Distribution resource planning
Distribution resource planning (DRP) is a method used in business administration for planning orders within a supply chain. DRP enables the user to set certain inventory control parameters (like a safety stock) and calculate the time-phased inventory requirements. This process is also commonly referred to as distribution requirements planning.
DRP uses several variables:
- the required quantity of product needed at the beginning of a period
- the constrained quantity of product available at the beginning of a period
- the recommended order quantity at the beginning of a period
- the backordered demand at the end of a period
- the on-hand inventory at the end of a period
DRP needs the following information:
- the demand in a future period
- the scheduled receipts at the beginning of a period
- the on-hand inventory at the beginning of a period
- the safety stock requirement for a period
Feigin, G.E., Katircioglu, K., Yao, D.D.: Distribution Resource Planning systems: a critique and enhancement.