"EXTRA!" Using the Newsvendor Model to Optimize War Reserve Storage
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Authors
Pak, Minou
Peeples, Joshua L.
Klamo, Joseph T.
Subjects
Inventory Level
Newsvendor Model
Military Cost of Shortage
War Reserve Materiel
Newsvendor Model
Military Cost of Shortage
War Reserve Materiel
Advisors
Date of Issue
2021-10
Date
October 2021
Publisher
Defense Acquisition University
Language
Abstract
The United States Marine Corps (USMC) Installation and Logistics Command requested a study for determining appropriate inventory levels of war reserve materiel to meet future operational needs under surge demands in uncertain environments. This study sought to explore a potential approach by using the common newsvendor model, but modified for a military scenario. The authors' novel version of this core concept considers the purchase and storage costs of an item and proposes an intangible cost function to capture the consequences of a shortage. Further, they show a sample application of the model using a ubiquitous military item-the BA-5590/U battery. The output of the model provides USMC with a new tool to optimize inventory levels of a given item of interest, depending on scenario inputs.
Type
Article
Description
17 USC 105 interim-entered record; under review.
The article of record as published may be found at https://doi.org/10.22594/dau.21-865.28.04
The article of record as published may be found at https://doi.org/10.22594/dau.21-865.28.04
Series/Report No
Department
Organization
Naval Postgraduate School
Identifiers
NPS Report Number
Sponsors
USMC
Installation and Logistics Command, Logistics Plans and Operations
(Maritime and Geo-Prepositioning Programs) (LPO-2)
Funder
Format
27 p.
Citation
Pak, Minou, Joshua L. Peeples, and Joseph T. Klamo. ""EXTRA!" Using the Newsvendor Model to Optimize War Reserve Storage" Defense Acquisition Research Journal: A Publication of the Defense Acquisition University 28.4 (2021).
Distribution Statement
Rights
This publication is a work of the U.S. Government as defined in Title 17, United States Code, Section 101. Copyright protection is not available for this work in the United States.