In a distribution network, which planning document is used to manage finished goods inventory at branch warehouses?

• A. Distribution Requirements Plan
• B. Bill of Materials
• C. Master Production Schedule
• D. Resource Requirement Plan

Answer: (A)

The main idea here is how finished goods are planned and replenished across a distribution network to keep branch warehouses stocked. The distribution requirements plan is the planning document that handles this by turning demand for finished goods at each branch into timed, location-specific replenishment orders from the central distribution centers or plants. It looks at forecasted and actual demand, on-hand inventory, and inbound receipts, then determines what needs to be shipped, in what quantities, and when, while considering lead times and safety stock. In short, it coordinates the flow of finished goods through the network to maintain service levels at branches.

This differs from the bill of materials, which specifies the components and assembly structure of a product; the master production schedule, which plans what and when to produce in the manufacturing facility; and the resource requirement plan, which focuses on capacity and resource needs. The distribution requirements plan specifically targets finished goods inventory and replenishment across branch warehouses.