EVALUATING INVENTORY POLICIES OF CLASS IX ITEMS IN THE USMC-DLA LOGISTICS SYSTEM

Abstract

The U.S. Marine Corps utilizes its Supply Management Units (SMU) to provide Class IX repair parts support for the Marine Expeditionary Forces. These SMUs work with the Defense Logistics Agency to maintain an inventory of Class IX items that meets customer demand. Each SMU calibrates the inventory levels for each of its repair parts by adjusting several parameters: reorder point (ROP), time between inventory inspections (TBI), and requisitioning objective (RO). ROP and TBI determine when the SMU should replenish its inventory, and the RO determines how much should be ordered. Although current practice has allowed the SMUs to meet customer demand, due to budget cycle pressure and inaccurate parameter setting, parts overages and shortages occur. These lead to issues such as returning unordered materiel for reduced credit, increased inventory overhead costs, and longer customer wait times. This thesis constructs a stochastic simulation model using Simio to investigate if there are more efficient inventory policies than the SMUs’ current practice. The research focuses on customer wait time and aims to provide recommendations on inventory policies to the SMUs.