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DCCUMENT RESUME
02328 - [A1332?20]
(Army Inventory Management in Korea]. LCD-77-214; B-166312. may
9, 1977. 9 pp.
Report tc' Secretary, Department of Defense; by Fred J. Shafer,
Director, Logistics and Communications Div.
Issue Area: Facilities and Material Management, Consolidating or
Sharing Supply and maintenance Systems (701).
Contact: Logistics and Communications Div.
Budget Function: National Defense: Department of Defense -
Military (except procurement & contracts) (051),
Organization Concerned: Department of the Army.
Congressional Relevance: House Committee on Armed Services;
Senate Committee on Armed Services.
The Army's inventory management system in Korea is part
of the direct support system. The purpose of the system is to
reduce the large peacetime investment in oxerseas depot stocks
for the support of combat divisions and their support units. The
Army has reestablished a 30-day depot safety level of stocks at
Camp Carroil wh4.ch consists of 12,500 items valued at abott $2.5
million. Fkndings/Conclusions: The data used to identify the
items and compute the requirements did not accurately represent
the items or quantities that should make up the safety ].vel.
This safety-level concept represents, in general, the same one
to which the Army Audit and GAO took e.7ception in 1973 and 1974.
The rationale for the reestablishment of the depot safety level
was questionable, and a reevaluation of the safety level of
stocks is needed. The reestablished safety level is not
necessarily related to mission-essential items or high-priority
needs. Increased stockage has not beea the solution to unit
stock-out problems, and the present program for redistributing
stock fund excesses has not been effective. Recommendations:
The Secretary of Defense should reevaluate the need for the
30-day safety level, taking into consideration: (1) the downward
trend in order-ship time for requisitions; (2) the 90-day
order-ship time used by units in Korea to compute requirements;
and (3) economic order quantity computations for most stock-fund
items, which provide more thau 30 days of operating stocks. In
addition, he should defer replenishmeat of safety-level stocks
in Korea; cancel related on-order quantities pending
reevaluation of the need for these stocks; and provide an
improved automated edistribution of unit stock-funded excesses.
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