Which is an example of independent demand?

Which is an example of independent demand?

• A. Spare parts for maintenance
• B. Raw materials
• C. Finished goods sold to customer
• D. Components used in assembly

Answer: (C)

Independent demand is the demand that comes from outside the company, not driven by internal production plans. The finished goods sold to customers fit this idea because they represent actual market demand for the final product—you must plan replenishment to meet external orders or forecasted sales. The other items are typically driven by how much you plan to produce or operate: raw materials, components used in assembly, and spare parts for maintenance are derived from the production and maintenance schedules. Their quantities depend on the planned production levels and the maintenance workload, not on direct customer demand for the final product.

Independent demand is the demand that comes from outside the company, not driven by internal production plans. The finished goods sold to customers fit this idea because they represent actual market demand for the final product—you must plan replenishment to meet external orders or forecasted sales.

The other items are typically driven by how much you plan to produce or operate: raw materials, components used in assembly, and spare parts for maintenance are derived from the production and maintenance schedules. Their quantities depend on the planned production levels and the maintenance workload, not on direct customer demand for the final product.