document Type
- Technical Report
- Publication Date
- Sep 01, 1982
- Accession Number
- ADA124403
Entities
People
- Gary A. Turner
- Jonathan H. Kutzke
Organizations
- Air Force Institute of Technology