Inventory Management

GAO reviewed the inventory manager position at the Defense Logistics Agency (DLA), focusing on the difference between practices at DLA and selected private-sector companies. GAO noted that: (1) the major difference between DLA and the private sector was in demand forecasting; (2) DLA used a single forecasting model to predict demand, while private-sector companies utilized automated multiple forecasting models; (3) DLA planned to evaluate two multiple forecasting models; (4) private-sector companies placed greater emphasis on expediting delivery of material on order; and (5) unlike some private-sector firms, DLA did not have visibility of inventory at lower levels of the supply system.