MSD

The Materiel Support Division is an element of the AFWCF Air Force Working Capital Fund. The MSD Materiel Support Division - an element of the Air Force Working Capital Fund (AFWCF) that funds the procurement and repair of USAF-managed repairable and consumable spares. funds the procurement and repair of USAF United States Air Force.-managed repairable and consumable spares. A one-price rule applies for MSD pricing and sales. This means separate and distinct prices are not established for each customer. FMS Foreign Military Sale. customers pay the same MSD prices that USAF users pay.

The MSD makes sales to USAF and FMS customers at the Standard Price and at the Exchange Price.

The formula for each is:
(a) Standard Price equals LAC Latest Acquisition Cost - the latest acquisition cost for the item based on the most recent representative procurement. For FMS, the LAC is used to value the CLSSA FMSO I case. plus OCR Operational Cost Recovery - the MSDs operating costs. (1). They include ALC operating costs such as manpower, warehousing costs, transportation costs, and capital investment. Also included are costs that are downward directed from HQ USAF to the ALCs for inclusion in the computation of the Standard, Exchange, and Unserviceable Asset Price. The downward directed costs are other agency costs (for example DLSC and DASSO), and depreciation, inflation, plus others. (2). Operational Cost Recovery (OCR) is divided between sales at LAC and sales at LRC. For example, if 40% of sales are LAC sales, 40% of OCR will be included in the standard price. Likewise, if 60% of sales are LRC sales, 60% of OCR will be included in the exchange price. Therefore, there will be LAC OCR and LRC OCR. ;
(b) Exchange Price equals Latest Repair Cost plus OCR plus MCR Materiel Cost Recovery - to fund reprocurement of materiel primarily for replacement of depot maintenance condemnations. MCR is allocated by Supply Chain Manager. For example, if a Supply Chain Manager manages 1000 items and 10 of the items have condemnations; the condemnation costs will be spread over all 1000 items. . These costs and prices are available via supply catalog information contained in various data systems and cataloging products such as SAMIS, SNUD Air Force Stock Number User Directory., and FEDLOG.

Definitions

• Standard Price - CSAG Consolidated Sustainment Activity Group normal (non-repair and replace) requisition shipments to the FMS customers are billed the standard price.
  The standard price formula is:
  Latest Acquisition Cost (LAC)
  + LAC Overhead Cost Recovery (OCR)
  = Standard Price

• Exchange Price - CSAG repair and replace (H-Coded) requisition shipments to the FMS customers are billed the Exchange price.
  The exchange price formula is:
  Latest Repair Cost
  + Latest Repair Cost Direct Allocable Cost Recovery (DACR)
  + Materiel Cost Recovery (MCR)
  = Exchange Price

• Latest Acquisition Cost (LAC) - the latest acquisition cost for the item based on the most recent representative procurement. For FMS, the LAC is used to value the CLSSA Cooperative Logistics Supply Support Arrangement FMSO Foreign Military Sales Order I case.

• Latest Repair Cost: the latest repair cost for the item.

• Unserviceable Asset Price (UAP Unserviceable Asset Price - used when an unserviceable MSD item is shipped to an FMS country. Shipment of unserviceable items can occur in response to CLSSA Drawdown Requisitions, and occasionally the FMS customer may wish to requisition an unserviceable item. The UAP can be calculated in two ways: Carcass Cost + LAC OCR = Unserviceable Asset PriceStandard Price - LRC = Unserviceable Asset Price ) - used when an unserviceable CSAG item is shipped to an FMS country. Shipment of unserviceable items can occur in response to CLSSA Drawdown Requisitions, and occasionally the FMS customer may wish to requisition an unserviceable item. The UAP can be calculated in two ways:

  Carcass Cost + LAC OCR = Unserviceable Asset Price

  OR

  Standard Price - Latest Repair Cost = UAP

• Carcass Cost - the value of an unserviceable CSAG item in the inventory. The sale of the item would be at the Unserviceable Asset Price.

• Mark-Up Price - this price is not used for the FMS program. It is used to bill a USAF base maintenance activity that does not turn in an unserviceable item after being issued a serviceable at exchange price.

• Operational Cost Recovery
  (1) OCR is the CSAG's operating costs. They include ALC Air Logistics Command - code found in the ITIES database results list and represents the organization or agency that was originally responsible for maintaining the applicable technical order. operating costs such as manpower, warehousing costs, transportation costs, and capital investment. Also included are costs that are downward directed from HQ USAF to the ALCs for inclusion in the computation of the Standard, Exchange, and Unserviceable Asset Price. The downward directed costs are other agency costs (for example DLSC Defense Logistics Services CType. and DASSO), and depreciation, inflation, plus others.
  
  (2) OCR is divided between sales at LAC and sales at Latest Repair Cost. For example, if 40% of sales are LAC sales, 40% of OCR is included in the standard price. Likewise, if 60% of sales are Latest Repair Cost sales, 60% of OCR is included in the exchange price. Therefore, there is LAC OCR and Latest Repair Cost OCR.

• Materiel Cost Recovery (MCR) - funds the re-procurement of materiel primarily for replacement of depot maintenance condemnations. MCR is allocated by Supply Chain Manager. For example, if a Supply Chain Manager manages 1,000 items and 10 of the items have condemnations, the condemnation costs are spread over all 1,000 items.

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