Distribution resource planning (DRP) is a method used in business administration for planning orders within a supply chain

Supply chain

A supply chain is a system of organizations, people, technology, activities, information and resources involved in moving a product or service from supplier to customer. Supply chain activities transform natural resources, raw materials and components into a finished product that is delivered to...

. DRP enables the user to set certain inventory control parameters (like a safety stock) and calculate the time-phased inventory requirements. This process is also commonly referred to as distribution requirements planning.

DRP uses several variables:

• the on-hand inventory at the end of a period.
• the backordered demand at the end of a period.
• the required quantity of product needed at the beginning of a period.
• the constrained quantity of product available at the beginning of a period.
• the recommended order quantity at the beginning of a period.

DRP needs the following information:

• the demand in a future period.
• the scheduled receipts at the beginning of a period.
• the safety stock requirement for a period.
• the on-hand inventory at the beginning of a period.