oversight

Inventory Model Proposed To Reduce Levels of Paper Stored

Published by the Government Accountability Office on 1971-10-29.

Below is a raw (and likely hideous) rendition of the original report. (PDF)

                                                                                                                            ,   .,   <   ,.   I,




                                   UNITED
                                        STATES
                                             GENERAL
                                                  ACCOUNTING
                                                          OFFICE
                                         WASHINGTON,       D.C.     20548


CIVIL   DIVISION                                                                                    QCT      29      1971
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                                                                        LM092450
                                                                                 III1
          bear     Mr,   $peRo%t




                 Wlisrecently  Inzqullmd fnto thu basis wiwd by tlm Frintlng      OHice to de-
           termfne 1evaPtjr far paper staekags.    The Printfng Wfslce has AR eetab2ishad
           lxmrd0t poftat for each itsm in jtts paper stock.    ThQ  TXXWd%?T   pOgRt  iS CdCU-
           lated by mwlt%plyMg the avaraga monthly wag%by a m~~nth            Eacto~that: vaTi%@
           far each iecsmand raRgtw3
                                   fssm 2 ts 4.              Thi6     m&araa       &at   ops-Aand         z3Rd    onerder
           Iewe      ara r2ut &tended ta fall below tha equivalent  of 2 mmthst usage for
           l%mte jltemls and 6’ mmths’ for Qlh%.rBa A major waakrmss atn the method UWX! to
           dstermk~e the mcfntb factm is t&3 boavy rellfmc~3 on gersmd      jardgmm~ and
           th%little         use of xxadi%yava$Iab%%
                                                   historPcaP data.
                   To t13st mm ob$ervations,      w% l3e~sctaa thri;e frQquQRtly used ritems:
           offsczrtbotlk paper (plropesrtynw&%r100871pwhit%writing              papes (propearty
           number 2051, am2 thfted       States   pasta1   card gaper fpraperty   number 1139).

                 We dratrMgucsd hfstordcal       data covar%ng a 2-4/2 year parSod into a COW
           puter simula&i.on af Prfnting       Offic& ape~atians.     The delta ineluaed factor$
           such as purchase or&r datas, quantities            ordered and received B receiving
           d&m9 and dajtly ~s&g~t;. We pra$3ctecrZ the2 sfmullatfox+4 forWard 5 years.          Our
           analysPs of sbmlat~d        Sbnventory actPv?ety dmwed that the Printing      Office
           could substa&zPaE%y      r%dwz%   ftn ~%s&%IF   pointer withwt wxndng short oE pa-
           piw.   Qulr study indtcatsd     that ~sxietiag   $nveatory  practices   may be resultfng
           $a u~fisce~sarfiy   large ~~cush3.a~~~~of stock on--haad or on-order.




                  Based a8 our revPew of th&ss tkr&a ftemsl wa astimate tbat the Printing
           Mfica     may ba able to r&ue~~ %ts total investmerat fn paper iszventory by
           about $2 miPlh$on, or 23 ~er~%nt QE *he Printing        OffESce*s gaper 1~ventory
           invastaont,    by using tba modal to calculata    rersrdar points and purchase
           quantitias.     WC;have mot attemlpted tQ mtlmate      the amount of savings that
           may accrue frum radurztfons SR storage assd related costs.
     During our maeting with your staff on August 12, 1501, we agreed to
work with them in refining      and testfng the model.       The objectfves  of our
cooperative    effort  are to make certain    that no important     aspect of your
operations    has been overlooked     and to verify tha results of the mode1 by
operatfng   it simultaneously     with the existfng   system.

      We have loaned our analytic   workpapers    to the Printing  Office’s Deputy
Director,    Bata Systems Service e for review    before the model is converted
to use on your in-house computer.       We were   advised by your staff that the
testing and vergfication    of the model ~211     be completed wrthin 6 months.

     We hope this modeling technique stimulates   interest          in further   improvs-
merits in fnventory management   l If we can be of further          assistance   to you
on this matter, please let us know.

   A copy of this letter      is befng   sent to the Staff      Director   of the Joint
Commit tee CID Prfnting .

                                           Sincerely   yours,




                                           Edward C. Messinger
                                           Assistant Director


The Honorable A. N. Spence
Fubffc Printer
U.S. Government Printing Office




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