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

PDF

Published: 2021-12-13

Page: 1404-1411


SUSATYO N. W. PRAMONO

Department of Industrial Engineering, Diponegoro University, Semarang, Indonesia.

M. MUJIYA ULKHAQ *

Department of Industrial Engineering, Diponegoro University, Semarang, Indonesia.

MUHAMMAD NAUFAL

Department of Industrial Engineering, Diponegoro University, Semarang, Indonesia.

*Author to whom correspondence should be addressed.


Abstract

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.

Keywords: ARIMA, case study, distribution requirements planning, forecasting, inventory, supply chain management


How to Cite

PRAMONO, S. N. W., ULKHAQ, M. M., & NAUFAL, M. (2021). AN APPLICATION OF DISTRIBUTION REQUIREMENTS PLANNING IN INVENTORY MANAGEMENT: A CASE STUDY. Asian Journal of Advances in Research, 4(1), 1404–1411. Retrieved from https://mbimph.com/index.php/AJOAIR/article/view/2674

Downloads

Download data is not yet available.

References

Martin AJ. Distribution resource planning. Englewood Cliffs, NJ: Prentice Hall; 1983.

Stenger AJ, Cavitano JL. Adapting MRP to the outbound side-distribution requirements planning. Prod Inventory Manage. 1979;20(4):1-14.

Vollmann TE, Berry WL, Whybark DC. Manufacturing planning and control systems. Homewood, IL: Richard D. Irwin; 1988.

Dayanti A, Firdaus MA, Meiriza A, Indah DR, Heryanto A. Implementation of distribution requirement planning in the subsidized fertilizer management system. Proceeding of Sriwijaya International Conference on Information Technology and Its Applications. 2020;532-538.

Marek F. The supply planning in the distribution network using the dynamic programming concept. In Smart and Sustainable Supply Chain and Logistics–Trends, Challenges, Methods and Best Practices. Springer. 2020;339-345.

Syahroni M, Utary AR, Nadir M. Implementasi metode distribution requirements planning (DRP) untuk mendukung strategi supply chain pada PT Yudhistira Cabang Samarinda (in Bahasa Indonesia). Jurnal Ilmu Ekonomi Mulawarman (JIEM). 2018;2(2).

Ho CJ. Distribution requirements planning: a generalised system for delivery scheduling in a multi-sourcing logistics system. Int J Phys Distr Log. 1990;2(2):3-8.

Ho CJ. An examination of a distribution resource planning problem: DRP system nervousness. J Bus Logist. 1992;13(2):125-152.

Maskell BH. Distribution resource planning: Part 2–A practical approach. Manuf Systems. 1988;6(7):64-69.

Chopra S, Meindl P. Supply chain management: strategy, planning, and operation. 6th ed., Upper Saddle River, NJ: Pearson; 2015.

Box GEP, Jenkins GM, Reinsel GC, Ljung GM. Time series analysis: Forecasting and control. 5th ed., New York: Wiley; 2015.

Montgomery DC, Jennings CJ, Kulahci M. Introduction to time series analysis and forecasting, 2nd ed., New York: Wiley; 2015.

Makridakis SG, Wheelwright SC, Hyndman RJ. Forecasting: Methods and applications. 4th ed., Hoboken, NJ: John Wiley & Sons; 2011.

Pankratz A. Forecasting with Univariate Box- Jenkins models: Concepts and cases. New York: Wiley; 1983.

Andhini MA, Ulkhaq MM. Aplikasi metode peralaman ARIMA untuk meramalkan permintaan produk benang di Spinning 4 PT. Apac Inti Corpora, Semarang (in Bahasa Indonesia). Proceeding of 4th Annual Conference on Industrial & System Engineering; 2017.

Celik S, Karadas K, Eyduran E. Forecasting the production of Groundnut in Turkey using Arima model. World. 2017;17373490(150819):25.

Fattah J, Ezzine L, Aman Z, El Moussami H, Lachhab A. Forecasting of demand using ARIMA model. International Journal of Engineering Business Management. 2018;10:1847979018808673.

Monk E, Wagner B. Concepts in enterprise resource planning. 4th ed., Boston: Course Technology Cengage Learning; 2012.

Ballou RH. Business logistics: Supply chain management. 5th ed., Upper Saddle River, NJ: Prentice-Hall; 2003.