DRP (Distribution Requirements Planning)

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Definition: 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.

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