COMPARING NAVAL-INVENTORY FILL RATES FROM COMPOSITE AND REPAIR-AND-PROCURE SUPPLY SYSTEMS THROUGH DISCRETE EVENT SIMULATION

Abstract

Naval Supply Systems Command Weapon Systems Support currently uses Distributed Requirement Planning (DRP) to generate repair and procurement quantity recommendations for Supply Class IX repair parts. In an effort to provide an optimization-based method for making wholesale inventory decisions, a mixed integer linear optimization program termed Wholesale Inventory Optimization Model (WIOM) was developed as an alternative to existing tools. In its current form, however, WIOM does not explicitly consider the repair cycle for those national item identification numbers that may be either procured or repaired.

The thesis develops a next-event, discrete-event inventory simulation model, which we term Comparative Replenishment Stream Simulation (COMPRESS) to compare the effects of having two supply streams with differing lead times versus what we commonly see in a single supplier stream. With WIOM strictly considering a “composite” supply stream, the determination needs to be made if the disparity between inventory systems that utilize either a composite or repair-and-procure supply stream is great enough to warrant a WIOM reformulation. We select fill rate as the performance metric to compare these inventory systems. Through COMPRESS we find that there is considerable difference in the resulting fill rates. Additionally, we find that as the variability in demand and lead time increases, the difference in the resulting fill rate values increases as well.