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Distribution Requirements Planning

Distribution requirements planning (DRP) is a technique used to efficiently manage incoming and outgoing inventories within a supply chain. The DRP assists users in setting inventory control parameters and calculating requirements over a period of time. By phasing in orders over a period, DRP ensures stock is available when required but not at excessively high levels that waste space and money by accommodating too much inventory.

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38 views1 page

Distribution Requirements Planning

Distribution requirements planning (DRP) is a technique used to efficiently manage incoming and outgoing inventories within a supply chain. The DRP assists users in setting inventory control parameters and calculating requirements over a period of time. By phasing in orders over a period, DRP ensures stock is available when required but not at excessively high levels that waste space and money by accommodating too much inventory.

Uploaded by

Deopito Barrett
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Distribution Requirements Planning

Distribution requirements planning, which may also be called distribution resources


planning is a technique to ensure that inventories, both incoming and outgoing are
managed effectively. It is used within the business administration function to
efficiently plan orders within the supply chain. The DRP will assist the user in setting
various parameters for inventory control and then calculate the requirements over a
certain length of time. Orders are phased in over a period, ensuring that stock is
available when required, but conversely stock levels are not so high that there is waste
generated by accommodating too much inventory.

Distribution Requirements Planning Practices

1. The firm forecasts requirements for finished products at the point of demand

2. The firm plans orders within a supply chain

3. The firm sets inventory control parameters like a safety stock

4. The firm intends to reduce lead time

5. The firm uses a method of handling stock replenishment

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