Pseudo-Market for Military Logistics

Ensuring the readiness of the US military has traditionally entailed positioning as many resources (‘iron mountains’) as far forward as possible. This had the advantage that units at the tactical edge did not have to ‘wait’ for what they needed but resulted in costly excess inventory. Budget pressures and changes in the operating environment have pushed the Military to consider more agile and responsive delivery. The result is that not everyone gets what they want right away, raising the challenge of whose requests should be prioritized. In this paper, we propose a model to capture the readiness of military units. We analyze the plausibility of using a pseudo-market to determine these priorities. We identify several attractive properties of our pseudomarket mechanism in terms of the system’s overall readiness, incentive compatibility, and computational complexity.