Primary requirements

What are primary requirements?

In order for a company to be able to plan sensibly and, above all, correctly from a business perspective, it needs to determine its requirements. This involves determining how much demand there is for the materials required for production – in terms of demand times and specific demand quantities. A company is faced with the challenge of combining customer demand and other aspects. Otherwise, there is a risk of oversupply or undersupply, which is associated with costs and effort. In this context, primary requirements refer to the demand for products, intermediate products, spare parts, etc. that are sold directly to customers.

Depending on experience and industry, the primary requirements are then calculated using a deterministic (program-oriented) determination of requirements or a stochastic (consumption-oriented) determination of requirements. In some cases, subjective estimates and clearly rule-based procedures are also used.