NAVAL POSTGRADUATE SCHOOL

1 NAVAL POSTGRADUATE SCHOOLM onterey, California00 DTIC1 ELEC'LrEIIIsSEP1 6 THESIS*AN ANALYSIS OF SPARE PARTS FORECASTINGMETHODS UTILIZED IN THE UNITED STATESMARINE CORPSbyRobert E. LoveandByron F. StebbinsJune 1987 Thesis Advisor: Dale I. ScogginApproved for public release; distribution is unlimited87 9 15 05aUNCLASSIFIEDWSE CRIry CLASSCICATION OF THIS PACEX 7 REPORT DOCUMENTATION PAGE'a REPORT SECLRITY CLASSIFICATION 1b RESTRICTIVE MARKINGSUNCLASS IFIED2a SECUR-Tv CLASSIFICATION AUTH4 ORITY 3 OiSTRiBUTIONIAVAILAUILITY OF REPORT2b ECS54C-A ON- DWNGADIG SHEDLEA pproved for public release;Zb OC~AS~CATONDOWGRAING CMEULE distribution is unlimited4 PEFOR-MNG ORGANIATION REPORT NuMBER(S) S MONITORING ORGANIZATION REPORT NUMBER(S)*6a NAVE OF PERFORMING ORGANIZATION 6b OFFCFE SYMBOL 7a NAME OF MVONir~iNG ORGANiZATiONNaval POSTGRADUATE SchoolsI Code 54 NAVAL POSTGRADUATE SCHOOL & ADDRESS City State and ZIP Code) 1b ADRESS (Cty.

2 State, "n ZIP Code)Monterey, California 93943-5000 Monterey, California 93943-50003a %ME OF $u%DING SPONSORING Tab OFFiCE SYMBOL 9 PROCUREMENT iNSTRuMENT IDEN74 ICATION lNLM9ER, RGA%IZAT ON (if applicable)3c -%ZD0 ESSiCry Start, an"ZIP Code) 10 SOUjRCE OF FUNDING NUMBERSPROGRAM PROjECT ITASK I AORK , NIELEMENT NO INO NO ACCESS ON N1include Secury Classficaton)AN ANALYSIS OF SPARE PARTS FORECASTING METHODS UTILIZED IN THE UNITEDSTATFS MARINE CORPSLoe obr and Stebbins, Byron F.; EOr3 ' ME COvERED 11 AtS OF REPORT (Year. Month Day) PACcDMaster's Thesis Q~Ov ro Il B, June 1 144 COS~r, CODDES 1 8 SuBjECT IERMS (Continue on reverse of necesary and identify by block mr.

3 ,nber)-D 3 ROP SuB-GPOU~P Inventory Policies; Inventory Models, ReplacemeiIFactors; Provisioning Models; Spare Parts;I I Provisioning Policies; Initial ' Continue on reverse if necessar and identify by block num~ber)The main thrust of this study is centered around the United StatesMArine Corps' initial provisioning of spare parts. The research focuseson two intec'ral components for the establishment of stockage levels. Thefirst component considers an analysis of the peacetime replacement rate aithe production leadtime data provided by contractors. The second compone:evailuates the current Marine Corps inventory model as compared to theNavy's inventory model and the Initial Spares optimization Model (ISOM).

4 This study is primarily concerned with initial issue provisioning stockag,levels maintained by the Marine Corps Logistics Base, Albany ' G OF ABSTRACT 21 ABSTRACT SECURITY ED'UNL MITfO 50 SAME AS RPR CODTIC uSERS TUnla;r-i f it-'..a .E OF FIESPONSILE I220 TELERmONE (Include Area Code) 22c COW C I. Sc osacin (408) 646-2539 lCode 54Sc:DO) FORM 1473, 84 MAR 83 APR ed'to' -"ay be wied iiit I extaysted SECyRiTv CLASSFCA?'C% 0; -- S PA'CEAll ottic' ed-t-oi9 are obsolete UNCLASSI FIED11111 UNCLASSIFIEDSECUNITY CLASSIICATION OF THIS PAGE (MOM #19 -ABSTRACT -(CONTINUED)During the course of the study it was found that:(1) Difficulties exist in documenting contractorprovided engineering estimates maintained inthe Marine Corps Provisioning Files.

5 (2) The current inventory is inadequate and stateof the art methods and models should beimplemented by the Marine Corps.(3) Contractor provided engineering estimatestend to be skewed. Provisioners have no formalmethod for validating contractor major contribution of this study is thedevelopment of an initial manual of standard factorsthat can be used by provisioners to validate data andas a baseline from which pertinent questions couldbe NTIS CRA&I'- f C TAB "; , -'- iDi:t i, "S N 0102- LF-014- 66012 UNCLASSIFIEDSECUNITY CLASSIICATION OF THIS PAOE(VhWa DWS Enee*d)11 M, . , -, ,Approved for public release; distribution is unlimitedAn Analysis of Spare Parts Forecasting MethodsUtilized in the United States Marine CorpsbyRobert E.

6 LoveCaptain, United States Marine , State University of New York at Albany, 1977andByron F. StebbinsCaptain, United States Marine , Texas A&M University, 1978 Submitted in partial fulfillment of therequirements for the degree ofMASTER OF SCIENCE IN MANAGEMENT from theNAVAL POSTGRADUATE SCHOOLJune 1987 Authors: 24Ct -4 Robert E. LoveByr~n F. StebbinsApproved by: ~~~i oDale I. Scoggin, IWOMs AdvisorNancy VRoberts, Second ReaderWillis R. Greer, Jr., C iran,Department of AdministratiVe SciencesDean of Information and Policymlnce3~ABSTRACTThe main thrust of this study is centered around theUnited States Marine Corps' initial provisioning of spareparts. The research focuses on two integral components forthe establishment of stockage levels.

7 The first componentconsiders an analysis of the peacetime replacement rate andthe production leadtime data provided by contractors. Thesecond component evaluates the current Marine Corpsinventory model as compared to the Navy's inventory modeland the Initial Spares Optimization Model (ISOM). Thisstudy is primarily concerned with initial issue provisioningstockage levels maintained by the Marine Corps LogisticsBase, Albany the course of the study it was found that:, I) Difficulties exist in documenting contractor providedengineering estimates maintained in the Marine CorpsProvisioning (2) The current inventory is inadequate and state of theart methods and models should be implemented by theMarine Corps.

8 ,-) (3) Contractor provided engineering estimates tend to beskewed. Provisioners have no formal method forvalidating contractor major contribution of this study is the developmentof an initial manual of standard factors that can be used byprovisioners to validate data and as a baseline from whichpertinent questions could be OF CONTENTSI. INTRODUCTION---------------------------- ------------- 8A. GENERAL--------------------------------- --------- 8B. OBJECTIVES OF THE RESEARCH -------------------- 10C. RESEARCH QUESTIONS----------------------------- 10D. RESEARCH METHODOLOGY-------------- ------------- 11E. SCOPE OF THE STUDY----------------------------- 12F. DEFINITIONS----------------------------- -------- 12G.

9 ORGANIZATION OF THE STUDY---------------------- 13I. BACKGROUND------------------------------ ------------ 15A. INTRODUCTION---------------------------- -------- 15B. ACQUISITION CONCEPTS AND PROVISIONINGPRACTICES------------------- -------------------- 16C. DEPARTMENT OF DEFENSE POLICY AND PROCESS --- 20D. NAVY POLICIES AND PROCEDURES------------------- 22E. MARINE CORPS POLICIES AND PROCEDURES------------25F. SUMMARY--------------------------------- -------- 28II. PROVISIONING---------------------------- ------------ 30A. INTRODUCTION---------------------------- -------- 30B. METHODS OF ACQUISITION------------------------- 31C. PROVISIONING DATA FACTORS---------------------- 33D.

10 PROVISIONING CATEGORIES FOR INITIAL SPAREPARTS PROCUREMENT----------------------------- - 40E. MARINE CORPS PROVISIONING SYSTEM--------------- 42F. MARINE CORPS PROVISIONING MODELS--------------- 435G. COMPARISON OF INITIAL PROVISIONING MODELS -- 52H. CONTRACTOR REQUIREMENTS------------------------ 65IV. METHODOLOGY----------------------------- ------------ 68A. INTRODUCTION---------------------------- -------- 68B. SAMPLE DESCRIPTION----------------------------- 68C. VARIABLE DEFINITION---------------- ------------ 70D. VARIABLE CONSTRUCTION AND MEASUREMENT-----------71E. DATA ANALYSIS DESCRIPTION -------- 75V. RESULTS--------------------------------- ------------ 78A.