Question

Contrast dependent and independent demand, and trace the development of material requirements planning (MRP)

Answer 1

Contrast between dependent and independent demand:-

Independent demand	Dependent demand
These demands are stable once allowances are made for seasonal variations,	These demands are generally for product required for sub-assembly.
These are the demand for items that are considered end goods which directly goes to customer.	Dependent demands are the demand for items that are used to make another items and sometimes considered to be parts of another items.
Independent demand is influenced by market conditions and is not related to inventory decisions.	In case of dependent demand production depends upon the materials its made up of.

MRP that is Material requirements planning is a production planning and inventory control system. It integrates data from production schedules. Basically it is a computerized system used to develop plans for ordering and producing dependent demand items. MRP uses two basic principles:-

• Requirements for dependent demand items:- Items that can be assembled from the component parts or used for sub-assembly.
• Production order according to the lead time:- Manufacturing resource plannig is done with the help of MRP.