§ 101-25.101-2 Supply through storage and issue.

The following criteria shall govern in determining whether an item can be most advantageously supplied through storage and issue to use points: (a) The item shall be physically adaptable to storage and issue and of such a character that it is feasible to forecast overall requirements of the use points served with reasonable accuracy; (b) Rate of use and frequency of ordering at use points shall be sufficient to warrant storage and issue; (c) The rate of deterioration or obsolescence shall be sufficiently low to avoid unnecessary loss; and (d) Conditions exist where any of the following factors require supply through storage and issue (except that dangerous commodities of high weight and density, or commodities highly susceptible to damage normally should not be considered for supply through storage and issue unless one or more of such factors are determined to be of overriding importance)— (1) Where price advantage through bulk buying is sufficient to render storage and issue more economical, all costs, both direct and indirect, considered. (2) Where close inspection or testing is necessary to secure quality, or where repetitive inspection and test of small lots are prohibitive from the standpoint of cost or potential urgency of need. (3) Where advance purchase and storage are necessitated by long procurement leadtime. (4) Where an item is of special manufacture or design and is not readily available from commercial sources. (5) Where an adequate industry distribution system does not exist to assure availability at use point. (6) Where volume purchases are necessary to secure timely deliveries and advantageous prices. (7) Where market conditions are such that supply through storage and issue is required to assure adequate supply. (8) Where stocking of supplies and equipment necessary for implementation of emergency plans is required for an indefinite period.