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<p>Minimized safety level investment, while achieving high service levels and low customer wait time, is critical to the performance of the United States Navy supply system. The Naval Inventory Control Point (NAVICP) uses the Uniform Inventory Control Program to compute safety levels for each of the stock items they maintain. To assist in computing these levels, NAVICP aggregates repairable items based on demand and cost. The performance metrics used to measure the effectiveness of the model, Supply Material Availability and Average Days Delay, are affected by this aggregation. The purpose of the thesis is to describe an alternative methodology of aggregation that will allow NAVICP to allocate its item management skills more efficiently. The proposed methodology, based on item cost, demand, and Logistics Response Times for requisitions, can improve inventory performance without increasing the workload of item managers. Using analysis of variance, an analytical approach is adopted to ascertain whether an item has an average Logistics Response Time that exceeds the Navy's goal. It is shown that the proposed aggregation can improve Supply Material Availability and safety level investments while better managing items based on Logistics Response Time.
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<br>Subjects: Logistics, Naval; Logistics Response Time; Safety Levels; Shortage Costs; Levels Setting Segmentation Indicator; Operations Research; Analysis of Variance; Naval Aviation Repairables</div>
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Booth, Gregory L.</div>
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