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By Jeremy Arkes

One instrument the Air strength is utilizing to enhance its logistical aid to the warfighter is paying for and supply-chain administration (PSCM). Is PSCM doing what it was once meant to do? if that is so, how good? Are different elements influencing its meant results? The authors have constructed an econometric version that is helping research most of these issues. whereas info availability and caliber could be a problem, the version can also be worthwhile in different contexts.

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Extra resources for Estimating the Benefits of the Air Force Purchasing and Supply Chain Management Initiative

Example text

Thus, in this example, this approach would understate the causal effect of the PSCM initiative on MICAP incidents and could even suggest that the PSCM effect had been negative. This could cause the Air Force to underestimate the effects of PSCM and could affect future Air Force resource decisions. In addition, this could provide incorrect feedback on the efforts of personnel who are actually bringing benefit to the Air Force, because, in our notional example, without their efforts in implementing the initiatives, things would have been worse.

Two factors external to the supply chain are the number of removals for the NIIN and scheduled removals. 1 Examples of Factors Influencing the Number of MICAP Incidents for a Particular NIIN Supply-Chain Factors Sources of Variation External Unscheduled removals (part failures) Operational tempo and age of parts Scheduled removals Time, operational tempo, and sorties Internal 2 Stock-leveling policies Funds and total inventory Repair capacity Funds and anticipated business volume In our example, we showed that under PSCM implementation, flying hours and part removals increased independently of PSCM, though concurrently.

Theoretically, this would provide a more-accurate set of time-level fixed effects for the model because they would be for the Air Force rather than only the initial set of PSCM NIINs. Unfortunately, the only set of NIINs that we would be able to use would be the set of 228,389 NIINs that had at least one MICAP incident in our 25quarter time frame. Thus, this sample would not be representative of the whole Air Force. 1 percent of the NIIN-quarter observations would fall under a PSCM contract. Co-Occurring Factors As mentioned in Chapter Three, the ideal co-occurring factor would be the number of NIIN removals.

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