•Logical extension of manufacturing requirement planning (MRP).
•Operates in an independent environment where uncertain customer demand determines inventory requirements.
•Requires forecast for each distribution centre and SKU as well as adequate lead-time to allow product movement.
•Errors may creep in because of prediction of demand at wrong location or at wrong time.
•Requires consistent and reliable performance cycles for movement between distribution facilities.
•DRP/MRP system integrates finished goods, work-in-process, and materials planning.
•DRP provides a schedule for each SKU and each distribution facility.
•For each planning period, the schedule will report the following:
-Gross requirements reflecting demand from customers being catered to by different distribution facilities.
-Scheduled receipts i.e.replenishment shipments planned for arrival at the distribution centre.
-Anticipated week ending total deliveries.
-Projected on-hand inventory i.e. prior week’s on-hand inventory- current week’s gross requirement + scheduled receipts.
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