warehouse management 1 1

Case Study

Performing a DRP calculation at ABC Electronics.

As the distribution inventory planning manager for ABC Electronics, you have been contacted by the manufacturing plant manager regarding the projected channel demand for a high-volume item stocked everywhere in the company’s distribution channel, the K200-10, DVD video recorder. The manufacturing manager needs to see the projected demand for this product over the next eight weeks.

To begin the process, you have reviewed the bill of distribution kept in ABC’s DRP system and have found that the distribution channel contains three echelons. You have diagramed the distribution channel and it appears as follows:

The DRP planning system also provides some critical information.

1.All of the DCs are distribution facilities only. The plant is the only facility that makes the product.

2.DCs 1 and 2 are supplied only from the Regional DC.

3.The Regional DC is supplied directly from the Manufacturing Plant.

4.All of the facilities in the channel sell product to the customer, including the Manufacturing Plant.

5.Since all of the facilities are subject to independent demand, each facility has a forecast. The forecasts for DC1 and DC2 appear in the gross requirements rows on the DRP grid displayed on the next page. For the Regional DC, the forecast for the eight week planning horizon is 200 units each week. For the Manufacturing Plant, the forecast is also 200 units each week.

6.The DRP grid for the K200-10 item also shows the DRP in transit receipts that are awaiting arrival at each of the facilities.

7.Based on this information, and the planning data provided on the DRP grids displayed on the next page, calculate the projected channel demand on the Manufacturing Plant for item K200-10. Also, assist the manufacturing manager calculate the MRP plan.