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What is dependent demand vs. independent demand?

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Question added by Mohammad Tohamy Hussein Hussein , Chief Executive Officer & ERP Architect , Egyptian Software Group
Date Posted: 2014/06/15
ALI ABDULLAH HASAN AL-KHAFAJI
by ALI ABDULLAH HASAN AL-KHAFAJI , Warehouse & Logistics Manager , Earth link Telecom

Inventory items can be divided into two main types: Independent demand and dependent demand items. The systems for managing these two types if inventory differ significantly

An item has independent demand when we can’t control it or tie it directly to another item’s demand, while items has dependent demand when the demand for an item is controlled directly, or tied to the production of something else.

 

Mohammed Thiab
by Mohammed Thiab , Founder / Chief Consultant , MV Consulting

The way I understand this topic is as follows

 

Independent Demand ... is the defacto (original) thing where consumers (buyers) have need and generate demand for their consumables (cars, computers, houses, clothes, medicine, cosmetics, perfumes, food, pizza, hamburgers, ...  etc .. etc)

 

As a consumer (buyer). you may buy these things from time to time, independently from each other, This is why the demand is considered independent demand.  There is no clear/direct/visible relation between buying a pizza and buying a car

 

Dependent demand comes when we deal with things within other things, components within an assembly, assemblies within a machine, ingredients within a recipie, ... etc ... etc.  

 

Knowing what comes in the independent demand category determines what would be needed in the dependent demand  category !!   If there is demand for20 pizzas for example, this determines how much cheese would be needed.  demand for100 cars determines how many wheels will be needed and so on so forth !!

yasir nisar
by yasir nisar , Internal Audit Officer , RCG Stores (The Clothing Gallery)

An item has independent demand when we can’t control it or tie it directly to another item’s demandAn item has dependent demand when the demand for an item is controlled directly, or tied to the production of something else.Independent demand and dependent demand items require very different solutions.

gopikrishnan parthasarathy
by gopikrishnan parthasarathy , Purchase and supply chain engineer , Teja machinery

For Example:-

 

if the buyer need Cell phone is Independent Demand

if the buyer need  components which is used in cell phone (Ex: Display, keypad, Battery, mic and etc.,) is dependent Demand

 

amer jayyousi
by amer jayyousi , Business Development Consultant , freelance

Exactly as the name implies,i really can't add  more than what my friends added especially mr. Abu baker.

Raafat Sallam
by Raafat Sallam , Organizational Development and Training Consultant , Training Centers, Marketing Organizations.

Agree with Mr. ALI ABDULLAH

zafar abbas minhas
by zafar abbas minhas , Freelance Writer , DAILY MASHRAQ

agreed with iqbal sb.

Jose Miguel Lucas Martins
by Jose Miguel Lucas Martins , IT Director - Robotic Process Automation (RPA) , Novo Banco

Independent demand is the one we canot control it or tie it directly to another item’s demand. For consumer products it is mainly the end consumer demand. If you were a manufacturer of automobiles, for example, your cars would have independent demand.

Dependent demand is the one linked directly to the demand or production level of another item. In the auto industry, tires have dependent demand as the demand for tyres is directly connected to the demand for automobiles.

Deleted user
by Deleted user

Agreed with Mr. Iqbal

Mohammad Tohamy Hussein Hussein
by Mohammad Tohamy Hussein Hussein , Chief Executive Officer & ERP Architect , Egyptian Software Group

Independent demand is mainly end user demand which is usually predicted by forecasting methods. Dependent demand is the demand for the components and materials used to satisfy the independent demand.

Deleted user
by Deleted user

Independent Demand is the demand of finished goods that is determined on MPS level. Usually is based on either forecasting or actual customer PO. This is the first input to MRP.

 

Dependent Demand is the demand in corresponding to the MPS demand. Usually is consists of the component and sub-assemblies of the finished goods that is determined by MPS.

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