Discuss the nature of the costs that affect inventory size

Return credits may be applied to collections of specific cases when requested by the purchaser. SDRs for non-shipment or non-receipt will be disallowed by the USG if such claims are received more than one year after the scheduled delivery date or initial billing, whichever is later.

In addition to providing support for standard items, this program also supports requirements for non-standard items. Repair of a purchaser-owned article requires that the repairable article be returned under an LOA.

The Purchaser agrees to report misdirected or unordered shipments. The AECA requires a report by the President to Congress when a sale could have significant adverse effect on the combat readiness of the U. The USG makes every effort to provide the correct defense article or service in the quantity and quality shown in the LOA.

A repairable item may be exchanged for the same type serviceable item in DoD stocks under certain conditions. For weapons systems soon to be obsolete to U. When a purchaser builds an initial FMSO I, then terminates the CLSSA before substantial orders are placed, and no other purchaser exists, liability may apply for assets on hand and due-in.

To the extent authorized by the Type of Assistance TA and Source of Supply SOS codes assigned to the LOA line item, requirements that cannot be satisfied at reorder level may be filled by one of the following methods the following may not be inclusive of all appropriate support options.

This minimum value includes the value of the item plus any transportation and handling costs. No Presidential report is required if the decision is not to make a sale. Consideration may be given to receiving claims for non-shipment or non-receipt made more than one year after the scheduled delivery date to the extent that the actual delivery date is later.

When there is an excess quantity of an item in DoD stock, demand records are reviewed before excess materiel is transferred or declared surplus. The longer the time between when the discrepancy occurs and when the SDR is submitted, the more difficult it is to find supporting documentation and informed personnel.

Items with no demand for 4 years, including the system support buyout period, may be processed for disposal.

SDRs are more easily resolved when they are submitted promptly. Report to Congress - Diversions.

While the language of AECA, section 21 i pertains only to shipments from stocks, impacts can occur when the Department of Defense diverts materiel from production. The purchaser should have a minimum of 2 years to place a final order for secondary items to support the system for its remaining useful life.

The diversion or withdrawal must not significantly lower the operational readiness of U. Once the procurement lead-time elapses, the backorder is eligible for release. Forces to meet high priority FMS requirements. For defense services, the purchaser agrees to submit an SDR no later than one year after the end of the scheduled period of performance of the defense service.

SDRs must be submitted by the purchaser within the contractor warranty timeframe, even when the warranty timeframe is less than one year after delivery or passage of title to the defense articles or less than one year after the scheduled period of performance of the defense service. SDRs submitted beyond these timeframes will be disallowed by the USG unless the USG determines that unusual and compelling circumstances involving latent defects justify consideration of the claim.

If an item is supported by direct vendor delivery, prime vendor, or contractor custody inventory, the requisition may be processed without delay, as long as the contract allows Security Assistance orders and U.

After this time period, the following are authorized: However, no Presidential report is required with respect to supply action under a sales contract where the supply action is altered in order to avoid a significant adverse effect on U. AECA, section 21 i also applies when the significant adverse effect becomes apparent after a sales contract is concluded.

Supply discrepancies result from shortages or overages, improper packing or marking, duplicate shipments, incorrect items, and condition or quality discrepancies, including damage, prior to release to the carrier by the originating shipper. When the Secretary of Defense advises the President of the requirement for a report to Congress, the Secretary provides the analysis relevant to the justification and certification called for in AECA, section 21 i 1 E.Chapter 6, Foreign Military Sales Case Implementation and Execution discusses how accepted Letters of Offer and Acceptance (LOA) are implemented, executed, or cancelled.

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Discuss the nature of the costs that affect inventory size
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