Independent Demand is demand for an item that is directly related to other items or finished products, such as a component or material used in making a finished product.

Independent Demand is demand for an item that is directly related to other items or finished products, such as a component or material used in making a finished product.

• A. True
• B. Depends on the industry
• C. False
• D. Cannot be determined

Answer: (C)

Independent demand is the demand for finished goods or end items that comes from external customers and isn’t determined by the production of another item. The description given points to a component or material whose quantity is driven by making a finished product, so its demand is derived from the parent item’s production. That is dependent demand. For example, tires are needed based on how many cars you plan to produce, while the demand for the finished cars comes from customers. In planning, you use independent demand as the starting point and derive dependent demand for components from the bill of materials. So the statement is false.

Independent demand is the demand for finished goods or end items that comes from external customers and isn’t determined by the production of another item. The description given points to a component or material whose quantity is driven by making a finished product, so its demand is derived from the parent item’s production. That is dependent demand. For example, tires are needed based on how many cars you plan to produce, while the demand for the finished cars comes from customers. In planning, you use independent demand as the starting point and derive dependent demand for components from the bill of materials. So the statement is false.