A study of independence between supply echelons

Abstract

The Ships Supply Support Study, a study of supply support to the ships of the United States Navy under the direction of the Chief of Naval Operations, assumes that the availability of an item at a given echelon is independent of its availability at other echelons. A study of the validity of that critical assumption is made. A model of a multi-echelon supply support system which provides a history of the daily status of each entity in the system and a stock profile at each echelon is developed. Using randomly generated demands and current replenishment rules for a representative number of items generated at representative activities at each echelon, gross supply availabilities and conditional availabilities are calculated, and statistical tests of the assumption are made. Mean supply response times are computed using both the gross supply availabilities and the conditional availabilities to illustrate the impact of dependence among echelons. The tests indicate that the availability of an item at a given echelon can in many cases be strongly dependent on its availability at the other echelons. When this is so, the cost in terms of an increase in mean supply response time can be substantial. However, the independence hypothesis is not rejected whenever the gross supply availabilities throughout the system are either very nearly unity or zero. (Author)