Navy Supply

Intermediate Inventories Can Be Reduced Gao ID: NSIAD-87-19 October 28, 1986

GAO provided information on the Navy's management of intermediate inventories, specifically whether the Navy needed these inventories for prompt response to customer demands.

GAO noted that, at the end of fiscal year 1985, the Navy maintained intermediate inventories of consumable material in the United States worth an estimated $729 million. GAO found that the Navy could substantially reduce total inventories without increasing supply response times by: (1) eliminating intermediate inventories that duplicate wholesale and consumer inventories; and (2) using average rather than maximum inventory levels to compute intermediate inventory requirements. GAO also found that the Navy could reduce supply response times without increasing inventories by: (1) exerting more control over the requisition priority system; and (2) improving systems for reviewing and processing requisitions and updating inventory records.

Recommendations

Our recommendations from this work are listed below with a Contact for more information. Status will change from "In process" to "Open," "Closed - implemented," or "Closed - not implemented" based on our follow up work.

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