A Probabilistic Approach to Army Stockage and Destockage Policies

Army stockage policy is based upon demand frequency--the more frequently a part is demanded, the better its chances of stockage. Though fixed and specified by regulation for each echelon of supply, these policies are subject to change. Such change is oftern desirable in order to improve performance or decrease cost, but the regulations provide no guidance and do not address the potential consequence of change. In the report, methods are developed for deciding whether or not to continue stocking formerly stocked parts whose demands fail to meet the new stockage criteria, and deciding to retain or dispose of assets and for parts no longer qualified for stockage (destocked). The report gives illustrative probabilistic solutions. (Author)