Question : Contrast independent and dependent demand with respect to inventories. (Summer 2005)
Inventory control models assume that demand for an item is either independent of or dependent on the demand for other items. For example, the demand for refrigerators is independent of the demand for toaster ovens. However, the demand for toaster oven components is dependent on requirements of toaster ovens.
In inventory control independent demand depends upon the various cost factors and mostly ordered to the manufacturing companies.
While the dependent demand manager is required to know about the following:
1. Master production schedule
2. Bill of material
3. Inventory availability
4. Lead Times
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