Distribution Requirements Planning (DRP)
In logistics, Distribution Requirements Planning (DRP) is a system of determining demands for inventory at distribution centers and consolidating demand information in reverse as input to the production and materials system.
DRP systems use historical sales data to forecast future demand and help businesses make better decisions about what products to produce and how much of them to produce. Historically, DRP was used primarily by retailers, but it is now also used by manufacturers and distributors.
- The goal of DRP is to optimize stock levels while minimizing costs. There are a number of different DRP software programs on the market, but all work to achieve the same goal: to help businesses make better decisions about their inventory.
- One of the benefits of using a DRP system is that it can help businesses react quickly to changes in demand. For example, if a product suddenly becomes popular, the DRP system can help the business increase production of that product to meet the new demand. Conversely, if a product becomes unpopular, the DRP system can help the business reduce production of that product.
Overall, using a Distribution Requirements Planning (DRP) system can be helpful for businesses in terms of minimizing costs and ensuring that they have the right amount of inventory on hand to meet customer demand.
Related Links
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