Cost comparison of policies for ordering large-calibre ammunition inventory using a Weibull deterioration function

Abstract

Large-calibre ammunition batches deteriorate at different rates depending on their storage and transportation history. The structure of ordering policy used for the management of such a mixed stockpile may affect its long-term utility. The present paper explores the dependence of inventory system costs on the structure of ammunition ordering policy by modelling two simple ordering policies and comparing their long-run average costs. While corrective ordering policy (COP) advocates order placement only on failure, preventive ordering policy (POP) causes orders to be placed at a predetermined age or on failure, whichever is earlier. The research reported here tested the sensitivity of the ordering policy models to changes in cost and deterioration parameters using a unique method for estimating stockpile deterioration parameters from inspection data. The research results provide a framework for the selection of optimal ordering policy for large-calibre ammunition and other non military items that deteriorate similarly.