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Please give a brief reply or opinion on the discussion below: It's about Distribution Requirement Planning (DRP)
The DRP is “a bridge between the intrafirm MPC Systems used to manage internal resources and the interfirm systems used to link members of the supply chain” (Jacobs, pg 447 para 1). DRP is used to pass along demand information from receiving to supply and back again. This type of information can be used to carry information to the market and also provide information on the market to the company. The goal of the DRP is to reduce the cost that is associated with ordering, transporting, and holding goods.
Advantages of DRP & MPS
The right materials are available at the right time
Inventory is controlled better
Decrease in capital cost
Collecting more data for better planning
Disadvantages of DRP & MPS
Data accuracy can cause problems with planning
If no stable process exists results can be inventory level rise or inventory shortages
Service levels can suffer due to inaccurate information.
Expected demand for implants during lead time is ten units and the management keeps a safety stock level of twenty units, the ROP would be thirty units.
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