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Inventory items can be divided into two main types: Independent demand and dependent demand items. The systems for managing these two types if inventory differ significantly
An item has independent demand when we can’t control it or tie it directly to another item’s demand, while items has dependent demand when the demand for an item is controlled directly, or tied to the production of something else.
The way I understand this topic is as follows
Independent Demand ... is the defacto (original) thing where consumers (buyers) have need and generate demand for their consumables (cars, computers, houses, clothes, medicine, cosmetics, perfumes, food, pizza, hamburgers, ... etc .. etc)
As a consumer (buyer). you may buy these things from time to time, independently from each other, This is why the demand is considered independent demand. There is no clear/direct/visible relation between buying a pizza and buying a car
Dependent demand comes when we deal with things within other things, components within an assembly, assemblies within a machine, ingredients within a recipie, ... etc ... etc.
Knowing what comes in the independent demand category determines what would be needed in the dependent demand category !! If there is demand for20 pizzas for example, this determines how much cheese would be needed. demand for100 cars determines how many wheels will be needed and so on so forth !!
An item has independent demand when we can’t control it or tie it directly to another item’s demandAn item has dependent demand when the demand for an item is controlled directly, or tied to the production of something else.Independent demand and dependent demand items require very different solutions.
For Example:-
if the buyer need Cell phone is Independent Demand
if the buyer need components which is used in cell phone (Ex: Display, keypad, Battery, mic and etc.,) is dependent Demand
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agreed with iqbal sb.
Independent demand is the one we canot control it or tie it directly to another item’s demand. For consumer products it is mainly the end consumer demand. If you were a manufacturer of automobiles, for example, your cars would have independent demand.
Dependent demand is the one linked directly to the demand or production level of another item. In the auto industry, tires have dependent demand as the demand for tyres is directly connected to the demand for automobiles.
Independent demand is mainly end user demand which is usually predicted by forecasting methods. Dependent demand is the demand for the components and materials used to satisfy the independent demand.
Independent Demand is the demand of finished goods that is determined on MPS level. Usually is based on either forecasting or actual customer PO. This is the first input to MRP.
Dependent Demand is the demand in corresponding to the MPS demand. Usually is consists of the component and sub-assemblies of the finished goods that is determined by MPS.
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