Mitigating Growth Cost for Mobility Readiness Spares Packages

A Mobility Readiness Spares Package (MRSP) is an air-transportable package of spare parts configured for rapid deployment in support of conflict or war. Each package is tailored to support a specific scenario, for a specific type and number of aircraft without re-supply for the first 30 days of deployment. Inventory is limited to mission-critical spares. The high cost of airlift and spares drive a necessity to keep MRSPs as small as possible, yet robust enough to meet wartime goals. Historical MRSP inventories exhibit significant volatility and the subsequent growth of their inventory creates significant cost to the Air Force. Annual MRSP growth budget estimates over FY03 - FY05 ranged from $700M to $1.2 billion. This research proposes methods to reduce unnecessary growth, stabilize inventory, and still maintain a viable MRSP. Causes of inventory growth are identified by examining historical data. Controlled experiments are conducted against volatile data to evaluate the effectiveness of exponential smoothing and moving averages in stabilizing inventory. Asset-based MRSP computations are used to give greater consideration to the sunk cost of inventory. This research provides the Air Force a set of business rules that stabilize inventory, reduce spares budgets, and maintain a viable MRSP that meets wartime goals.