Selecting the Optimum Army Stock Fund Structure
Abstract
The Department of Defense (DoD) Stock funds are working capital (revolving) funds used to finance the stock levels of most consumable and reparable items. These stock funds buy materiel from commercial vendors, and their funds are replenished by sales of materiel to consumers/users or to other stock funds. DoD budget reductions, consolidation of accounting and supply functions across the Services, Army strategic logistics programs, and other initiatives of the Defense Management Report Decisions have prompted the Army to question whether its stock fund structure needs modification. Since we had reviewed the Army stock fund structure in 1987, we were tasked to update our analysis in light of recent events. Stock funds are sometimes characterized as being either vertical or horizontal in their structure. In a vertical structure, all service-managed materiel for both wholesale and retail requirements is managed centrally in the wholesale stock fund; no 'sale' occurs when materiel is transferred between wholesale and retail echelons. In a horizontal structure, Service-managed materiel is in both the wholesale and retail stock funds, the stock funds are managed independently and a sale occurs when materiel moves from the wholesale to the retail echelon. The existing Army stock fund is a horizontal structure organized by major commands, a structure established in 1962.
Document Details
- Document Type
- Technical Report
- Publication Date
- Aug 01, 1991
- Accession Number
- ADA260905
Entities
People
- Cynthia W. Shockley
- Dorothy M. Clark
- Robert W. Parker
- Will H. Horn
Organizations
- LMI