Which one of the following items is most likely a derived-demand inventory item?
A) Wrenches held in inventory by a hardware store
B) Tires held in inventory by a tractor manufacturer
C) Shoes on display in a retail store
D) Toys just received by a toy store
E) Wheat harvested by a farmer

Question

Quizplus · Accepted Answer

Tires held in inventory by a tractor manufacturer are most likely a derived-demand inventory item because they are a component that is required to manufacture the tractors, which are themselves the final product. The demand for tractors is derived from the demand for the goods that they help produce, such as crops, which is why the tires are considered derived-demand inventory.

Which One of the Following Items Is Most Likely a Derived-Demand