A cost benefit analysis of supplying consumable materials by Ready Supply Depot (RSD) versus commercial vendors.
Gaviola, Jose Ernesto B.
Kevin J. Maher
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The purpose of this study is to examine the current Philippine Fleet (PF) method of supplying consumable materials to Fleet units via a Ready Supply Depot (RSD). The study desires to determine the most cost-effective method of delivering the services currently provided by the RSD in order to fully maximize the use of Fleet resources without sacrificing mission effectiveness. This thesis focuses on the cost the Navy pays to the supplier and all direct and indirect costs of the RSD operation. This study compares the total price of each item inventoried at RSD to a similar item sold by commercial vendors in the Cavite City and Manila area. The difference in price is multiplied by past demand to determine the excess cost to consumers of acquiring consumables from RSD instead of directly from commercial vendors. Additionally, results from RSD consumer surveys are used to assess the service benefits provided by RSD, as seen by its customers. The research results show that the compared items are less expensive to the customer when purchased at RSD. However, it also shows that it is more costly for the government to provide these items via RSD. Furthermore, a customer survey indicates that the RSD customers are not satisfied with the selection, quality, availability, and customer service levels present at the RSD. As a consequence, the recommendation is made to eliminate the Ready Supply Depot (RSD) operation and allow the RSD customers to use commercial vendors for their non-military consumable item needs.
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