, ., < ,. I, UNITED STATES GENERAL ACCOUNTING OFFICE WASHINGTON, D.C. 20548 CIVIL DIVISION QCT 29 1971 I11111111 llllllll lllll!llllllllllllll lllllllll 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 -2- 0
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)