A perceived requirement to maintain sufficient production capability to replenish ordnance materiel used during hostilities emerges as one of the most important, perhaps the most important, justifications for maintaining government ownership of an organic industrial base. Although an overall analysis of the options for the Army's industrial base may be undertaken with only a general discussion of the replenishment requirement, the importance of the subject requires a more detailed discussion. This appendix serves that purpose.
Our discussion of replenishment begins by describing current policy and how implementation of current policy has justified the retention of the government's organic industrial base. We also compare the policy for missile production and replenishment with that of conventional ammunition.1 Finally, we outline and recommend an integrated replenishment policy that treats the maintenance of a replenishment capability as a separate good or service that must be justified, planned, and budgeted for in the annual budget cycle.
Replenishment is the replacement of consumed stock. Consumption may be the result of use, disrepair, destruction, or obsolescence. For ammunition and other ordnance materiel, replenishment typically refers to the replacement of stocks expended, lost, destroyed, or degraded after a military conflict. Replenishment has to do with replacing stocks that have already been consumed and occurs after conflicts and in preparation for other potential, but not imminent,____________________