The Effect of the Covariance Factor on the Procurement Problem Variance of Net Leadtime Demand

Abstract

An analysis is made of the formulae used by the Navy's Inventory Control Points in calculating the variance of Net Leadtime Demand of repairable items. A new formula is then derived, which makes use of actual calculations of covariance between regenerations and demands. The resulting variance values derived from the new formula are compared with the variance values resident on the Navy's Ships Parts Control Center data base and are shown to produce lower variances. The new formula is also compared to the option path formula to determine which formula produces the smallest variance. The comparison suggests an under-estimation of variances results when the option path with its estimate of the covariance is used. The thesis concludes with recommendations for implementation of the new formula.

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Document Details

Document Type
Technical Report
Publication Date
Sep 01, 1988
Accession Number
ADA201201

Entities

People

  • Keith T. Adams

Organizations

  • Naval Postgraduate School

Tags

Communities of Interest

  • Energy and Power Technologies
  • Ground and Sea Platforms

DTIC Thesaurus Topics

  • Acquisition
  • Computers
  • Covariance
  • Data Analysis
  • Data Science
  • Data Sets
  • Databases
  • Information Science
  • Inventory Control
  • Mainframe Computers
  • Operations Research
  • Procurement
  • Random Variables
  • Square Roots
  • Statistical Analysis
  • United States
  • Word Processors

Fields of Study

  • Engineering

Readers

  • Logistics and Supply Chain Management.
  • Mathematical Modeling and Probability Theory.
  • Regression Analysis.