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In demand forecasting, "independent demand" refers to the demand for finished goods that is not influenced by the demand for other products, typically driven by external market conditions or customer needs. In contrast, "dependent demand" is derived from the demand for related items, such as components or raw materials needed to produce the finished goods. Understanding the distinction helps businesses accurately predict inventory needs and manage production schedules.
What else can I help you with?
Why price an independable variable and demand is dependent variable?
Because demand creates the price, and not the price dictates the demand.
What are non examples of dependent quantity?
Non-examples of a dependent quantity include constants or independent variables that do not change in response to other factors. For instance, the number of apples in a basket remains constant regardless of the weather, or the price of a product that does not fluctuate based on demand. In these cases, the quantities do not rely on other variables, thus illustrating what a dependent quantity is not.
Daily life examples about differential equations?
Here are two variablesDemand and Price, whereas Price is Independent variable &Demand is dependent variable, i.e. if price of something changes the demand will also be affected. Now simple Differential Equation isd (Demand)= constantd (Price)But keep in mind that Price is a function not a simple variable.
How do you use linear equation for forecasting?
Linear equations can be used for forecasting by establishing a relationship between a dependent variable (such as sales or demand) and one or more independent variables (like time, price, or marketing spend). By analyzing historical data, you can create a linear regression model to predict future values based on this relationship. Once the equation is formulated, you can input future values of the independent variables to estimate the dependent variable, aiding in decision-making and planning. This method is particularly useful for identifying trends and making data-driven forecasts.
When an item is neither a substitutes nor a complement it is called?
When an item is neither a substitute nor a complement, it is referred to as an independent good. This means that the demand for this good is not affected by the price changes of other goods. Essentially, changes in the price of related items do not influence the quantity demanded of independent goods.
What is the difference between independent-demand inventories and dependent-demand inventories?
An independent demand is a demand that is not based on the demand for another item while a dependent demand is based on the demand for another item. For example, the demand for chairs of a table and the table itself is based on the demand for the table. The table in this example is the item with independent demand. Knowing this, one can forecast an independent demand while dependent demands are calculated based on the independent demand item. Business to business independent demands tend to be demands for such items as capital goods, office supplies, MRO (maintenance, repair, and operating) items, and anything else for which the dependency is unknown. Independent demands are usually handled with standalone purchase orders, although some items might be covered by contractual relationships such as volume, price and other agreements.
Distinguish between dependent and independent demand in a McDonald's in an integrated manufacturer of copiers and in a pharmaceutical supply house?
The key to the answer here is to consider what must be forecasted (independent demand), and given the forecast, what demands are thereby created for items to meet the forecasts (dependent demand). In a McDonald's, independent demand is the demand for various items offered for sale-Big Macs, fries, etc. The demand for Egg McMuffins, for example, needs to be forecasted. Given the forecast, then, the demand for the number of eggs, cheese, Canadian bacon, muffins, and containers can then be computed based on the amount needed for each Egg McMuffin. The manufacturer of copiers is integrated, i.e., the parts, components, etc. are produced internally. The demand for the number of copiers is independent (must be forecasted). Given the forecast, the Bill of Materials is exploded to determine the amounts of raw materials, components, parts, etc. that are needed. The pharmaceutical supply company is an extreme case where only end items are carried and nothing is produced internally. The bill of materials is the end item and, therefore, the independent demand (forecasted from customers) is the same as the dependent demand. One might attempt to consider that when the demand for items occurs together, that this is similar to a bill of materials. However, this is not a bill of materials, but rather a causal relationship making it easier to forecast.
Where is the dependent variable in a line graph?
The usual way is to plot the independent variable on the horizontal, and the dependent variable on the vertical. There are some where the dependent is on the horizontal, though. Supply-Demand and Price graphs in Economics comes to mind, as an example.
Which inventory technique is used when the demand for one item depends on demand for another?
The inventory technique used when the demand for one item depends on the demand for another is known as dependent demand inventory management. This approach is often applied in situations where components are required to produce a finished product, like in manufacturing. Techniques such as Material Requirements Planning (MRP) are commonly utilized to manage and forecast the inventory needs based on the dependent relationships among items.
How a company forecast demand for a new flavor of tea?
A company is selling a particular brand of tea and wishes to introduce a new flavor. How will the company forecast demand for it ?
Distinguish between dependent and independent demand in a McDonald's restaurant in an integrated manufacturer of personal copies and in a pharmaceutical supply house?
this question doesn't make sense
Relationship between market demand market potential and sales forecasting?
demand forecasting is crucial for sales forecast
Why is demand estimation and forecasting important for managerial decision making?
why is demand estimation and forecast important for managerial decision making
What is the demand forecast?
Demand forecast is a prediction of the future demand for a product or service based on historical data, market trends, and other relevant factors. It helps organizations make informed decisions regarding production, inventory management, and resource allocation to meet customer needs effectively.
Why price an independable variable and demand is dependent variable?
Because demand creates the price, and not the price dictates the demand.
What are the types of demand?
interrelated demand joint/complement demand competitive derived composite independent
In a line graph where is the dependant variable plotted?
The usual way is to plot the independent variable on the horizontal, and the dependent variable on the vertical. There are some where the dependent is on the horizontal, though. Supply-Demand and Price graphs in Economics comes to mind, as an example.
