“Education in Pursuit of
Supply Chain Leadership”
dp&c Chapter9
Chapter 9
Replenishment in a
Distribution Environment
9-1
dp&c Chapter9
Learning Objectives
•
•
•
•
•
•
•
•
Describe distribution channel dependencies
Detail “push” system functions
Detail “pull” system functions
Define distribution requirements planning (DRP)
Decide what to choose: reorder points or DRP?
Explore DRP in a multiechelon environment
Understand the DRP planning grid
Calculate the projected available balance (PAB) and
the DRP grid
9-2
dp&c Chapter9
Learning Objectives (cont.)
• Calculate net requirements and the DRP grid
• Review the DRP planned order generation
• Perform PAB and net requirements recalculation
• Outline the DRP planning process
• Perform a full DRP calculation
• Review supply chain capacity planning
9-3
dp&c Chapter9
Chapter 9
Replenishment in a Distribution
Environment
Inventory
Distribution
Management
Basics
Channel Basics
9-4
dp&c Chapter9
Distribution Channel Dependencies
Product Flow
Plant
Decoupling Point
Information Flow
Replenishment Point
Central
Warehouse
Replenishment Point
Decoupling Point
Local
Warehouse
Replenishment Point
Decoupling Point
Customer
9-5
dp&c Chapter9
“Push” or “Pull”?
Push
Channel
Allocation
Plant
Central
Warehouse
Local
Warehouse
Pull
Demand
Requirement
Customer
9-6
dp&c Chapter9
“Push” System Functions
Aggregate Channel
Demand History
Central Inventory
Planning
Yes
Stock
OK?
No
Review Branch
Order Points
Inventory
Allocation
“Fair-Share”
Allocation
Echelon
Shipment
9-7
Resupply
Order
Supplier
Shipment
Order
Receipt
dp&c Chapter9
“Push” System Functions (cont.)
Warehouses
DCs
55%
Manufacturing
Plant
45%
60%
Forecasting –
Aggregate
Requirements
40%
65%
Production
Lot Size
Allocation
35%
Allocation
9-8
dp&c Chapter9
Advantages of a Push System
Performance
Measurement
Enables performance management of
the entire supply channel
Central Planning
Enables channel inventory planning to
be centralized in a single plan
Cost Reductions
By centralizing inventory planning and
deployment, planners can remove
planning redundancies
Safety Stock
Control
Push systems cut safety stocks by
centralizing them at supply DCs
9-9
dp&c Chapter9
“Push” System Allocation – Example
Forecast Periods
National forecast
Regional forecast
Region 1
Region 2
Region 3
Region 4
1
2
3
4
5
6
7
8
Percent
100% 15,000 15,000 18,000 18,000 19,000 19,000 20,000 21,000
12% 1,800 1,80015,000
2,160 x 2,160
12% =2,280
1,8002,280
units 2,400 2,520
28% 4,200 4,200 5,040 5,040 5,320 5,320 5,600 5,880
38% 5,700 5,700 6,840 6,840 7,220 7,220 7,600 7,980
22% 3,300 3,300 3,960 3,960 4,180 4,180 4,400 4,620
100%
Region 1 Area forecast Area 1
Area 2
Area 3
Area 4
40%
25%
15%
20%
100%
720
450
270
360
720
1,800
x864
40% 864
= 720 912
units
912
570
342
456
960
600
360
480
1,008
630
378
504
Region 1, Area 1,
Store forecast
Store 1
Store 2
Store 3
Store 4
30%
15%
50%
5%
100%
216
108
360
36
216
720
108
360
36
288
144
480
48
302
151
504
50
Region 1, Area 2,
Store forecast
Store 1
Store 2
20%
15%
43
32
43
32
58
43
60
45
450
270
360
540
324
432
540
324
432
570
342
456
274
x 259
30% =259
216 units
9-10
130
432
43
130
432
43
137
456
46
274
137
456
46
52
39
52
39
55
41
55
41
dp&c Chapter9
“Pull” System Functions
Local Facility
Stock Status
Customer
requirements
Stock
OK?
Order point/
DRP
Shipment
Resupply Order
Interbranch
shipments
DRP
Interbranch
resupply order
Distribution
Center
Plant
Plant
Stock
No
No Plant
Resupply Order
9-11
Order Point
Purchase
Receipt
dp&c Chapter9
“Pull” System Functions (cont.)
Warehouses
DCs
Manufacturing
Plant
Master
Schedule
OP
DRP
Plant
MRP
Order
Shipment
Planned
Orders
Order
Shipment
9-12
Planned
Orders
dp&c Chapter9
Advantages of a Pull System
Planning
Simplicity
Planning is simplified because there is
no centralized planning functions. Each
facility does it own planning
Turnover
Because facilities calculate their exact
requirements, push system stock
excess is removed
Overhead Cost
Reduction
By decentralizing planning, centralized
planning overheads can be reduced
Use of ROP and
DRP techniques
Pull system enable the effective use of
ROP and DRP planning methods
9-13
dp&c Chapter9
BOMs and BODs
Bill of Material
Product A
Component A
Component B
Component C
Warehouse 1
Warehouse 2
Warehouse 3
Bill of Distribution
Supply DC
9-14
dp&c Chapter9
Purchased Finished Product Flow
Lead Time (LT) = days
Central DC
LT=4
Regional
DC2
LT=3
Warehouse 1
Outside
Supply Source
LT=4
Regional
DC1
LT=3
LT=5
Warehouse 2
LT=3
Warehouse 3
LT=3
Warehouse 4
LT=3
Warehouse 3
LT=2
Customer
9-15
dp&c Chapter9
Reorder Point Channel Management
Warehouse 1
Warehouse 2
OP
SS
OP
SS
OP
SS
Resupply order LT=3
Resupply order LT=3
Warehouse 3
Resupply order LT=3
Quantity
Central DC
Regional DC1
Inventory
LT=4
Resupply
order
X
OP
Available
Inventory
OP
SS
OP= order point
SS=safety stock
Time
9-16
dp&c Chapter9
Defining Distribution Requirements Planning
(DRP)
The function of determining the need to replenish
inventory at branch warehouses. A time-phased order point
approach is used where the planned orders at the branch
warehouse level are “exploded” via MRP logic to become
gross is
requirements
the supplyingplanning
source. In(DRP)?
the case of
What
distributionon
requirements
multilevel distribution networks, this explosion process can
continue down through the various levels of regional
warehouses (master warehouse, factory warehouse, etc.)
and become input to the master production schedule.
Demand on the supplying sources is recognized as
dependent, and standard MRP logic applies.
9-17
dp&c Chapter9
Manufactured Finished Product Flow
Lead Time (LT) = days
Central DC
LT=4
Regional
DC2
LT=3
Warehouse 1
Manufacturing
Plant
LT=4
Regional
DC1
LT=3
LT=25
Warehouse 2
LT=3
Warehouse 3
LT=3
Warehouse 4
LT=3
Warehouse 3
LT=2
Customer
9-18
dp&c Chapter9
Time Phasing – The Heart of DRP
Solving the question of when in the inventory replenishment
equation!!
Product
Lead Time/days
Order Quantity
On Hand Inventory/units
KL-2000-10
2
50
55
1
2
DAILY PERIODS
3
4
5
6
Gross Requirements
20
35
25
25
45
65
Projected Available Balance
35
0
25
0
5
40
50
100
DRP Planned Order Receipt
DRP Planned Order Release
50
50
50
9-19
100
dp&c Chapter9
Chapter 9
Replenishment in a Distribution
Environment
Inventory
Basics of DRP
Management
Basics
9-20
dp&c Chapter9
DRP Grid Rows
DAILY PERIODS
Gross Requirements
1
2
3
115
115
125
DRP In Transit Receipts
200
Projected Available Balance
0
85
0
Net Requirements
115
0
40
DRP Planned Order Receipt
115
0
40
DRP Planned Order Release
40
0
0
9-21
dp&c Chapter9
DRP Period Variations
Day
Requirement
Week
Month
1
2
3
4
5
2
3
4
5
10
10
10
10
10
50
50
50
50
9-22
2
3
4
5
200 200 200 200
dp&c Chapter9
Projected Available Balance Calculation
Product
Safety Stock/units
Min Order Qty/units
Lead Time/months
Lot size/units
KL-2000-10
0
0
2
75
On Hand/units
200
Gross Requirements
1
2
3
4
100
110
125
130
120
-60
-190
-310
7
8
9
10
110
150
135
165
145
-420
-570
-705
-870
-1,015
75
DRP Intransit Receipts
Projected Available Balance
DAILY PERIODS
5
6
100
65
9-23
dp&c Chapter9
Net Requirements Calculation
Product
Safety Stock/units
Min Order Qty/units
Lead Time/months
Lot size/units
KL-2000-10
0
0
2
75
On Hand/units
200
Gross Requirements
1
2
3
4
100
110
125
130
120
Net Requirements
7
8
9
10
110
150
135
165
145
75
DRP Intransit Receipts
Projected Available Balance
DAILY PERIODS
5
6
100
65
-60
-190
-310
-420
-570
-705
-870
-1,015
0
0
60
190
310
420
570
705
870
1,015
9-24
dp&c Chapter9
DRP Planned Order Receipt
Product
Safety Stock/units
Min Order Qty/units
Lead Time/days
Lot size/units
KL-2000-10
0
0
2
75
On Hand/units
200
Gross Requirements
DAILY PERIODS
6
5
1
2
3
4
100
110
125
130
120
7
8
9
10
110
150
135
165
145
75
DRP Intransit Receipts
100
65
15
35
65
30
30
45
30
35
Net Requirements
0
0
60
115
85
45
120
105
120
115
DRP Planned Order Receipt
0
0
75
150
150
75
150
150
150
150
Projected Available Balance
9-25
dp&c Chapter9
DRP Planned Order Release
Product
Safety Stock/units
Min Order Qty/units
Lead Time/days
Lot size/units
KL-2000-10
0
0
2
75
On Hand/units
200
Gross Requirements
DAILY PERIODS
5
6
1
2
3
4
100
110
125
130
120
7
8
9
10
110
150
135
165
145
75
DRP Intransit Receipts
100
65
15
35
65
30
30
45
30
35
Net Requirements
0
0
60
115
85
45
120
105
120
115
DRP Planned Order Receipt
0
0
75
150
150
75
150
150
150
150
DRP Planned Order Release
75
150
150
75
150
150
150
150
0
0
Projected Available Balance
Two day lead-time
offset
9-26
dp&c Chapter9
DRP Recalculation
Product
Safety Stock/units
Min Order Qty/units
Lead Time/days
Lot size/units
KL-2000-10
0
0
2
75
On Hand/units
200
Gross Requirements
1
2
3
4
100
110
125
130
120
7
8
9
10
110
150
135
165
145
75
DRP Intransit Receipts
Projected Available Balance
DAILY PERIODS
5
6
100
65
15
35
65
30
30
45
30
35
Net Requirements
0
0
60
115
85
45
120
105
120
115
DRP Planned Order Receipt
0
0
75
150
150
75
150
150
150
150
DRP Planned Order Release
75
150
150
75
150
150
150
150
0
0
9-27
dp&c Chapter9
Order Policies
Discrete (lot-for-lot)
Fixed period requirements
Discrete above the standard lot size
Incremental above the standard lot size
Multiples of a standard lot size
EOQ models
Min/max order quantity
Lot costing models
9-28
dp&c Chapter9
DRP Safety Stock
Safety Stock = 75 units
Product
Safety Stock/units
Min Order Qty/units
Lead Time/days
Lot size/units
KL-2000-10
0
0
3
200
On Hand/units
275
Gross Requirements
Safety stock
violations
DAILY PERIODS
5
6
1
2
3
4
200
200
230
230
250
7
8
9
10
250
275
275
280
280
200
DRP Intransit Receipts
75
75
45
15
165
115
40
165
85
5
Net Requirements
0
0
155
185
235
85
160
235
115
195
DRP Planned Order Receipt
0
0
200
200
400
200
200
400
200
200
DRP Planned Order Release
200
400
200
200
400
200
200
0
0
0
Projected Available Balance
9-29
dp&c Chapter9
DRP Safety Stock Recalculation
Product
Safety Stock/units
Min Order Qty/units
Lead Time/days
Lot size/units
KL-2000-10
75
0
3
200
On Hand/units
275
Gross Requirements
DAILY PERIODS
5
6
1
2
3
4
200
200
230
230
250
7
8
9
10
250
275
275
280
280
200
DRP Intransit Receipts
75
75
245
215
165
115
240
165
85
205
Net Requirements
0
0
230
60
110
160
235
110
190
270
DRP Planned Order Receipt
0
0
400
200
200
200
400
200
200
400
DRP Planned Order Release
200
200
200
400
200
200
400
0
0
0
Projected Available Balance
Covering planned
order
9-30
dp&c Chapter9
Chapter 9
Replenishment in a Distribution
Environment
Inventory
The
DRP
Management Basics
Calculation
9-31
dp&c Chapter9
Basic DRP Calculation Data Elements
Length of the planning horizon
Size of the planning buckets
Item forecasts by due date
Open customer orders by item by due date
Beginning on-hand quantities by item
Purchase, interbranch, and postponement
orders by item by due date
Replenishment lead times by item
Safety stock by item
Order policy code by item
Supply sources based on the bill of distribution
9-32
dp&c Chapter9
DRP System Outputs
Exception
Reporting
Availability of online displays and dashboards
as a result of the DRP generation
Planned
Orders
The DRP generation provides the planner
with a window into the schedule of planned
order release
Action
Messages
Pegged
Requirements
Generation of action messages to inform the
planner of required planning and scheduling
problems
Pegging enables planners to trace item
resupply orders back to their sources
9-33
dp&c Chapter9
Bucketless DRP Display
Item # KL-2000-10
Safety Stock
Lead time 3 days
OHB
75
275
Gross Reqs
Scheduled
Receipts
Date
Type
Ref #
OHB
01/01/XX
FORECAST
01/08/XX
PUR Ord
01/08/XX
FORECAST
175
01/09/XX
CUST Ord
25
01/15/XX
PLN Ord
01/15/XX
FORECAST
175
01/15/XX
CUST Ord
10
CO#8754457
290
01/15/XX
CUST Ord
15
CO#8754458
275
01/15/XX
CUST Ord
30
CO#8754459
245
200
75
200
PO#789654
275
100
400
CO#8754456
75
PL#76543
475
300
9-34
dp&c Chapter9
Chapter 9
Replenishment in a Distribution
Environment
Inventory
DRP in a MultiManagement
Basics
Echelon
Environment
9-35
dp&c Chapter9
DRP Multiechelon Channel Implosion
Lead Time/weeks
Min Order Qty/units
Order Quantity
On Hand/units
DISTRIBUTION CENTER 1
1
0
600
240
1
PRODUCT
KL-2000-10
Gross Requirements
210
DRP In Transit Receipts
Projected Available Balance
Net Requirements
DRP Planned Order Receipt
DRP Planned Order Release
Lead Time/weeks
30
0
0
0
Min Order Qty/units
Order Quantity
On Hand/units
6
210
7
210
8
210
210
0
0
0
180
0
0
600
570
30
600
0
360
0
0
0
0
0
0
600
390
210
600
0
SUMMARY
PRODUCT
KL-2000-10 1
Distribution Center 1
0
Distribution Center 2
0
Distribution Center 3
250
TOTAL 250
2
0
225
0
225
WEEKLY PERIODS
3
4
5
0
600
0
0
225
0
250 250 250
250 1,075 250
6
600
0
250
850
7
0
225
0
225
8
0
0
0
0
WEEKLY PERIODS
1
2
3
4
5
6
7
8
100
225
150
0
0
0
100
100
100
100
100
100
100
50
0
0
225
175
50
225
0
75
0
0
225
200
25
225
0
100
0
0
0
0
0
0
225
125
100
225
0
DISTRIBUTION CENTER 3
1
0
250
350
PRODUCT
KL-2000-10
Gross Requirements
DRP In Transit Receipts
Projected Available Balance
Net Requirements
DRP Planned Order Receipt
DRP Planned Order Release
WEEKLY PERIODS
3
4
5
210
210
210
DISTRIBUTION CENTER 2
1
Min Order Qty/units
0
Order Quantity
225
On Hand/units
25
PRODUCT
KL-2000-10
Gross Requirements
DRP In Transit Receipts
Projected Available Balance
Net Requirements
DRP Planned Order Receipt
DRP Planned Order Release
Lead Time/weeks
2
210
600
420
0
0
0
1
200
2
200
WEEKLY PERIODS
3
4
5
200
200
200
150
0
0
250
200
50
250
0
0
0
0
250
50
200
250
250
100
150
250
250
6
200
7
200
8
200
150
100
250
250
200
50
250
0
0
0
0
0
Lead Time/weeks
9-36
MANUFACTURING PLANT
2
Min Order Qty/units
550
Order Quantity
1
On Hand/units
25
PRODUCT
KL-2000-10
Gross Requirements
MRP Scheduled Receipts
Projected Available Balance
Net Requirements
MRP Planned Order Receipt
MRP Planned Order Release
WEEKLY PERIODS
1
2
3
4
5
6
7
8
250
550
325
0
0
550
225
250
1,075
250
850
225
0
100
0
0
675
400
150
550
550
0
675
675
550
300
250
550
550
0
550
550
0
325
225
550
0
325
0
0
0
dp&c Chapter9
DRP Planning Process
DRP Generation
Determine
Gross
Requirements
Review
Inventory
Balances
Net
Requirements
Calculation
Total Demand OK?
Quantities OK?
Shortages OK?
Orders OK?
Plan New
Orders
DRP Order Release
9-37
dp&c Chapter9
DRP Order Action Report
Item #
Order #
Order
Quantity
Release
Due
1425
Plan
5,000
01/01/XX
01/14/XX
Release
1551
Plan
5,000
01/07/XX
01/14/XX
No Action
2300
1234
345
4110
Plan
4,500
3320
1267
3345
1275
01/24/XX
07/07/XX
Revised Due
01/07/XX
Action
Message
Expedite
01/14/XX
Release
1,234
01/23/XX
De-Expedite
4,567
01/25/XX
Cancel
9-38
dp&c Chapter9
Chapter 9
Replenishment in a Distribution
Environment
Inventory
Stocking MultiManagement
Basics
Echelon Supply
Channels
9-39
dp&c Chapter9
Selective Stocking
A method of maximizing available
warehouse space in the channel by
determining which items are to be
stocked at what channel echelon level
based on item ABC classification
9-40
dp&c Chapter9
Square-Root Rule
Calculating the advantage gained through a channel
inventory consolidation strategy
CI  SI n
where:
CI is the inventory value if the entire network stock were to
be centralized at n number of stocking locations
SI is the amount of inventory stocked at n distribution
locations
n is the number of stocking points in the channel.
9-41
dp&c Chapter9
Square-Root Rule – Exercise
Objective: Cost benefit of consolidating an item stocked in
10 warehouses to 3 warehouses
Data: Stocking cost of item in 10 warehouses =
US$20,554.80
Formula: CIn3  X 1 n2 / n1
where:
CIn3 = total cost for three facilities
n2 = 3 facilities
n1 = number of existing facilities (10)
X1 = total unit cost for 10 facilities
Solution: CIn3  US$20,554.80 3 / 10  US$11,258.33
9-42
dp&c Chapter9
Push System With Stocking Constraint – Steps
1. Determine the quantity of the production run or supplier purchase.
2. Determine the forecast requirements of each of the channel
locations between the current time and the next expected
production run or supplier purchase.
3. Calculate the adjusted requirements forecast by using the
predetermined stocking target and the forecast error (standard
deviation).
4. Tally the existing on-hand balances at each channel location.
5. Subtract the adjusted requirements forecast from the current onhand balances at each warehouse to arrive at the warehouse’s
net allocation.
6. Sum the net allocations and then subtract it from the total push
quantity determined in step 1.
9-43
dp&c Chapter9
Push System With Stocking Constraint – Steps
7. Apportion the inventory excess over the adjusted requirements
forecast to arrive at the proration of excess.
8. Add each warehouse’s net allocation and the proration of
excess to arrive at the new push allocation for each warehouse.
9. Establish the normal capacity target for storing inventories at
each channel location and the max stock quantity target.
10. Divide the max stock quantity target by the prorated allocation to
arrive at the percent utilization of capacity for each warehouse.
9-44
dp&c Chapter9
Push System Stocking Constraint – Exercise
Objective: Reviewing the impact of an opportunity supply
order
Data: Supplier discount if 55,000 units purchased
Inventory Quantities
Product #
KL-1000-20
Inventory Qty
55,000
Warehouses
1
2
3
4
Total
Forecasted
Forecast Percent
Requirements
5,000
7,000
9,000
12,000
33,000
Forecast Error
(s )
15.15%
21.21%
27.27%
36.36%
9-45
500
1,000
1,500
2,000
Total
Current
Inventory
Balance
2,500
3,000
5,000
6,000
16,500
Service
Percent
Target
90.0%
90.0%
95.0%
95.0%
dp&c Chapter9
Push System Stocking Constraint – Exercise
Objective: Determine forecast allocation
Formula: Forecast + (NORMSINV [Service target]) *
Standard Deviation (s)
Allocation
Warehouses
1
2
3
4
Total
Adjusted
Current Inventory
Requirements
Balance
Forecast
5,640.78
2,500
8,281.55
3,000
11,467.28
5,000
15,289.71
6,000
Totals
40,679.32
Net Allocation
9-46
3,140.78
5,281.55
6,467.28
9,289.71
24,179.32
Proration
Allocation
4,669.80
6,537.72
8,405.64
11,207.52
30,820.68
Adjusted
Allocation
7,810.58
11,819.00
14,872.92
20,497.00
54,999.50
dp&c Chapter9
Push System Stocking Constraint – Exercise
Objective: Determine allocation capacity
Formula: Prorated allocation / max quantity target
Capacity
Stocking
Capacity
Target
Warehouses
1
2
3
4
90.00%
90.00%
95.00%
95.00%
Totals
Max Quantity
Target
8,500
12,000
15,500
20,000
56,000
9-47
Prorated
Allocation
7,810.58
11,819.00
14,872.92
20,497.00
54,999.50
Capacity Percent
of Prorated
Allocation
91.89%
98.49%
95.95%
102.49%
97.21%
dp&c Chapter9
Least-Cost Redistribution
Objective: Restore channel warehouse inventory
imbalances at the least cost
Data: Transportation cost matrix
On-hand
Balance
Warehouse
75
60
-50
50
-60
Chicago
New York
Dallas
Denver
Los Angles
Chicago
$
$
$
$
$
1.45
1.65
1.75
2.05
New York
$
$
$
$
$
1.35
1.85
1.95
2.25
Dallas
$
$
$
$
$
Denver
1.63
1.82
1.65
2.03
$
$
$
$
$
1.70
1.80
1.70
1.25
Los Angles
$
$
$
$
-
2.10
2.40
2.00
1.10
Solution:
On-hand
Balance
Warehouse
75
60
-50
50
-60
Chicago
New York
Dallas $
Denver
Los Angles $
Chicago
New York
Dallas
Denver
Los Angles
81.50
$
91.00
$
-
$
82.50
$
126.00
$
144.00
$
-
$
66.00
-
9-48
-
dp&c Chapter9
“Fair Share” Technique
Objective: Provide branch locations with equal run out
resupply sufficient enough to prevent stock out
Formula 1: Days of total inventory at all facilities
𝐷𝑆 =
𝐴𝑄 +
𝑛
𝑏=1 𝐼𝑏
𝑛
𝑏=1 𝐷𝑏
where
DS = Common days supply for branch inventories
AQ = Inventory units to be allocated from the DC
Ib = Inventory in units for branch b
Db = Daily demand for branch b
9-49
dp&c Chapter9
“Fair Share” Technique (cont.)
Objective: Determine fair share allocation
Formula 2: Calculate fair share allocation
Ab = (DS – Ib/Db)Db,
where
Ab = Amount allocated to branch b
DS = days supply provided for each branch
Ib = Inventory in units for branch b
Db = Daily demand for branch b
9-50
dp&c Chapter9
“Fair Share” Technique – Exercise
Objective: Allocating 200 units across three branches
Data:
Weekly Requirements
Location
DC
Branch A
Branch B
Branch C
Totals
On-Hand
200
30
37
33
300
Week 1
40
50
60
150
Week 2
Week 3
40
50
60
150
9-51
40
50
60
150
Week 4
40
50
60
150
Week 5
40
50
60
150
Daily Usage
8
10
12
30
dp&c Chapter9
“Fair Share” Technique – Exercise (cont.)
Formula 1: Days of total inventory at all facilities
𝐷𝑆 =
𝐴𝑄 +
𝑛
𝑏=1 𝐼𝑏
𝑛
𝑏=1 𝐷𝑏
200 + (30 + 37 + 33)
=
= 10 𝑑𝑎𝑦𝑠
(8 + 10 + 12)
Formula 2: Branch A fair share allocation
Ab = (DS – Ib/Db)Db = ((10 – (30/8)) * 8) = 50 units
Formula 2: Branches B and C fair share allocation
Ab = (DS – Ib/Db)Db = ((10 – (37/10)) * 10) = 63 units
Ab = (DS – Ib/Db)Db = ((10 – (33/12)) * 12) = 87 units
9-52
dp&c Chapter9
Chapter 9
Replenishment in a Distribution
Environment
Inventory
Supply
Chain
Management
CapacityBasics
Planning
9-53
dp&c Chapter9
Supply Chain Capacity Planning
Financial
Estimating
Labor and
Equipment
Capacity
DRP
Transportatio
n
Planning
Warehouse
Space
Planning
9-54
dp&c Chapter9
Costed DRP Inventory Report
Warehouse: Chicago
Date From: 01/01/20XX
Date To: 12/31/20XX
Product Family
On Hand Planned Order Qty
Cost
Projected Value
1425
2,550
15,300 $ 16.50 $
294,525.00
1551
2,250
18,000 $
9.50 $
192,375.00
2300
1,250
14,000 $
4.50 $
68,625.00
4100
900
11,500 $ 42.50 $
527,000.00
3320
250
7,500 $ 35.80 $
277,450.00
5673
11,000
55,500 $
3.65 $
242,725.00
7836
15,000
45,500 $
2.40 $
145,200.00
9835
20,000
100,000 $ 12.50 $
1,500,000.00
3478
8,000
54,000 $ 26.50 $
1,643,000.00
5903
2,000
1,000 $ 13.75 $
41,250.00
2237
3,250
21,000 $ 27.50 $
666,875.00
3410
670
8,500 $ 22.75 $
208,617.50
Totals
67,120
351,800
Totals $
5,807,642.50
9-55
dp&c Chapter9
Transportation Report
Warehouse: Chicago
Date From: 01/01/20XX
Date To: 01/31/20XX
Standard Pallet Cube (inches)
64
Product Family Forecasted Shipments Total Weight (lbs.) Number of Pallets
Cube (pallet)
1425
1,488
11,345
149
9,536
1551
1,688
12,356
169
10,816
2300
1,271
8,525
128
8,192
4100
1,033
8,400
104
6,656
3320
645
4,278
65
4,160
5673
5,542
48,500
278
17,792
7836
5,042
51,000
252
16,128
9835
10,000
1,670
500
32,000
3478
5,167
62,000
259
16,576
5903
250
1,125
25
1,600
2237
2,020
19,357
10
640
3410
765
6,350
77
4,928
Totals
34,910
234,906
2,016
129,024
9-56
dp&c Chapter9
Detailed Shipping Report
Warehouse: Chicago
Standard Pallet Cube (inches)
Week
Item #
1425-01
1
1425-03
1425-04
2300-01
2300-04
5673-01
5673-02
5673-04
9835-02
9835-04
9835-06
9835-07
3410-01
Totals
Date From: 01/01/20XX
64
Quantity
70
35
21
36
43
76
25
48
125
257
310
223
10
1,279
Order Type Weight (lbs.)
CO
280
CO
145
CO
125
CO
148
PLN ORD
153
CO
175
PLN ORD
125
CO
165
CO
245
PLN ORD
450
CO
625
PLN ORD
460
PLN ORD
45
3,141
9-57
Date To: 01/31/20XX
Pallets
7
4
2
4
5
4
2
5
7
13
16
23
2
94
Cube (pallet)
448
256
128
256
320
256
128
320
448
832
1,024
1,472
128
6,016
dp&c Chapter9
Warehouse Space Report
Warehouse: Chicago
Storage Type
Location
Shelf Rack
7010101
Shelf Rack
7010102
Shelf Rack
7010103
Shelf Rack
7010104
Shelf Rack
7010201
Shelf Rack
7010202
Storage Type
Bin
Bin
Bin
Bin
Bin
Bin
Location
6010101
6010102
6010103
6010104
6010105
6010106
Date From: 01/01/20XX
Code
Weight
SR4
1,500
SR4
1,500
SR4
1,500
SR2
750
SR4
1,500
SR4
1,500
Code
B6
B6
B12
B12
B6
B6
Weight
450
450
450
450
450
450
9-58
Date To: 01/31/20XX
Dimensions (ft)
Volume (ft3)
4x8x4
128
4x8x4
128
4x8x4
128
2x8x4
64
4x8x4
128
2x8x4
64
Totals
25,000
Dimensions (in)
6x36x24
6x36x24
12x36x24
12x36x24
6x36x24
6x36x24
Totals
Volume (in3)
5,184
5,184
10,368
10,368
5,184
5,184
1,550,000
dp&c Chapter9
“Education in Pursuit of
Supply Chain Leadership”
dp&c Chapter9
Chapter 9
End of Session
9-59
dp&c Chapter9