Gulledge, Thomas with Henry Neimeier, "Functional Economic Analysis of Purchasing at MITRE", 1994
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Functional economic analysis is a modeling approach that provides a uniform basis for analysis and comparison of alternative investment and management practices. The approach takes into account the costs, benefits, and risks associated with new ways of doing business and managing organizations. The entire purchasing process from initial request to final delivery, payment and accounting is being re engineered at MITRE. A complete resourced process flow chart was developed for both the present and proposed systems. An "i think" system dynamics model of both the present and proposed process was developed. The model projects the seasonal workload over the proposed system lifetime. Dynamic normal, overtime, and temporary staffing requirements were calculated. The new system reduced total requisition delay by a factor of ten. This will greatly reduced expediting actions and costs. Multiple data bases and computer systems along the process were combined into a single system. This greatly reduces data entry and reconciliation effort. The new process groups purchase requisitions by type that provides the opportunity for bulk discounts. All these will result in 37 million dollars of saving over a ten year system life.