Describe the difference between independent and dependent demand and give an example of each for a pizza restaurant such as Domino’s or Pizza Hut.

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Answer 1

Textbook Question

Chapter 13, Problem 1Q

Describe the difference between independent and dependent demand and give an example of each for a pizza restaurant such as Domino’s or Pizza Hut.

Expert Solution & Answer

Summary Introduction

To draw: To distinguish between independent and dependent demand with pizza restaurant examples

Introduction

Demand is an economic concept that describes the consumer’s wants and needs to buy goods and services with the willingness to pay. The quantity demanded and the price is related to each other. There are many factors like taste & preference, income level, the expectation of the customer, and prices of related products that have an impact on demand.

Explanation of Solution

Independent demand is a form of demand for a finished good like a pizza, bicycle, and TV.

Dependent demand is a type of demand in which components or some parts for making a finished product are demanded like cheese for making pizza and tyres for fixing in cars.

The difference between independent and dependent demand is:

1. Independent demand does not focus on or have no concern for the demand for other items.

Dependent demand arrives from the independent demand.

2. Independent demand is very essential, but can’t be computed.

Dependent demand is computed from the demand for the finished product.

Example: Domino’s pizza is a finished product and can be directly consumed by the consumer and comes under independent demand.

Cheese and Sauces are materials for making pizza and it comes under the dependent demand.

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Sam's Pet Hotel operates 51 weeks per year, 6 days per week, and uses a continuous review inventory system. It purchases kitty litter for $11.00 per bag. The following information is available about these bags: > Demand 95 bags/week > Order cost $52.00/order > Annual holding cost = 25 percent of cost > Desired cycle-service level = 80 percent >Lead time 4 weeks (24 working days) > Standard deviation of weekly demand = 15 bags > Current on-hand inventory is 320 bags, with no open orders or backorders. a. Suppose that the weekly demand forecast of 95 bags is incorrect and actual demand averages only 75 bags per week. How much higher will total costs be, owing to the distorted EOQ caused by this forecast error? The costs will be $ higher owing to the error in EOQ. (Enter your response rounded to two decimal places.)

Sam's Pet Hotel operates 50 weeks per year, 6 days per week, and uses a continuous review inventory system. It purchases kitty litter for $10.50 per bag. The following information is available about these bags: > Demand = 95 bags/week > Order cost = $55.00/order > Annual holding cost = 35 percent of cost > Desired cycle-service level = 80 percent > Lead time = 4 weeks (24 working days) > Standard deviation of weekly demand = 15 bags > Current on-hand inventory is 320 bags, with no open orders or backorders. a. Suppose that the weekly demand forecast of 95 bags is incorrect and actual demand averages only 75 bags per week. How much higher will total costs be, owing to the distorted EOQ caused by this forecast error? The costs will be $ 10.64 higher owing to the error in EOQ. (Enter your response rounded to two decimal places.) b. Suppose that actual demand is 75 bags but that ordering costs are cut to only $13.00 by using the internet to automate order placing. However, the buyer does…

Answer 2

Textbook Question

Chapter 13, Problem 1Q

Describe the difference between independent and dependent demand and give an example of each for a pizza restaurant such as Domino’s or Pizza Hut.

Expert Solution & Answer

Summary Introduction

To draw: To distinguish between independent and dependent demand with pizza restaurant examples

Introduction

Demand is an economic concept that describes the consumer’s wants and needs to buy goods and services with the willingness to pay. The quantity demanded and the price is related to each other. There are many factors like taste & preference, income level, the expectation of the customer, and prices of related products that have an impact on demand.

Explanation of Solution

Independent demand is a form of demand for a finished good like a pizza, bicycle, and TV.

Dependent demand is a type of demand in which components or some parts for making a finished product are demanded like cheese for making pizza and tyres for fixing in cars.

The difference between independent and dependent demand is:

1. Independent demand does not focus on or have no concern for the demand for other items.

Dependent demand arrives from the independent demand.

2. Independent demand is very essential, but can’t be computed.

Dependent demand is computed from the demand for the finished product.

Example: Domino’s pizza is a finished product and can be directly consumed by the consumer and comes under independent demand.

Cheese and Sauces are materials for making pizza and it comes under the dependent demand.

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Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Answer 3

Textbook Question

Chapter 13, Problem 1Q

Describe the difference between independent and dependent demand and give an example of each for a pizza restaurant such as Domino’s or Pizza Hut.

Expert Solution & Answer

Summary Introduction

To draw: To distinguish between independent and dependent demand with pizza restaurant examples

Introduction

Demand is an economic concept that describes the consumer’s wants and needs to buy goods and services with the willingness to pay. The quantity demanded and the price is related to each other. There are many factors like taste & preference, income level, the expectation of the customer, and prices of related products that have an impact on demand.

Explanation of Solution

Independent demand is a form of demand for a finished good like a pizza, bicycle, and TV.

Dependent demand is a type of demand in which components or some parts for making a finished product are demanded like cheese for making pizza and tyres for fixing in cars.

The difference between independent and dependent demand is:

1. Independent demand does not focus on or have no concern for the demand for other items.

Dependent demand arrives from the independent demand.

2. Independent demand is very essential, but can’t be computed.

Dependent demand is computed from the demand for the finished product.

Example: Domino’s pizza is a finished product and can be directly consumed by the consumer and comes under independent demand.

Cheese and Sauces are materials for making pizza and it comes under the dependent demand.

Want to see more full solutions like this?

Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Answer 4

Textbook Question

Chapter 13, Problem 1Q

Describe the difference between independent and dependent demand and give an example of each for a pizza restaurant such as Domino’s or Pizza Hut.

Expert Solution & Answer

Summary Introduction

To draw: To distinguish between independent and dependent demand with pizza restaurant examples

Introduction

Demand is an economic concept that describes the consumer’s wants and needs to buy goods and services with the willingness to pay. The quantity demanded and the price is related to each other. There are many factors like taste & preference, income level, the expectation of the customer, and prices of related products that have an impact on demand.

Explanation of Solution

Independent demand is a form of demand for a finished good like a pizza, bicycle, and TV.

Dependent demand is a type of demand in which components or some parts for making a finished product are demanded like cheese for making pizza and tyres for fixing in cars.

The difference between independent and dependent demand is:

1. Independent demand does not focus on or have no concern for the demand for other items.

Dependent demand arrives from the independent demand.

2. Independent demand is very essential, but can’t be computed.

Dependent demand is computed from the demand for the finished product.

Example: Domino’s pizza is a finished product and can be directly consumed by the consumer and comes under independent demand.

Cheese and Sauces are materials for making pizza and it comes under the dependent demand.

Want to see more full solutions like this?

Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Answer 5

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Answer 6

Textbook Question

Answer 7

Expert Solution & Answer

Summary Introduction

To draw: To distinguish between independent and dependent demand with pizza restaurant examples

Introduction

Demand is an economic concept that describes the consumer’s wants and needs to buy goods and services with the willingness to pay. The quantity demanded and the price is related to each other. There are many factors like taste & preference, income level, the expectation of the customer, and prices of related products that have an impact on demand.

Explanation of Solution

Independent demand is a form of demand for a finished good like a pizza, bicycle, and TV.

Dependent demand is a type of demand in which components or some parts for making a finished product are demanded like cheese for making pizza and tyres for fixing in cars.

The difference between independent and dependent demand is:

1. Independent demand does not focus on or have no concern for the demand for other items.

Dependent demand arrives from the independent demand.

2. Independent demand is very essential, but can’t be computed.

Dependent demand is computed from the demand for the finished product.

Example: Domino’s pizza is a finished product and can be directly consumed by the consumer and comes under independent demand.

Cheese and Sauces are materials for making pizza and it comes under the dependent demand.

Answer 8

Expert Solution & Answer

Summary Introduction

To draw: To distinguish between independent and dependent demand with pizza restaurant examples

Introduction

Demand is an economic concept that describes the consumer’s wants and needs to buy goods and services with the willingness to pay. The quantity demanded and the price is related to each other. There are many factors like taste & preference, income level, the expectation of the customer, and prices of related products that have an impact on demand.

Explanation of Solution

Independent demand is a form of demand for a finished good like a pizza, bicycle, and TV.

Dependent demand is a type of demand in which components or some parts for making a finished product are demanded like cheese for making pizza and tyres for fixing in cars.

The difference between independent and dependent demand is:

1. Independent demand does not focus on or have no concern for the demand for other items.

Dependent demand arrives from the independent demand.

2. Independent demand is very essential, but can’t be computed.

Dependent demand is computed from the demand for the finished product.

Example: Domino’s pizza is a finished product and can be directly consumed by the consumer and comes under independent demand.

Cheese and Sauces are materials for making pizza and it comes under the dependent demand.

Answer 9

Expert Solution & Answer

Answer 10

Expert Solution & Answer

Answer 11

Summary Introduction

To draw: To distinguish between independent and dependent demand with pizza restaurant examples

Introduction

Demand is an economic concept that describes the consumer’s wants and needs to buy goods and services with the willingness to pay. The quantity demanded and the price is related to each other. There are many factors like taste & preference, income level, the expectation of the customer, and prices of related products that have an impact on demand.

Answer 12

Explanation of Solution

Independent demand is a form of demand for a finished good like a pizza, bicycle, and TV.

Dependent demand is a type of demand in which components or some parts for making a finished product are demanded like cheese for making pizza and tyres for fixing in cars.

The difference between independent and dependent demand is:

1. Independent demand does not focus on or have no concern for the demand for other items.

Dependent demand arrives from the independent demand.

2. Independent demand is very essential, but can’t be computed.

Dependent demand is computed from the demand for the finished product.

Example: Domino’s pizza is a finished product and can be directly consumed by the consumer and comes under independent demand.

Cheese and Sauces are materials for making pizza and it comes under the dependent demand.

Answer 13

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Describe the difference between independent and dependent demand and give an example of each for a pizza restaurant such as Domino’s or Pizza Hut.

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