A supply allocation and optimization model for the U.S. Marine Corps intermediate supply level
O'Keefe, John C.
Terasawa, Katsuaki L.
Gates, William R.
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As spending cuts for defense intensify, the Marine Corps must try to maximize its readiness with a reduced budget. Replenishment supplies and parts stocked at the U.S. Marine Corps intermediate supply level are currently stocked according to historical usage data and Combat Essentaliity-Critically Codes (CECs). However, this system may not result in maximum readiness. Items with the same CEC may differ in the degree to which they contribute to combat readiness, and historical demand is not necessarily an indicator of item importance. This thesis presents a model which demonstrates a theory for allocating funds for supplies and parts at the intermediate level subject to a budget constraint, based upon weighted essentiality values for inventory items. Analysis of the model shows that, given a budget reduction, a proportionate allocation policy is the optimal policy to pursue after steady state consumption is reached. The model analysis will also provide a basis for further research into readiness-oriented stockage.
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