It is extension of Material Requirement Planning (MRP). It is a process to make the delivery of goods efficient by determining its quantity and the location where it is more required. Basically, it is the application of MRP principles to the distribution environment, integrating the special needs of distribution.
It is utilized by the firms to ensure the availability of right amount of materials at the right time and right place. It uses time phased schedule so that it can ensure the timely production of end product. The key elements in DRP is :
- Current Inventory levels
- Target safety stock
- Replenishment lead times.
- Improvement of the reliability
- It is possible to complete the orders with future orders to create full truck loads.
- It can change to store level demands forecast.
- DRP is also able to anticipate future requirements in the field.
- Customer Service Enhancement.
- Forecast Maintenance
- It only maintains the accurate PI at the store level.
- If inaccuracy at the store level will occur, it will result in the increment level of noise at the warehouse.