Raw materials: Raw materials refer to supplies used for final production. They are usually demand dependent because the higher the demand for a certain item, the greater will be the demand for raw materials. For example: steel used during car manufacturing: if the demand for new cars rise, there will be higher demand for steel and vice versa. This is however not a reflection on the entire steel industry but only on the quantity of steel used for automobile manufacturing precisely
Secondly let us suppose the demand for soft drinks goes down, this would also bring down the supply of carbonated water.
WORK-IN-PROCESS:
Work in process is also demand dependent because the higher the demand for items the faster and greater will be work in process speed and magnitude. For example if demand for new...
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