Simple Inventory Policies as Diagnostics – Exploration of optimal inventory control of A4 Materiel Class

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Authors
  1. Maybury, D.W.
Corporate Authors
Defence R&D Canada - Centre for Operational Research and Analysis, Ottawa ON (CAN)
Abstract
We apply a filter method, based on continuous review (Q, r) inventory policies, to the Department of National Defence’s highest value and fastest moving inventory. The filter flags potentially problematic inventory levels in DND’s holdings. Our results provide DND with a method that carefully targets the most problematic inventory issues, both in cost and total affected part numbers, for further study and examination. We apply our methods to the current A4 Material Class data, and we identify 17 out of 136 items which have inventory levels at least a factor of three above an optimal (Q,r) policy with a 99% fill rate. Our results call for more detailed Directorate Materiel Group Operational Research study and a mandate to work closely with Director General Materiel Systems and Supply Chain staff on inventory rationalization.

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Report Number
DRDC-CORA-TM-2012-275 — Technical Memorandum
Date of publication
01 Dec 2012
Number of Pages
28
DSTKIM No
CA037062
CANDIS No
536720
Format(s):
Electronic Document(PDF)

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