What defines independent demand in inventory terms?

Independent demand in inventory terms refers to the demand for finished goods that is influenced by customer orders rather than production schedules. This type of demand is directly aligned with what customers want to purchase, making it less predictable and more variable compared to dependent demand, which is forecasted based on the production needs of other items.

In the context of supply chain management, understanding independent demand is crucial for effective inventory management, as businesses need to maintain stock levels that can meet customer needs without overstocking or increasing holding costs. This means that businesses must respond to fluctuations in customer demand proactively, adjusting their inventory accordingly.

The other options do not accurately capture the essence of independent demand. Demand linked to production quantities reflects dependent demand, which is calculated based on the need for producing specific items rather than customer purchasing behavior. Demand that is purely speculative does not align with actual customer orders and hence does not define independent demand. Lastly, demand for obsolete products is not relevant in discussing independent demand, as it pertains to products that are no longer in demand from customers at all.