• Independent Demand is any demand that has no cause within the business-system context (although it may have a cause in a larger context). For example, to an automobile dealer, a customer order for a new car is an independent demand (although to the customer, it might have been dependent on the unreliability of the customer’s old car).
• Dependent Demand is any demand that is caused by an independent demand, or is necessary to the satisfaction of the independent demand. For example, an independent demand for a new car causes dependent demands for all of the components which make up the car.