What is a dependent demand?
dependent demand occurs when the level of demand and production of one item known as a superior item determines the demand for another item known as a childhood item. For example, because the need for the wrapping material of the product depends on the production level of the product itself, the wrapping material is a child item with dependent demand and the product itself is a parental item with independent demand. Manufacturers who produce a product with dependent demand, usually basic levels of production and purchase of materials on the expected demand or level of production of superior items.
Most products in the production industry are children's objects with a demand based on the production level of only a few parent items. As the demand for parental items increases, the demand for a children's item may either increase or decrease. For the calculation of the necessary level of production and the required materials for the children's item, the manufacturer must determine the nature of the relationship with the superior item. Since the need for a mother is changingThe manufacturer must use the relationship between the two products to change the production and purchase of materials for the children's item in the process called Material Requirements.
Before developing material requirements, manufacturers did not include production and purchase for the demand of the product. Instead, manufacturers used a point point method, which was a way of purchase that required the manufacturer to keep the minimum supply of the material at hand. Whenever the amount of material available has reached its low point, the manufacturer would place an order for another. However, this method did not take into account the needs of consumers, so it rarely resulted in accurate purchasing or manufacturing procedures.
Understanding dependent demand is essefective for efficient production and maximum profit. If the manufacturer overvalves the demand for a children's item, the manufacturer may waste materials, time and money to produce a product that consumers will notou shopping. On the other hand, if the manufacturer underestimates the need for a children's item, this manufacturer does not create enough children's item to meet the needs of the consumer. In addition, because some superior items cannot work without a subordinate item, the child's item may prevent the production or distribution of superior items.