STUDY OF NAVAL WHOLESALE INVENTORY OPTIMIZATION MODEL

Navy Supply Systems Command (NAVSUP) manages a vast inventory of items to meet the fleet's requirements. A requisition decision for restocking an item is made, in part, based on the planned minimum safety stock (PMSS) level. The Wholesale Inventory Optimization Model with Enterprise Resource Planning (WIOM-ERP) simulates the fleet's requirement demand based on historic data to establish metrics that serve as the basis to recommend the PMSS levels. NAVSUP uses WIOM-ERP to balance its inventory between procurement persistence (avoidance of "churn") and fulfillment of demand (fill rate). WIOM-ERP provides the flexibility for planners to weigh the importance of each metric and shift the balance between churn and fill rate. Decision makers seek insight into the relative tradeoff between churn and fill rate, resulting from changing the weight of each metric. This study applies a high-dimensional statistical design of experiments to simulate different combinations of metric weights for the WIOM-ERP user inputs. The output of WIOM-ERP is recorded for each design point to calculate measures of performance (MOPs) for churn and fill rate. The data are analyzed by developing statistical metamodels for each MOP to determine the impact on the metrics of the factors, their interactions, and the resulting tradeoffs between different combinations of weights.Lieutenant Commander, United States NavyApproved for public release. distribution is unlimite