Evaluation of the Effect of Establishing a Minimum Economic Order Quantity (EOQ) on the Air Force EOQ Item Management System.

摘要

Policy decisions concerning the Air Force economic order quantity (EOQ) item management system affect thousands of items, billions of dollars, and the readiness of the Air Force. This thesis was initiated as a result of a March 1983 Air Force audit Agency report finding potential waste of monies because of deviation from normal procurement cycle periods (PCPs). It evaluates different PCP policies and their affect on several system performance measures for the Air Force consumable item management system. The evaluation was performed using simulation models and actual Air Force item data. The results support the audit report showing increased cost and investment as a result of larger minimum PCPs. In the first year, larger minimum PCP policies require more stock fund dollars to fund inventory growth, approximately $1211M, $1311M, and $1560M for the 3, 6, and 12 month policies respectively. After the inventory reaches its new level the differences in the annual commit dollar requirements between policies becomes insignificant.