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LEY KN0X 2*R L,BRARY NAVAL PO.^TGR/ O'JATF Srwnni MONTEREYCA 93943 5101 °L NAVAL POSTGRADUATE SCHOOL MONTEREY, CALIFORNIA THESIS THE IMPACT OF PREMIUM TRANSPORTATION ON USMC LOGISTICS PROCESSES by William T. Hagerott December, 1997 Principal Advisor: Paul J. Fields Associate Advisor: Tim Phillips Approved for public release; distribution is unlimited. REPORT DOCUMENTATION PAGE Form Approved OMBNo 0704-0188 Publicreportingburdenforthiscollectionofinformationisestimatedtoaverage 1 hourperresponse, includingthetimeforreviewing instruction, searchingexistingdata sources, gatheringand maintainingthedata needed, andcompletingand reviewingthecollectionofinformation. Sendcomments regardingthisburdenestimateoranyotheraspectofthiscollectionofinformation, includingsuggestionsforreducingthisburden, toWashington headquartersServices, DirectorateforInformationOperationsand Reports, 1215Jefferson DavisHighway, Suite 1204,Arlington, VA22202-4302, and totheOfficeofManagementand Budget, Paperwork Reduction Project(0704-0188)Washington DC 20503. 1. AGENCYUSEONLY(Leaveblank) 2. REPORTDATE 3. REPORTTYPEAND DATESCOVERED December 1997 Master'sThesis 4. TITLEANDSUBTITLE 5. FUNDING NUMBERS THE IMPACT OF PREMIUM TRANSPORTATION ON USMC LOGISTICS PROCESSES 6. AUTHOR(S) William T. Hagerott 7. PERFORMINGORGANIZATION NAME(S)ANDADDRESS(ES) 8O.RGPAENRIFZOARTMIIONNGREPORT Naval Postgraduate School NUMBER Monterey, CA 93943-5000 9. SPONSORING/MONITORINGAGENCYNAME(S)ANDADDRESS(ES) 10.SPONSORING/ MONITORING AGENCYREPORTNUMBER 11. SUPPLEMENTARYNOTES Theviews expressed inthisthesisarethose oftheauthorand do notreflect theofficialpolicy orpositionoftheDepartment of Defense orthe U.S. Government. 12a. DISTRIBUTION/AVAILABILITYSTATEMENT 12b. DISTRIBUTION CODE Approvedforpublicrelease; distribution unlimited. ABSTRACT (maximum 200 words) The purpose ofthis thesis is to use simulation models to evaluate the benefits and costs of premium transportation on inventory levels at I MEF, Camp Pendleton, CA. The core ofthe research focuses on studying the impact that 100% premium transportation has on Order Ship Time (OST) and requisitioning objective inventory levels at I MEF. Although premium transportation is expensive, the savings in inventory costs provide an opportunity to offset transportation costs, decrease OST, and improve overall customer service. The research results show that the benefits generally outweigh the costs when premium transportation is used for consumable items. Premium resupply from the New Cumberland/Mechanicsburg Depot resulted in significantOSTreductions while incurringanadditional cost ofonly $400 per month. Premium resupply from the Sharpe/Tracy Depot isavailableat no costbecause thedepot has unusedpremium transportation capacity readily available. Repairable items, however, do notappearto support theuseofpremium transportation dueto theirhighweight, andthushigh transportation cost. 14. SUBJECTTERMS 15. NUMBEROF Precision Logistics, OrderShip Time, RequisitioningObjective, Simulation, Model PAGES 138 16. PRICECODE 17. SECURITYCLASSIFICATIONOF T18H.ISSEPCAUGREITYCLASSIFICATIONOF 19. SECURITYCLASSIFI-CATION O20F.ALBISMITTRAATCIOTN REPORT OFABSTRACT Unclassified Unclassified Unclassified UL ' NSN 7450-01-280-5500 Standard Form298 (Rev.2-89) PrescribedbyANSIStd.239-18298-102 Approved for public release; distribution is unlimited THE IMPACT OF PREMIUM TRANSPORTATION ON USMC LOGISTICS PROCESSES William T. Hagerott Captain, United States Marine Corps B.S., U.S. Naval Academy, 1992 Submitted in partial fulfillment ofthe requirements for the degree of MASTER OF SCIENCE IN MANAGEMENT from the NAVAL POSTGRADUATE SCHOOL December 1997 V I I \ n.