Question

Inventory control models assume that demand for an item is A. always dependent on the demand for other items. B. either independent of or dependent on the demand for other items. C. always independent on the demand for other items. D. identical to the demand for other items.

Answer 1

Answer:

B. either independent of or dependent on the demand for other items

Explanation:

Inventory control models are created in order to manage and minimize the cost that might incurred from inventory storing process. In order to achieve this, company need to make to separate the items into two groups :

- items that can be useful if used alone. (this is what we categorized as 'independent')

- Items that can only be useful if it's being paired by another item (this is the 'dependent' one)

A company need to calculate the value of dependent items as a group since the item is basically useless if it stands atone.