Aviation depot level repairable carcass tracking and billing : the effect of the two price system on budgeting and flying hour cost reporting.

104 Pages·1.5 MB·en_US

by  Staggs, Carl Stephen.;Doyle, Richard B.

--PAOUATESCHOOL
NA
iF0RNlA93943-5002

NAVAL POSTGRADUATE SCHOOL
Monterey, California
THESIS
AVIATION DEPOT LEVEL REPAIRABLE CARCASS TRACKING
AND BILLING: THE EFFECT OFTHE TWO PRICE SYSTEM ON
BUDGETING AND FLYING HOUR COST REPORTING
by
Carl Stephen Staggs
December, 1991
ThesisAdvisor: Richard B. Doyle
Approved for public release; distribution is unlimited
1258726
o

Unclassified
SECURITYCLASSIFICATIONOFTHISPAGE
REPORT DOCUMENTATION PAGE
la.REPORTSECURITYCLASSIFICATION 1b.RESTRICTIVEMARKINGS
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2a SECURITYCLASSIFICATIONAUTHORITY 3 DISTRIBUTION/AVAILABILITYOF REPORT
Approvedfor publicrelease;distributionisunlimited.
2b.DECLASSIFICATION/DOWNGRADINGSCHEDULE
4 PERFORMINGORGANIZATIONREPORTNUMBER(S) 5 MONITORINGORGANIZATIONREPORTNUMBER(S)
6a NAMEOFPERFORMINGORGANIZATION 6b OFFICESYMBOL 7a NAMEOFMONITORINGORGANIZATION
NavalPostgraduateSchool (Ifapplicable) NavalPostgraduateSchool
55
6c ADDRESS(City,State,andZIPCode) 7b ADDRESS(City,State,andZIPCode)
Monterey,CA 93943-5000 Monterey,CA 93943-5000
8a NAMEOFFUNDING/SPONSORING 8b OFFICESYMBOL 9 PROCUREMENTINSTRUMENTIDENTIFICATIONNUMBER
ORGANIZATION (Ifapplicable)
8c ADDRESS(City.State,andZIPCode) 10 SOURCEOFFUNDINGNUMBERS
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11 TITLE(IncludeSecurityClassification)
AviationDepotLevelRepairableCarcassTrackingandBilling: TheEffectoftheTwoPriceSystemonBudgetingandFlyingHourCost
Reporting -
,
12 PERSONALAUTHOR(S)
13a TYPEOFREPORT 13b TIMECOVERED 14 DATEOFREPORT(year,month,day) 15 PAGECOUNT
Master'sThesis From To December, 1991 95
16.SUPPLEMENTARYNOTATION
TheviewsexpressedinthisthesisarethoseoftheauthoranddonotreflecttheofficialpolicyorpositionoftheDepartmentofDefenseortheU.S.
Government.
17 COSATICODES 18 SUBJECTTERMS(continueonreverseifnecessaryandidentifybyblocknumber)
FIELD GROUP SUBGROUP AVDLR,AviationDepotLevelRepairable,CarcassTracking,NavyStockFund,
FlyingHourCostReporting
19 ABSTRACT(continueonreverseifnecessaryandidentifybyblocknumber)
ThepurposeofthisthesisistoexamineproblemswiththeNavy'stwopriceaviationdepotlevelrepairable(AVDLR)billingandtracking
system. Theseproblemsincludefluctuationsinpostfiscalyearobligationlevelsandthedistortionofflyinghourcostreportingdueto
AVDLRcarcasschargesandcreditsreceivedduringtheexpenditureavailabilityperiodsoftheOperationsandMaintenance,Navy
appropriationsusedtofundAVDLRpurchases. Fluctuationsinpostfiscalyearobligationlevelscanpotentiallyresultintheunintentional
overobligationoffunds. Distortionsinflyinghourcostsresultininaccurateflyinghourprogrambudgetrequests. Thisthesisalsoexplores
thefeasibilityofatwoprice/onebillsystemofchargingforAVDLRswhichhasoftenbeenproposedasasolutiontotheproblemsmentioned
above. Theconclusionreachedisthattheproblemshavediminishedsignificantlyovertime. Thetwopricebillingsystemremainsthebest
meansofmaintainingsystemvisibilityofAVDLRcarcassesandholdingdownoverallAVDLRcosts.
20QDISTRIBUTION/AVAILABILITYOFABSTRACT 21.ABSTRACTSECURITYCLASSIFICATION
UNCLASSIFIED/UNLIMITED ] SAMEASREPORT ] D1ICUSERS Unclassified
22a.NAMEOFRESPONSIBLE INDIVIDUAL 22b TELEPHONE(IncludeAreacode) 22c OFFICE SYMBOL
RichardB.Doyle [phone] AS/DY
DD FORM 1473,84 MAR 83APReditionmaybeuseduntilexhausted SECURITYCLASSIFICATIONOFTHISPAGE
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Unclassified
Approved for public release; distribution is unlimited
Aviation Depot Level Repairable Carcass Tracking and
Silling: The Effect of the Two Price System on
Budgeting and Flying Hour Cost Reporting
by
Carl Stephen Staggs
Lieutenant Commander, United States Navy
B.S., University of South Carolina, 1979
Submitted in partial fulfillment of the
requirements for the degree of
MASTER OF SCIENCE IN MANAGEMENT
from the
NAVAL POSTGRADUATE SCHOOL
December 1991
ABSTRACT
The purpose of this thesis is to examine problems with
the Navy's two price aviation depot level repairable (AVDLR)
billing and tracking system. These problems include
fluctuations in post fiscal year obligation levels and the
distortion of flying hour cost reporting due to AVDLR carcass
charges and credits received during the expenditure
availability periods of the Operations and Maintenance, Navy
appropriations used to fund AVDLR purchases. Fluctuations in
post fiscal year obligation levels can potentially result in
the unintentional over obligation of funds. Distortions in
flying hour costs result in inaccurate flying hour program
budget requests. This thesis also explores the feasibility of
a two price/one bill system of charging for AVDLRs which has
often been proposed as a solution to the problems mentioned
above. The conclusion reached is that the problems with the
two price system have diminished significantly over time. The
two price billing system remains the best means of maintaining
system visibility of AVDLR carcasses and holding down overall
AVDLR costs.
111
TABLE OF CONTENTS
I. INTRODUCTION 1
A. DESCRIPTION OF THE PROBLEMS ASSOCIATED WITH THE
TWO PRICE BILLING SYSTEM 1
....
B. ORIGIN OF NAVY STOCK FUNDING OF AVDLRS 2
C. EXPLANATION OF THE TWO PRICE AVDLR BILLING
SYSTEM 7
D. SUMMARY 10
II. AVDLR OPERATIONAL FUNDING 13
A. INTRODUCTION 13
B. THE FLOW OF FUNDS 13
C. LIMITATIONS ON OPERATING FUNDS 15
D. THE TRANSITION FROM NAVY STOCK FUND TO END USE
MANAGEMENT OF AVDLRS 21
E. AVIATION SUPPORT ACTIVITY STRUCTURE 22
F. THE POINT OF SALE 24
....
G. SECONDARY EFFECTS OF END USE OWNERSHIP 26
III. THE RELATIONSHIP BETWEEN ASO'S AVDLR CARCASS
TRACKING AND BILLING SYSTEM AND THE NAVY'S FLYING
HOUR PROGRAM 30
IV