Certified Supply Chain Professional (CSCP) Practice Exam

What characterizes independent demand in supply chain management?

1. Demand for items that is directly influenced by other items

2. Demand for finished goods

3. Demand that fluctuates based on seasonality

4. Demand solely based on historical sales data

The correct answer is: Demand for finished goods

Independent demand is characterized by its nature as the demand for finished goods. This type of demand does not rely on the demand for other items within the supply chain. Instead, it often stems from the end consumers' needs, which can be influenced by various factors such as market trends, consumer preferences, and economic conditions. Finished goods refer to products that are ready for sale and can be purchased directly by customers without any modifications or additional assembly required. By contrast, dependent demand relates to items whose demand is driven by the demand for other goods, typically components or raw materials that are used to produce finished products. Understanding this distinction is crucial for supply chain management as it helps businesses accurately forecast demand and optimize inventory levels.