Question

Which of the following are independent demand inventory items? Dependent demand inventory items?

1. Bicycles in a toy store

2. Bicycle wheels in a bicycle factory

3. Blood at a blood bank

4. Hamburgers at a fast-food restaurant

5. Hamburger buns at a plant that produces frozen dinners

Explain each with the reason and principle behind it.

Answer 1

Independent demand is the demand of a finished product, usually needed by an external customer, while dependent demand is the demand which depends on the demand of another item, Usually the items with dependent demand are sub assemblies or a component of a manufactured item or constituents of a final task.

1. Bicycle in a toy store is a manufactured product that has its end customers hence it is independent demand inventory.

2. Bicycle wheels' demand depends on the bicycles to be made, hence it is dependent demand inventory.

3.Blood at blood bank is needed by different medical procedures and thus it is a dependent demand inventory.

4. Hamburgers are finished products for end customers and therefore are independent demand inventory.

5.Demand for Hamburger buns depends on the number of hamburgers to be produced and therefore is dependent demand inventory.