Distribution Resource Planning

Abstract

The purpose of a distribution system is to give maximum service to the customer. The structure of the distribution network is designed to achieve this end. If the management of the network is not properly executed, the end result can be poorer service than planned, costly transportation expenses, high levels of inventory, conflicts between network levels, or a combination of any of the above. Prior to implementation of the dependent demand concepts of MRP, many distribution operations were based on reorder point replenishment systems. Products would be ‘pulled’ from supplying centers when the inventory dropped to the reorder point. The reorder point system assumed that the material is available at the supplying center location. If the demand of a single stocking location calls for an even continuous rate, the reorder point system will work. However, if there are multiple stocking locations, each having even, continuous demand, the combination of demands will be lumpy requirements for the supplying facility.