One of the underlying assumptions from Chapter 12’s discussion of EOQ, Production Run, and other models is that demand for inventory is independent. Yet, Chapter 14’s similar presentation and discussion of MRP specified that MRP systems assume dependent demand. The concepts of dependent and independent inventory systems are very important. However, their importance is somewhat buried by the quantitative aspects of the EOQ and MRP models.
1. What is the main difference in inventory systems using assumptions of dependent and independent demand models?
Note: Defining dependent and independent is not a sufficient answer. A good answer would address how the answers to the questions 1) What to order, and 2) How many to order, are answered by the operations manager.