Which of the following statements about drp is not true?
Options:
A. the goal of a DRP system is small and frequent replenishment within the bounds of economical ordering and shipping. B. Effective use of DRP requires an integrated information system to rapidly convey planned order releases from one level to the next. C. The DRP procedure starts with the forecast at the supplier level D. When dependent techniques are used in the supply chain, they are called distribution resource planning (DRP) |
The Correct Answer Is:
C. The DRP procedure starts with the forecast at the supplier level
Let’s break down each statement and clarify why the correct answer is C and why the other options are not accurate.
Correct Answer Explanation: C. The DRP procedure starts with the forecast at the supplier level.
This statement is not true. In Distribution Requirements Planning (DRP), the process typically starts with the demand forecast at the customer or retail level. DRP aims to match inventory with expected demand. It’s focused on managing the flow of finished goods from the manufacturer to the end customer or retailer.
Therefore, the forecast usually begins at the customer end, considering historical data, market trends, and other relevant factors influencing customer demand.
To further clarify why the statement “The DRP procedure starts with the forecast at the supplier level” is incorrect, it’s important to highlight that DRP primarily focuses on the efficient management of finished goods or products from their point of origin, typically the manufacturer or distribution center, to the end customer.
As such, the starting point of the DRP process lies in forecasting demand at the customer end. This forecasting considers factors such as consumer behavior, market trends, historical data, and sales patterns to determine the quantity and timing of product replenishment.
Beginning the process at the supplier level would not align with the core purpose of DRP, which is to ensure the availability of products where and when they are needed by end customers or retailers.
Now, let’s go through the other options:
A. The goal of a DRP system is small and frequent replenishment within the bounds of economical ordering and shipping.
This statement aligns with the essence of DRP. DRP aims to optimize inventory levels by ensuring that goods are replenished in smaller, more frequent quantities to meet demand while minimizing excess inventory costs.
It seeks to strike a balance between ordering and shipping quantities that are both economically viable and fulfill customer needs.
B. Effective use of DRP requires an integrated information system to rapidly convey planned order releases from one level to the next.
This statement is accurate. DRP heavily relies on an integrated information system to efficiently communicate and relay planned order releases across different levels of the supply chain.
This integration ensures timely and accurate information flow, facilitating effective decision-making regarding inventory replenishment and distribution.
D. When dependent techniques are used in the supply chain, they are called distribution resource planning (DRP).
This statement is not entirely accurate. While dependent techniques are indeed a crucial aspect of DRP, the term ‘Distribution Resource Planning’ specifically refers to a broader approach that incorporates both dependent and independent demand planning techniques.
DRP primarily deals with the distribution side of supply chain management, focusing on ensuring the right products are in the right place at the right time.
In summary, the correct answer, C, is not accurate because DRP typically starts with the forecast at the customer or retail level rather than at the supplier level. The other statements (A, B, and D) either accurately depict the goals and functionalities of DRP or capture related concepts within supply chain management, albeit with some nuances.
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