Which term describes the system that uses MRP logic to explode planned orders at the branch level to create gross requirements for suppliers?

• A. Distribution center
• B. Distribution requirements planning (DRP)
• C. EOQ
• D. EDI

Answer: (B)

Distribution Requirements Planning describes applying MRP thinking to a distribution network. It takes demand at each branch and, through the planning logic, breaks it down into the specific quantities and timing needed from the distribution center and, ultimately, from suppliers. This process of “exploding” planned orders down to branches creates gross requirements that drive replenishment upstream, aligning branch needs with supplier capacity and lead times while balancing inventory and service levels.

The other options don’t fit: a distribution center is a facility, not a planning system; EOQ focuses on optimizing order size for independent demand, not network replenishment; and EDI is about exchanging documents electronically, not planning logic.