Determining Return Need
This chapter discusses determining return
The PSP Support Manager must ensure that the
correct types of returns are available in the quantity needed
to accomplish the Examination Plan (Plan). The PSP Support
Manager must determine the number, class, activity code, and
Market Segment of returns needed. To facilitate that effort, a
Return Needs Analysis and a Return Starts Analysis should be
completed on a monthly basis.
Return Needs Analysis
The current available inventory and
projected return needs should be analyzed on a monthly basis.
Return needs for each category, i.e., IMF and BMF, should be
analyzed separately, by POD, to determine the number of
returns needed. Analyzing by POD will prevent shortages in
those PODs with staffing imbalances. IMF return needs for
Field Examination and Office Examination should be determined
It generally takes 4–6 months for a return
order to be delivered for classification, therefore, the PSP
must plan well in advance. The Needs Analysis should project
future requirements for 4-6 months.
Training—PSP should always be aware of
training needs. Stay in close communication with the SBSE Area
Training Coordinator. A separate analysis must be done for
training needs early enough to ensure that returns are
delivered and classified timely.
A proper analysis should take the following
Current number of examiners in each
POD. Sources: Area or Territory staffing charts,
Inventory stored at the Centralized
Files and Scheduling Unit at the Service/Customer
Campus, status 08. Sources: Table 1 and Table 2.
Current status 10 inventory in each
POD, by Activity Code. Sources: Table 36, AIMS Open Case
Database, ERCS, etc.
Inventory stored in PSP in statuses 06
and 08, i.e., information gathering projects (IGP’s),
Preparer Projects, Non-filers, etc.
Determine if there are any return
orders that have been approved/processed, but have not
been classified and/or added to either the Centralized
Files Database or the area inventory. If so, these
returns should be considered as available inventory,
giving adequate consideration to the Area’s select
rate. (Computation: Returns ordered X Delivery Percent X
Consider the related/multi-year pickup
rate, if significant. For IMF, remember to consider
related pickups as a result of starting Partnership and
Sub-S corporate returns.
Often, group managers will survey
returns without adequate notification to PSP. Other
managers will hold inventory that they do not wish to
examine. If this is true for the area, then status 10
inventory should be "discounted" by a
comfortable percentage. CF&S inventory should be
"discounted" as you approach the time to
excess survey returns.
The average number of returns needed
for each POD, excluding specialty groups, for the 4–6
month period of the analysis. Source: Contact managers
for their input regarding the number of returns they
will need for the next 4–6 months. Also, consider
determining the average return starts from Table 36.
(Computation for average return
starts per agent using Table 36: Total number
of returns started for each group in a POD for a 12
month period/Total number of agents in each POD).
(Computation for average number of
returns needed: Number of agents X average
return starts per agent X 4 (or 6) months.)
Once the number of returns needed has been
determined, an analysis to identify the category or activity
codes needed to meet the Plan is in order.
Return Starts Analysis
After determining the number of returns
needed, the PSP Support Manager should determine the return
category, Market Segment, and activity codes needed to balance
accomplishment of the Plan. The number of returns started each
month must be monitored to maintain the optimal base inventory
level. A tool that will facilitate this effort is a Return
A Return Starts Analysis analyzes the number
of returns that have been started during the fiscal year, by
return category and activity, and projects the number of
returns that will need to be started for the remainder of the
An effective Return Starts Analysis
generally includes the following by activity code:
Planned returns. Calculation: (Planned
DESYs X hours in a staff year)/District or National
Rate). Sources: Examination Plan, Table 37.
The average number of returns that
need to be input each month. Calculation: (Planned
The Turnover rate and Base Inventory.
Calculate the number of returns required to realize the
Plan DESYs for each activity code. Calculation:
((Planned DESYs X hours in a staff year)/Plan rate).
Sources: Examination Plan, Table 37, Table 36.
Then calculate the Turnover Rate for
each activity code. The turnover rate is the number of
times, in one year, that a return will be closed from
work in process. Calculation: (Total closures from
Status 12/(Total Status 12 Ending Inventory/12)).
Sources: Table 37, Table 36.
Note: Turnover months is the number of
months it will take for a return to be closed from work
in process. Calculation: (12/Turnover Rate).
Calculate the base inventory required
for each activity code. Base inventory is the optimal
level of work in process necessary to accomplish the
Plan. Calculation: (Plan returns/Turnover rate).
Base inventory variance. The
difference between base inventory returns and current
work in process returns. Calculation: (Base
Inventory—Current work in process Inventory). Sources:
Table 37, Table 36, AIMS Open Case Database.
Average return starts. Source: Table
37 or Table 36.
Average starts needed. Calculation:
(Planned returns/ 12).
Starts needed each remaining month to
balance the Plan. Calculation: ((Planned returns—Total
return starts)/months remaining in the fiscal year).
Sources: Plan, Table 37 or Table 36.
Now that the number of returns needed each
remaining month to balance the Plan have been determined, by
return category and activity code, the PSP Support Manager
must determine if there is sufficient inventory on hand. If
sufficient inventory is not on hand for each class/activity
code, an order may be necessary.
Note that the Return Starts Analysis may
indicate on an area level that returns are not needed.
However, be sure to review the Return Needs Analysis to
determine if a particular POD requires inventory.
Deciding to Order
The Return Needs Analysis helps to determine
if there is a need for additional inventory in the various
PODs, and the number needed. The Return Starts Analysis helps
to determine the number of returns in each category/activity
that need to be started each month to ensure accomplishment of
a balanced Plan. Either one of these analyses, or both, could
indicate a need to order returns. However, there are other
considerations, with regard to the class or activity of the
returns to be ordered:
Productivity. Generally, there is
sufficient flexibility built into the monitoring of Plan
accomplishments to allow the PSP Support Manager to
over/under accomplish line items within the individual,
corporate, and partnership categories. This flexibility
is usually geared toward productivity.
Grade level of the agents in the POD
for which returns will be ordered.
Monitoring Unassigned and Unstarted Inventory
The PSP Support Manager is responsible for
monitoring unassigned inventories (Status 08), assigned-no
time applied (Status 10), and work-in-process inventories. The
monitoring responsibility should be accomplished through the
use of the following reports:
Table 36—Service/Customer Service
generated monthly report
Table 37—Monthly report MCC
Inventory and Delivery Reports
Analysis of DIF Scores for Returns
stored in Centralized Files and Scheduling
Centralized Files and Scheduling
Examination Returns Control System (ERCS)
Unassigned inventories (Status Code 08)
should be maintained throughout the fiscal year. Generally,
inventory levels should not exceed needs for 3–4 months.
Unassigned inventories in Status Code 10
should be kept to a minimum to allow for a quicker change of
direction to meet program needs.
The following objectives are accomplished
through monitoring inventories:
A return within the transportation market
segment is needed to fill a group return order, however,
there is a return with a higher DIF score in manufacturing.
In this situation it is permissible to assign the
transportation return. The example assumes that both returns
are above the DIF cut-off score and there is no focus on a
particular market segment in deference to other market
Non-DIF returns (Corporation,
Partnership, Fiduciary, etc.) will be stored either in
centralized files in the service/customer service
center, or in the area office based on the assignment
priority code. Within each priority code category,
returns will be assigned on a first-in, first-out basis.
Returns are assigned to examination
groups in a manner that will facilitate compliance with
examination cycle limitations.
Allows you to monitor group return
orders in PODs and compare to status 10 in other groups
in the POD. It also is needed to compare with group
surveys to determine if groups are in need of inventory
or have poor survey practices.