Dependent Demand is defined as

Dependent Demand is defined as

• A. Independent Demand
• B. Demand that is externally market-driven
• C. Dependent Demand
• D. Seasonal Demand

Answer: (C)

Dependent demand is the demand for components and materials that arises from the planned production of finished goods. The quantity is not forecasted separately; it is calculated from the production schedule and the bill of materials. For example, if you plan to manufacture 1,000 units of a product, and each unit requires 2 screws and 1 bolt, you’ll need 2,000 screws and 1,000 bolts. This demand is driven by what you intend to manufacture, not by external market forecasts. That’s why it’s typically managed with materials planning systems (MRP) to time orders for components so they arrive just as they’re needed, reducing both stockouts and excess inventory. In contrast, independent demand refers to finished goods demanded by customers and forecasted from the market, and seasonal demand describes fluctuations in that independent demand over time.