A System Approach to Base Stockage of Recoverable Items
Abstract
This is the concluding Memorandum in a series describing a system approach to setting base stock levels on recoverable items. It should be of interest to anyone concerned with the problem of base stockage, whether he be in management or a member of an implementation team. The intent is to provide a readable and concise summary of the work accomplished; consequently, no derivations are included here, since the mathematical foundations have been developed in previous Memoranda. Mathematical results obtained in the previous studies are cited, but it is not necessary that the reader be familiar with those studies. This Memorandum describes a system approach to setting base stock levels on recoverable items, and demonstrates its application. The system approach does not replace the traditional item analysis. It translates to a system viewpoint the implications of item data, including unit cost and repair characteristics. An examination of the sensitivity of the stockage policy to parameter changes indicated that it is sensitive to the item variance-to-mean ratio of the assumed stuttering Poisson demand distribution but insensitive to other parameter changes. A comparison between stock levels computed by using the stockage policy and actual stock levels from an Air Force base indicates that this policy can achieve the same performance at about one-half the investment. A second comparison between the stockage policy and the current AFM 67-1 policy indicates that for comparable performance the investment can be reduced by one-half to three-quarters.
Document Details
- Document Type
- Technical Report
- Publication Date
- Dec 01, 1965
- Accession Number
- ADA596206
Entities
People
- C. C. Sherbrooke
- G. J. Feeney
Organizations
- RAND Corporation