Army units must be ready to deploy rapidly in the event of a contingency, which creates challenges for the initial sustainment of deployed units, especially during the first 45 to 60 days or so it takes the first ships to arrive from CONUS. Because many items have lengthy procurement lead times, the baseline level of inventory will sometimes run out in the face of higher demand before increased deliveries begin. Stocks of war reserve secondary items (WRSI) within Army Prepositioned Stock (APS) are designed to address the two issues of production surge response time and competition for airlift early in a contingency. However, given the breadth of Army's budget priorities, funding for WRSI stocks often falls short of the total calculated requirement, and the Army has lacked a formal method for prioritizing which items to stock. Therefore, as part of an ongoing, formal process for determining WRSI stocks around the world, the Army asked the RAND Arroyo Center to develop techniques to prioritize the use of a $467 million FY 2007 budget for WRSI materiel for a Northeast Asia contingency scenario. RAND provided a quick-turn, 60-day product that (1) used empirical demand data to derive forecasts of the potential contingency demands, (2) determined which items should be forward positioned versus stored in CONUS and delivered via airlift, and (3) allocated the budgeted funding to maximize the WRSI inventory investment value with respect to readiness and reduced strategic airlift early in the contingency.

Preface / Figures / Tables / Summary / Acknowledgements / Abbreviations / Introduction / Identification of candidate items. The purpose of WRSI inventory -- Criteria for candidate item selection -- Forward positioned NIINs / Resource allocation methodology. Need to account for inventory held to support training -- Contingency demand data -- Computation of the training demand offset -- Application of the training demand offset -- Production offsets -- Construction of benefit functions -- Readiness drivers receive additional benefit -- Combining benefit functions creates a more robust solution -- Comparison across benefit functions / Solutions and conclusions. Two solutions -- Conclusions and recommendations / Appendix A: Changes in demands with the onset of Operation Iraqi Freedom / Appendix B: Details of the resource allocation methodology.