CPIM Practice Exam

Which type of demand is calculated from the bill-of-material structure?

1. Random demand

2. Independent demand

3. Dependent demand

4. Interplant demand

The correct answer is: Dependent demand

The correct choice of dependent demand is based on the nature of how demand is calculated in relation to the bill of materials (BOM) structure. Dependent demand refers to the demand for components or materials that are directly tied to the production of finished goods. When a manufacturer knows how many finished products they plan to produce (which corresponds to independent demand), they can use the BOM to determine how many components are needed. For instance, if a car manufacturer decides to produce 100 vehicles, the dependent demand for parts like tires, engines, and seats can be calculated directly from the structure that defines how many of each component is required to assemble a car. This relationship allows businesses to effectively plan their inventory and production schedules based on the expected production levels of the finished goods. In contrast, independent demand is determined by external factors and is not calculated from the BOM, while random demand does not follow a predictable pattern and therefore does not relate to the structured hierarchy of the BOM. Interplant demand refers to the demand for materials or products needed between different plants within an organization and is not specifically linked to the BOM of a single product.