Extracting Priorities of Price Reduction for Military Supplies using AHP Analysis

Purpose: Although the price reduction policy is established for military supplies, it is more focused on general military items. Therefore, it is hard to apply the current price reduction policy directly to the major weapon system. The purpose of this study is to develop an evaluation model which generates appropriate outputs for price reduction of military supplies.Methods: To improve the current policy, we first analyze the relevant policies of price reduction of similar organizations. We gather the opinions of related organization through survey including DAPA, Logistics Command, DTaQ and Defense industry companies. Then, we develop a price reduction model based on the analytic hierarchical process(AHP) method to find out important factors for price reduction.Results: The results of AHP analysis show that the important factors when applying price reduction of military supplies. From the analysis, the proposed method effectively generates the amounts of price reduction for the nonconformance items.Conclusion: The results of this research will be used as guidelines to improve military supplies policy of price reduction.