EOQ (Economic Order Quantity) Range Model,
Abstract
In compliance with DOD Instruction 4140.45, the Air Force implemented range model in December 1981 that was based on economics. This economic range model determines what items to stock at base level, by comparing the cost to stock the item to the cost to not stock the item. The item is stocked if it is economical. In this report we determine the: (a) Performance of the current range model, (b) Sensitivity of the range model to cost, item, and other factors, and (c) Operational, stockage, and cost performance of an alternative method of determining the range of stock for base level. We measured the performance of the current range model and found we had increased the number of line items we stock, but we have not increased the unit issue effectiveness. We also found General Support Division items with large lot sizes and high unit prices have a lower likelihood of stocking with the current range model than they did before the model was implemented. The reason the unit issue effectiveness is low is because the current range model is a customer model; it favors individual customers rather than satisfying the quantity of individual items all customers--large and small--request.
Document Details
- Document Type
- Technical Report
- Publication Date
- Jan 01, 1985
- Accession Number
- ADA153709
Entities
People
- D. J. Blazer
- M. P. Ham
- William Faulkner