Raw Materials: Raw Materials Refer to Supplies

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 houses increase, the construction process will speed up too and the number of contracts will increase accordingly. However the opposite is also true. The same goes for work-in-process for every other product or service out there. If demand for Plasma TVs goes up, the work-in-process of making Plasma Televisions will also shift accordingly.

Finished products:

Finished products are the most demand dependent of all we discussed above. Finished products are final products consumed by the user and if demand is low, similarly number of finished goods will also be low. If the demand for spicy cheese goes down, there will be fewer such items in the market. Similarly if demand for SUVs goes up, so will the number of such finished items in the market.

Maintenance:

Maintenance work is not demand dependent because even if demand for cars is low, the demand for maintenance work may still be high and may even go higher because if people are not buying new cars, they are investing more on old cars which mean more maintenance work. But it is essentially not dependent on demand for new products in related field.

Repair:

Repair is also not demand dependent for the precise reason mentioned in maintenance section. Whether demand for refrigerators is high or low doesn't have any impact on repair work needed on old refrigerators.

RE-ordering practices