Date of Award

9-1998

Document Type

Thesis

Degree Name

Master of Science

Abstract

The Department of Defense has historically relied on Wilson's Economic Order Quantity (EOQ) model for consumable item management at all levels. With inventory practices under intense Congressional scrutiny over the past decade, the Air Force Materiel Command has searched for alternative systems to better manage its consumable inventory. Material Requirements Planning (MRP) is one such system, as is the MRP-based Repairability Forecast Model (RFM) developed by CACI. This thesis examines the wisdom of applying MRP logic in a remanufacturing environment. MRP has had some degree of success in environments where requirements are relatively certain and demand and lead time variability are not excessive. A remanufacturing operation, in contrast, is typified by a great deal of variability and uncertainty due to the very nature of repair. The experimental methodology involved the development of computer simulation models of EOQ and MRP systems. Demand uncertainty, demand variability, and lead time variability were then varied at three levels each to develop a full factorial experimental design. The results were used to test EOQ and MRP using two different performance measures: average number of awaiting parts (AWP) days per repair and total annual inventory cost. The results lend support for the use of MRP in a remanufacturing environment. The number of AWP days was significantly reduced from that of the EOQ system, albeit at an increased inventory cost. When the two measures are combined, however, MRP appears to outperform EOQ in aggregate.

AFIT Designator

AFIT-GIM-LAL-98S-02

DTIC Accession Number

ADA354232

Comments

Presented to the Faculty of the Graduate School of Logistics and Acquisition Management of the Air Force Institute of Technology

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