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Dependent demand refers to the demand for items that is directly derived from or dependent upon the demand for another item, usually a finished product. In other words, the requirement for component parts, subassemblies, and raw materials is determined by the production schedule of the final product. Unlike independent demand items, whose demand is influenced by market conditions and customer preferences, dependent demand items are calculated based on the structure of the product and the quantity of finished goods to be produced. For example, if a company manufactures 1,000 bicycles, and each bicycle requires two wheels, one frame, one handlebar, and one seat, the demand for wheels, frames, handlebars, and seats is dependent on the demand for bicycles. Thus, dependent demand is not forecasted independently but computed from the master production schedule and product design data. In material management, dependent demand plays a critical role in planning and controlling inventories. Since the demand for components is directly linked to the production plan, accurate coordination between production scheduling and materials planning is essential. This is where Material Requirements Planning (MRP) systems become highly relevant. MRP is a systematic approach designed to calculate material requirements and schedule their procurement or production to meet the needs of the master production schedule while minimizing inventory levels. The primary objective of MRP systems is to ensure that materials are available for production and products are available for delivery to customers, while ______ ____ ______ ________ _______ ____ __________ ______ _________ _______.
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