A Funding Allocation Methodology for War Reserve Secondary Items

Army units must be ready to deploy rapidly in the event of a contingency. Army Prepositioned Stock (APS) is designed to relieve the initial strain on the supply chain by reducing early airlift requirements and by meeting contingency demands until the production base can respond. The sustainment stock portion of APS is called war reserve secondary items (WRSI). Historically, WRSI requirements have been under-resourced, yet no methodology has existed by which to prioritize WRSI requirements. As part of an ongoing process for determining WRSI around the world, the Army asked RAND to use empirical demand data for a quick-turn analysis to prioritize item-level spending on WRSI for a northeast Asia (NEA) contingency with a planning-based deployment schedule. This document describes the methodology used to develop the resource allocation and forward positioning recommendations for the use of $467 million for WRSI. The authors describe how the input data was developed; explain the resource allocation methodology, focusing on the computation of benefit functions using the demand forecasts, item characteristics, and estimates of an item’s readiness contribution; and describe two solutions for prioritization. One of these solutions was the basis for FY 2008 spending on WRSI for a NEA scenario.