A brief description of a new general approach to demand prediction problems is given. This is based on the demand characteristics of parent components and the parts installed in these components. A specific model is presented which employs this information. The paper concludes with empirical tests of the model.
In this paper a model is presented which focuses on the difficult problem of predicting demands for items with extremely low usage rates. These form the bulk of repair parts in military systems. The basic notion underlying the model is the pooling of usage data for common design items with movement for the purpose of estimating usage rates for similar items which have shown no movement.A unique feature of the model is that it also makes possible the estimation of usage rates for items newly introduced into a system for which no previous usage history is available. INTRODUCTIONThe problem of predicting demands for individual repair parts in military inventory systems has received much attention over the last two decades. This problem is a complicated one because of the sporadic nature of demands for military repair parts. For most repair parts, no demands are registered over long periods of time and when items are demanded, they are generally demanded only once or twice. This fact has now been documented by many usage studies t and is once again documented in this study. To illustrate the nature of the demand problem under consideration, usage data for 61 submarine patrols are shown in Table 1. As may be seen from the first entry in the table, no usage 535 536S. E. HABER AND R. SITGREAVES was recorded for the vast majority of items, i.e., the vast majority of items was not demanded in any one of the 61 patrols. Of those that were demanded, one-half were demanded in exactly one patrol.Thus for most repair parts with usage, the problem of estimating usage rates is a difficult one. This difficulty is compounded by an order of magnitude for the bulk of the items whose usage history shows zero units used.In this paper we will be concerned with the estimation of expected usage of repair parts for the purpose of computing shipboard allowance lists. A shipboard allowance list is defined as the range and depth of repair parts to be stocked aboard ship to meet uncertain demands. The range of repair parts refers to the number of different items to be stocked. The depth refers to the number of units stocked of an item.Given that repair part usage is sporadic, several demand prediction strategies are available. The most widely practiced approach is that of employing usage estimates provided by technicians, i.e., supply personnel responsible for provisioning of repair parts. In practice, these have been found to be conservative and lead to relatively expensive stockage lists. Such conservatism, however, is preferred to a much more extreme approach which might assign a zero usage estimate to a repair part until positive usage is experienced. The difficulty with this latter approach is that many repair parts are only one-time movers. Failure to have an adequate quantity of stock aboard ship or in the supply system prior to the first demand can thus lead to a large range of shortages and an unsatisfactory level of readiness.Another approach that has been utilized to estimate usage of slow moving items is exponential smoot...
This paper presents a basic loss minimization model which has been applied in varying contexts for Polaris logistics problems. Definitive results a r e obtained in a general framework which extends the classic newsboy problem in two principal directions. F i r s t , probability distributions for demand a r e unrestricted. Second, a general framework for "penalties" o r "premiums" is introduced to permit formulation of possibly non-convex loss functions. The main result is a constructive existence theorem for minimum values of these general expected loss functions. * *
The George Washington U n i v e r s i t y L o g i s t i c s R e s e a r c h P r o j e c tWashing t o n , D. C . ABSTRAG TOne of the major requirements for military systems h a s been the need f o r a m e a s u r e of the relative importance of stocking one i t e m r a t h e r than another. The present study develops one such systemwhich h a s been implemented f o r the P o l a r i s weapons system. Considerable emphasis i s placed on systematic development of underlying principles. It is concluded that the present approach could readily be adapted to other weapons systems.
Human capital studies do not usually consider whether an individual is paid an hourly wage or a salary. The authors of this paper develop a conceptual framework that explains why some workers are paid salaries and predicts that salaried workers will invest more in human capital than will hourly workers. In particular, this prediction hinges on the differing effort incentives facing hourly and salaried workers, and their employers, in jobs that are paced versus unpaced. Empirical evidence supporting this prediction and other hypotheses implied by the proposed framework is presented using data on individuals covering a 16-month period in 1984–85 from the Bureau of Census Survey of Income and Program Participation (SIPP), a longitudinal survey.
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