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 How is the demand for an item determined during the IRP generation process?

To determine the demand for an item during the IRP generation process, the system looks at projected demands that have been entered, existing sales orders, and work ticket component requirements.

The sales order and projected demand dates usually overlap. If they do overlap, the system considers the existing sales order quantities as part of the projected demand.

 Example 1 - Projecting Demand

Projected demand for May 2025 300 of item XYZ
Sales order 1002 with a promise date of 05/15/25 100 of item XYZ

The system calculates the demand for item XYZ as 200 because the sales order quantity is assumed to be included in the projected demand for the period.

If the quantity on the sales order is more than the projected demand, the system takes the greater of the two.

 

 Example 2 - Projecting Demand

Projected demand for May 2025 300 of Item XYZ
Sales order 1002 with a promise date of 05/15/25 100 of item XYZ
Sales order 1007 with a promise date of 05/20/25 250 of item XYZ

The system calculates the demand for item XYZ as 350 because the sales order quantities are higher than the projected demand for the period.

 

For more information, see:

Inventory Requirements Planning

Maintain Projected Demands