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Q. 20-1DQ

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Operations And Supply Chain Management
Found in: Page 543
Operations And Supply Chain Management

Operations And Supply Chain Management

Book edition 14th
Author(s) F. Robert Jacobs
Pages 800 pages
ISBN 9780078024023

Short Answer

Distinguish between dependent and independent demand in a McDonald’s restaurant, in an integrated manufacturer of personal copiers, and a pharmaceutical supply house.

The dependent demand category is an add-on to the independent demand category.

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Step by Step Solution

Dependent and Independent demand in a McDonald’s restaurant

a) Independent demand

The need for components, raw materials, or sub-assemblies is referred to as dependent Demand. This demand does not exist until a parent item, which is often a product, is in demand.

b) Dependent demand

The desire for a finished product that is requested by a third party is known as independent demand. Independent demand is difficult to forecast because it is susceptible to the whims of client requirements, which can be impacted by things such as general economic situations, changes in fashion, and even the weather.

Distinguish between dependent and independent demand in a McDonald’s restaurant

a) Independent demand is the sort of demand that is not reliant on the desire for another product and is thus consumed independently, whereas dependent demand requires the fulfillment of the other demand first.

b) For a McDonald's restaurant, use the following formula: Independent Demand: Burgers and other food products have independent demand. Demand for water or soda, kinds of ketchup, and napkins are based on the demand for burgers and other meal products.

c) For a personal copier maker that is integrated: Demand on its own: The copier's demand is independent of all others, thus it must be predicted. The Bill of Materials is detonated to determine the prediction.

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