DRP (Distribution Requirements Planning) - Meaning & Definition

Published by MBA Skool Team, Last Updated: June 09, 2012

What is DRP (Distribution Requirements Planning)?

Distributions Requirements Planning is the method used by supply chain entities to plan orders in the whole supply chain taking into account the inventories to be kept along with buffer or safety stock, placing the orders with the manufacturer to replenish inventories to meet customer orders, etc.

It is similar to materials requirements planning(MRP) except that MRP is used in manufacturing companies and DRP is used in logistics companies.

DRP tries to efficiently carry out the whole process of completing customer orders byminimizing shortages and reducing the overall costs comprising of ordering, transporting and inventory holding costs.

This article has been researched & authored by the Business Concepts Team. It has been reviewed & published by the MBA Skool Team. The content on MBA Skool has been created for educational & academic purpose only.

Browse the definition and meaning of more similar terms. The Management Dictionary covers over 2000 business concepts from 5 categories.

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