Final answer:
Dependent inventory refers to items whose demand is tied directly to an organization's production schedules, contrary to external customer demand. Managing this type of inventory is crucial for aligning with production and minimizing related costs.
Step-by-step explanation:
Inventory items with demand levels that are beyond an organization's complete control are classified as dependent inventory. These are typically components or raw materials whose demand is contingent on the production schedules of finished goods.
Unlike independent inventory, which is influenced by external customer demand, dependent inventory levels tie directly to the company's production plans and the quantities required for the assembly of other products. Efficient management of dependent inventory is critical, involving careful planning and forecasting to synchronize with production schedules and to minimize costs linked with holding inventory.