A comparison of an alternative inventory control concept with the Navy's existing wholesale inventory control procedures for repairables

Abstract

The Director of Planning and Operation Research Department, Naval Inventory Control Point (NAVICP) Code M041, requested a study to compare the performance of two sets of inventory control procedures for managing high-cost repairable items. One of these sets is embedded in the Navy's existing wholesale inventory control system. The procedures of this set characterize a periodic review process, which calculates four decision variables in order to manage Navy inventories. These variables represent how much to order, how much to repair, when to order, and when to repair. The other set of procedures are adapted from a commercial software package called Bandwidth Management developed by Stewart- Frazier Tools Inc. Two versions of these latter procedures are modeled in this thesis. These procedures characterize a periodic review process, which calculates three decision variables. These variables represent how much to deliver, how much to repair, and when to repair. This thesis uses simulation to model the two sets of procedures and to compare their performance with respect to three formal measures of effectiveness adopted by NAVICP: Supply Material Availability (SMA), Average Delay for a Delayed Requisition (ADDR), and Average Monthly Investment Level (AMIL). The comparison results of the thesis indicate that the existing Navy inventory procedures generate better performance in all three formal measures of effectiveness.