What is determination of requirements in merchandise management?

The structures and processes within a company are complex. Nowadays, different departments and areas of responsibility are usually linked to each other via IT-based systems. Even in merchandise management , processes such as the determination of requirements are recorded via a computer-supported system in order to make workflows easier and more efficient. The determination of requirements or also procurement disposition is a procedure in business administration. This process is based on time and quantity and thus determines, which future material requirements can be expected. In order to be able to navigate the complex business processes of an enterprise successfully, it is important to know, how the different processes of the determination of requirements are composed. One differentiates between four forms of the determination of requirements of materials:

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The program oriented or deterministic determination of requirements

In this method, the demand is calculated by means of a sales or production program. That program reflects the independent requirement. To do this, the end product is first broken down into its individual parts. This is done by looking at parts lists/work plans and parts usage records. On the basis of these, you can then find out what dependent requirements effectively exist.
The dependent requirements include all raw materials and supplies as well as individual parts and assemblies. If you calculate the dependent requirements, you also find out the gross requirements. If you now check the available stocks and compare them with the gross requirements, the net requirements are calculated.
The program-oriented requirements calculation therefore primarily helps to determine the dependent requirements using the independent requirements.

The consumption-oriented or stochastic determination of requirements

With the consumption-oriented determination of requirements, a forecast is created for the materials concerned based on past consumption. One assumes with this method that one can conclude from the past development of the demand also on future demand development. For this statistics of past demand values are taken for the assistance and a future prognosis are evaluated under consideration of different components. To this method particularly in the consumer goods industry one falls back or if program oriented procedures are not possible, which is the case, for example, when spare parts are needed. Even when it comes to planning low-value goods, the stochastic determination of requirements is used as a guide.
programmorientierte Verfahren nicht möglich sind, was zum Beispiel bei Bedarf von Ersatzteilen der Fall ist. Auch wenn es um die Planung von geringwertigen Gütern geht, orientiert man sich an der stochastischen Bedarfsermittlung.

3. The heuristic determination of demand

For heuristic demand determination, one relies on the subjective assessments of an experienced expert or employee. This approach is suitable if there is no meaningful basis of data for certain parts, assemblies or products. For example, if new parts are to be integrated, the data of the predecessor can be considered.
For the entire products, the demand can be determined on the basis of expected market shares. However, this method can be very time-consuming, as each individual article must actually be considered individually. However, if it concerns a large number of parts and products, one can only rely on a rough estimate. However, this disadvantage can be compensated for by safety stocks, which in turn guarantee a certain readiness to deliver.

4. The rule-based determination of requirements

The rule-based approach is particularly popular in the automotive industry. Since a vehicle model is usually available in several variants, these are described individually in a so-called complex parts list. The dependent requirements are read from the primary requirements according to the IF-THEN principle. In other words, if you select a very specific equipment for a car, then you also select the exact individual parts or assemblies required from the list. At the same time, this excludes the need for other parts that are no longer needed because of exactly one specific part selected.

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