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LCD-80-64 1 (1980-05-15)

handle is hein.gao/gaobabaof0001 and id is 1 raw text is: P, UNITED STATES GENERAL ACCOUNTING OFFICE | | 0 WASHINGTON, D.C. 20548 LOG ISTICS AND COM MUNICATIONS DIVISION MAY 15, 1980 B-162152 The Honorable Harold Brown The Secretary of Defense 112304 Dear Mr. Secretary: Subject: LThe Army Can Save Millions Annually By Properly Considering Serviceable Returns in Its Requirements Computations (LCD-80-64) We have completed our review of the way the Army removes invalid demands, representing customers' unsuccessful attempts to cancel orders, from its demand data base. We found the Army's requirements for future procurement or rework of demand-supported items are inflated by tens of millions of dollars annually because four of the five major wholesale inventory control points have placed substantial limitations on the extent to which serviceable returns can be applied to past demands. Demands which reflect customers' orders placed on the wholesale supply system are recorded and maintained for 24 months in the Army's data base. The Army uses this data to compute inventory levels and requirements for future pro- curements or repair programs. We previously reported to you (LCD-77-201, Feb. 17, 1977) that the Army could realize substantial savings by eliminating demands representing orders which customers have attempted to cancel but were unsuccessful. Your response to that report stated that the Army does have a system for removing demands representing unsuccessful cancellation attempts. The Army's system removes the demand when the customer returns serviceable materiel. (943052) ,I&, '

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