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1. What is the difference between dependent and independent
demand?
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Answer Posted / j
An independent demand is a demand that is not based on the
demand for another item while a dependent demand is based on
the demand for another item.
For example, the demand for chairs of a table and the table
itself is based on the demand for the table. The table in
this example is the item with independent demand. Knowing
this, one can forecast an independent demand while dependent
demands are calculated based on the independent demand item.
Business to business independent demands tend to be demands
for such items as capital goods, office supplies, MRO
(maintenance, repair, and operating) items, and anything
else for which the dependency is unknown. Independent
demands are usually handled with standalone purchase orders,
although some items might be covered by contractual
relationships such as volume, price and other agreements.
| Is This Answer Correct ? | 27 Yes | 5 No |
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