Concept explainers
To determine: The difference between independent and dependent demand for the given firms.
Introduction: Independent demand is the term that can be used to represent the demand which must be forecasted and uncertain. Dependent demand is the term that can be used to represent the demand that can be calculated accurately to meet the requirement of the production
Explanation of Solution
Difference between dependent and independent demand in Company M:
Company M a fast-food firm that offers a variety of items. The demand for Egg muffins should be forecasted. Based on the
Difference between dependent and independent demand in an integrated manufacturer of personal copiers:
The number of copiers needed is independent and it needs to be forecasted. Based on the forecast, the number of raw materials, parts, and components can be determined. Hence, it has a dependent demand.
Difference between dependent and independent demand in a pharmaceutical supply house:
Here, nothing will be produced internally and the bill of materials is the end item. Therefore, the dependent demand is the same as the independent demand in a pharmaceutical supply house.
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