This is a NAVAL POSTGRADUATE SCHOOL MONTEREY CA report procured by the Pentagon and made available for public release. It has been reproduced in the best form available to the Pentagon. It is not spiral-bound, but rather assembled with Velobinding in a soft, white linen cover. The Storming Media report number is A330733. The abstract provided by the Pentagon follows: Battlegroup sparing is an inventory strategy that can significantly reduce the initial outfitting costs of a weapon system by greatly reducing the range and depth of spares required to outfit individual ships. This strategy moves low demand items from shipboard spare part inventories to intermediate level inventories which support an entire battlegroup. This thesis extends the techniques of Readiness Based Sparing (RBS) and proposes a method for defining suites of spares at both the shipboard and battlegroup level which augment each other to achieve a desired level of system readiness while realizing the efficiencies of battlegroup sparing. To evaluate the impacts of this strategy, this thesis develops a computer simulation, which can be utilized to evaluate the budget and readiness impacts of applying this or any other inventory strategy to a weapon system. The methodology proposed by this thesis was then applied to the Cooperative Engagement System (CES), reducing initial outfitting costs by nearly 50%, an overall savings of over thirty million dollars in scarce outfitting funds.
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