Demand-driven planning
This section describes how master planning works with your decoupled items. The system uses the concept of net flow during master planning to get a picture of the effective on-hand quantity based on the actual on-hand inventory, plus the inventory that's on order, minus the qualified demand or qualified upcoming sales. The following example shows the net flow equation written as a formula:
Net flow = On-hand inventory + On-order inventory - Qualified demand
Essentially, the system uses this net flow value to determine which buffer zone an item is in rather than using the actual on-hand inventory. This approach allows you to keep orders in mind when planning your resources. When a planned order is triggered during a planning run, the quantity in the order will be the maximum level minus the net flow. Rather than using requirement dates, the system will use a priority-based planning functionality.
DDMRP will assign the priority of a planned order based on the ordered quantity as a percentage of maximum inventory. In other words, an order with a quantity closer to the maximum value will receive a higher priority. Qualified demand is the past-due demand, plus today's demand, plus qualified order spikes in the future. Essentially, it's an aggregated demand across your past, present, and near future demand values.