An assessment of the FCIM DSS for the effects of lead time on procurement decisions

Abstract

The development of automated manufacturing technology and the creation of Department of Defense (DoD) RAMP facilities which use this technology has required the development of use of improved decision support software (DSS) products. The new technology has allowed the facilities to reduce procurement lead time in the manufacturing process which now must be factored into the procurement and inventory management of the Navy and the DoD. This thesis examines a DSS product developed by Fleet Material Support Office for the RAMP Project Office which compares competing bids from RAMP sites and private contractors for the manufacture of repair parts. The DSS uses a modified version of the Wilson economic order quantity formula to determine optimum quantities to buy, minimizing the total relevant cost. It will be used to decided between competing bids which may vary is unit price, and delivery schedules. The author concludes that the theory for the calculation of total relevant cost is adequate but that reports generated do not highlight the benefits of reduced lead time and have significant computational errors.