Naval Surface Forces Real-Time Reutilization Asset Management Warehouses: a cost-benefit analysis

Abstract

This research examines the NAVAL SURFACE FORCES Real-Time Reutilization Asset Management Warehouse operations, associated costs, and benefits it provides the Navy. Our methodology is to utilize established cost-benefit analysis techniques in order to provide the Navy with information to determine whether the benefits of storing, inventorying and providing free issue parts to customers are worth the costs of operating and maintaining the warehouses. The objective is to focus on total warehouse operating costs and compare these costs to the savings the Navy receives through storing and providing the repair parts. The results can help decision makers determine if the warehouse operations are beneficial as is, should be remodeled to increase benefits, or simply do not cover the associated costs. The research concluded that the warehouses generate an annual cost avoidance of $4 8 million, direct revenue of $5 million, and fill 2,300 high-priority requisitions.