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NSIAD-84-28 1 (1983-11-07)

handle is hein.gao/gaobabned0001 and id is 1 raw text is: 


                   UNITED STATES GENERAL ACCOUNTING OFFICE
   ,. ,,,                 WASHINGTON, D.C. 20548


HUMAN ,SOURCE,
   DIVISION                                             November 7, 1983

     3-205252



     Mr. Clyde C. Cook
     Assistant Deputy Administrator
       for Procurement and Supply
     Veterans Affairs

     Dear Mr. Cook:

          Subject: VA Medical Centers Could Determine Supply
                     'equirements More Accurately By Updating
                     Factors Used To Compute Economic Order
                     Quantities (GAO/NSIAD-84-28)

          We have completed our review of supply management
     procedures and practices at Veterans' Administration (VA)
     Mines Medical Center in Hines Illinois. During the review
     we found weaknesses which we believe increase procurement
     and inventory holding costs and cause inefficiency of com-
     puter and supply analyst buy decisions. We performed our
     review mainly at the Hines Medical Center. However, intor-
     marion utained from the Austin Data Processing Center indi-
     cates that the weaknesses identified at Hines relate to sys-
     temwide procedures and computer operations throughout the VA
     supply systen.

          Weaknesses identified are shown below and discussed in
     detail in the enclosure:

           --Use of outdated and inaccurate cost and procurement
             leadtime factors. The cost factors used to calculate
             the economic order quantity (EOQ) have not been
             ,1pdated for 15 years and many procurement leadtimes
             have been set at too high a level. We believe that
             the use of the t . concept with current cost Jata and
             corrected leadtimes would resul: in r:educed costs to
             procure and hold inventory.

          --Supply analyst and computer generated buy decisions
             do not always match, causing extra work for the
             3upp l

                                                           (943197)





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