Army Inventory

This report evaluated the progress the Army has made toward reducing its inventory levels of infrequently requested items. The five Army divisions GAO reviewed reduced their authorized inventory levels by about $30 million between 1992 and 1993. These same divisions had about $108 million in inventory that they had received few or no requests for or that involved items that contributed little toward satisfying their customers' needs. Army studies have shown similar results for the large number of inventory items that are infrequently demanded and contribute little toward improving supply responsiveness. These studies recommended that infrequently demanded items be removed from the authorized inventories and that the criteria for determining what items should be stocked be reevaluated.

GAO found that: (1) between 1992 and 1993, five Army divisions reduced their authorized inventory levels by about $30 million; (2) about $108 million of the five divisions' authorized inventory did not meet the needs of their customers; (3) of the $108 million in authorized inventory, $46.9 million was invested in low demand inventory items and $61 million was invested in inventory that was issued to 11 percent of the divisions' customers; (4) the cost-effectiveness of the Army's investment in retail inventory items that contribute little toward satisfying the needs of its customers is questionable; and (5) the Army has acknowledged that it needs to remove infrequently demanded items from its authorized inventories and reevaluate its inventory retention criteria.