TWO AIR FORCE LOGISTICS CENTERS WERE FOUND TO HAVE OVER $50 MILLION IN EXCESS STOCKS ON ORDER FOR ITEMS WITH ABOUT $8 MILLION WORTH OF STOCK ONHAND EXCEEDING CURRENT NEEDS. ALSO THE AIR FORCE STOCK FUND'S OBLIGATIONAL AUTHORITY WAS INFLATED BY AN ESTIMATED $25.5 MILLION. THE GENERAL ACCOUNTING OFFICE RECOMMENDS THAT THE DEFENSE DEPARTMENT ELIMINATE A PERMISSIVE OVERSTOCKAGE POLICY THAT PREVENTS IDENTIFICATION AND CANCELLATION OF PLANNED PURCHASES OF SUPPLIES EXCEEDING REQUIREMENTS, ELIMINATE DUPLICATE REQUIREMENTS IN AIR FORCE PURCHASE COMPUTATIONS, REQUIRE MORE EFFECTIVE OR TIMELY IDENTIFICATION AND CANCELLATION OF EXCESS REQUIREMENTS, AND FILL WAR-READINESS MATERIAL AND FOREIGN MILITARY SALES REQUIREMENTS FROM AVAILABLE ASSETS. FURTHER, THE COST OF ISSUING MANY LOW-COST ITEMS EXCEEDED THE SALES REVENUE RECEIVED FOR THOSE ITEMS. THE LARGE VOLUME OF THESE ISSUES MADE YEARLY BY AIR FORCE DEPOTS COULD BE REDUCED SUBSTANTIALLY AND SIGNIFICANT SAVINGS IN WAREHOUSE HANDLING COSTS COULD BE REALIZED BY ESTABLISHING MORE ECONOMICAL UNITS OF ISSUE. THE UNITS OF ISSUE OF LOW-COST ITEMS SHOULD BE REVIEWED, WITH CONSIDERATION GIVEN TO INCREASING THE UNIT OF ISSUE QUANTITIES IN SUPPLY CATALOGS TO MINIMUM COMMERCIAL STANDARD PACKS WHERE FEASIBLE, REQUIRING THAT UNIT PACK QUANTITIES BE DETERMINED IN ACCORDANCE WITH PRESCRIBED STANDARDS, AND ESTABLISHING MORE ECONOMICAL UNITS OF ISSUE WHEN NEW ITEMS ARE ENTERED IN THE SUPPLY SYSTEM. THE APPENDIX CONTAINS THE DEPARTMENT OF DEFENSE RESPONSE TO REPORT RECOMMENDATIONS. TABULAR DATA ARE PROVIDED. (AUTHOR ABSTRACT MODIFIED--RCB)