AN APPLICATION OF DISTRIBUTION REQUIREMENTS PLANNING IN INVENTORY MANAGEMENT: A CASE STUDY

The objective of this paper is to exhibit the application of distribution requirements planning (DRP) as an aid in managing inventory management. The DRP is considered to suppress its origin (i.e., materials requirements planning), since it has numerous benefits, such as it could minimize shortages, it could reduce associated costs, and it could help to improve customer service. A case study was conducted in a state-owned company in Indonesia that is responsible for handling mining and trade of oil and gas. The company often did miscalculations in the delivery process; thus, the distribution (in terms of time and quantity) is not appropriate to the company’s plan. In order to help the company, the DRP was employed for one particular product of the company. Since the DRP requires accurate forecast data, the autoregressive integrated moving average (ARIMA) model was utilized. The ARIMA model is considered an accurate forecasting technique as it could suit numerous models of time series data. The DRP table shows that the inventory status (both for the company and the retailer) is safe, indicating that the DRP could help the company to overcome the problems.