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The Army's Use of Serviceable Returns in Requirements Computations

NSIAD-85-59 Published: Apr 09, 1985. Publicly Released: Apr 09, 1985.
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Highlights

GAO surveyed the Army's serviceable returns to the wholesale supply level to determine the degree of compliance with the recommendations in a previous report. The Department of Defense (DOD) had concurred with that report's recommendation that the Army reduce projected requirements for materiel by the full amount of forecasted returns of serviceable materiel. DOD directed the Army to review the procedures that establish an offset to demands through serviceable returns at the inventory control points (ICP) and ensure that the policy was followed.

Recommendations

Recommendations for Executive Action

Agency Affected Recommendation Status
U.S. Army Materiel Command The Commander, AMC, should encourage the ICP's to use as high a maximum serviceable return rate as possible to forecast invalid demands in their requirements computations rather than encouraging the ICP's to limit the rate to no more that 20 percent.
Closed – Implemented
The Army supply policy is being revised to require each supply command to establish a serviceable return rate that is most appropriate to its operation.
U.S. Army Materiel Command The Commander, AMC, to determine the appropriate serviceable return rate, should monitor demand rates for individual items experiencing significant returns to determine if the demand increased, decreased, or remained the same for the review cycles following the reports of excess.
Closed – Implemented
The new Army supply policy on serviceable return rates will require supply commands to yearly justify the rate being used and demonstrate its impact on performance and funding.

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Topics

Army facilitiesArmy suppliesEquipment managementInventory control systemsMilitary materielMilitary systems analysisMilitary forcesNational securityInternational affairsInventory control