Demand Data for Secondary Items
Abstract
In FY 1990, requisitioners sent approximately 27 million orders to DoD's wholesale supply system. DoD and Military Department procedures provide that requisitioners assign demand codes to these orders to indicate whether the requirement is recurring or nonrecurring. Inventory control points accumulate the historical demand data and use it to calculate stockage levels, compute procurement and repair requirements, and develop replenishment budgets. Excessive inventories have been a matter of high level concern in recent years. This has been highlighted by recent Senate hearings and related General Accounting Office reports, as well as Inspector General audit reports, and DoD has a number of initiatives in process to reduce inventories. A contributing factor to excessive inventories is overstatement of requirements in computing quantities to buy. Misclassifying demands as recurring can be a significant factor in overstatement of future requirements. The objectives of the audit were to determine if requisitioners were accurately classifying and reporting demand data for requirements for secondary items, if inventory managers were properly accumulating demand data, and if internal controls over demand data classification and accumulation were effective. Controls over the classification and recording of demand data were inadequate. While most of the demand transactions were accurately processed, some supply data systems were improperly programmed to classify and report nonrecurring requirements as recurring demand. In addition, there were inconsistencies among the Military Departments and Defense Logistics Agency's inventory managers in their use of nonrecurring demand data.
Document Details
- Document Type
- Technical Report
- Publication Date
- Oct 08, 1991
- Accession Number
- ADA378750
Entities
People
- Charles F. Hoeger
- Gordon P. Nielsen
- John B. Patterson
- Shelton R. Young
- Terrance P. Wing
Organizations
- Office of the Inspector General, U.S. Department of Defense