Transfer Pricing for Air Force Depot-Level Reparables
Abstract
The Air Force implemented stock funding to manage most depot level reparables (DLRs) in FY 1992. The Air Force Working Capital Fund charges customers-wings and higher-level organizations in major commands and repair activities in air logistics centers-for their purchases of serviceable DLRs, pays customers for the return of items needing repair or replacement, and purchases depot-level repair and replacements. The introduction of stock funding for DLRs gave customer commands responsibility for obtaining budgets to purchase DLR repairs and replacements. These budgets were formerly the responsibility of the Air Force Materiel Command, and DLRs were supplied to customers free of charge. This market-like system is intended to provide incentives for making cost-effective repair decisions at the local level. The establishment of transfer prices for DLRs has increased customer awareness of support system costs, and customers have increased utilization of local repair options to economize on their operations and maintenance funds. However, the influence of DLR prices extends beyond local execution decisions to long-run strategic decisions made by customer commands and the Air Staff.
Document Details
- Document Type
- Technical Report
- Publication Date
- Jan 01, 1998
- Accession Number
- ADA354476
Entities
People
- Glenn A. Gotz
- Laura H. Baldwin
Organizations
- RAND Corporation