[Code of Federal Regulations]

[Title 41, Volume 2]

[Revised as of July 1, 2005]

From the U.S. Government Printing Office via GPO Access

[CITE: 41CFR101-27.304]



[Page 123]

 

           TITLE 41--PUBLIC CONTRACTS AND PROPERTY MANAGEMENT

 

          CHAPTER 101--FEDERAL PROPERTY MANAGEMENT REGULATIONS

 

PART 101-27_INVENTORY MANAGEMENT--Table of Contents

 

             Subpart 101-27.3_Maximizing Use of Inventories

 

Sec. 101-27.304  Criteria for economic retention limits.



    If a long supply continues to exceed 10 percent of the total stock 

of an item despite efforts to redistribute the long supply as provided 

in Sec. 101-27.303-2, the inventory manager shall establish an economic 

retention limit for the item in accordance with the provisions of this 

Sec. 101-27.304. An economic retention limit is the maximum quantity of 

an item that can be held in stock without incurring greater costs for 

carrying the stock than the costs for disposal and resulting loss of 

investment. The economic retention limit shall be used to determine 

which portion of the inventory may be economically retained and which 

portion should be disposed of as excess.



[41 FR 3858, Jan. 27, 1976]