Derived demand

The price histories for the four isomers are given ia Reference 1. The average values started to increase drastically ia late 1973 owing to increases in world cmde oil prices. They also increased sharply from 1979—1985 in response to increased cmde oil prices and shortages of xylenes. From 1986—1992 the prices generally declined as availabiUty increased and cmde oil prices declined, except in 1989 when derivatives demand was strong and xylenes supply was tight. 

In the United States, the acetylene production exceeded 450, 000 t/yr between 1963 and 1970, but then declined until it hit a minimum production level below 150, 000 t/yr in 1982. Of this production, about 40,000 t were dedicated to industrial use, ie, welding, etc. Thus only slightly more than 100,000 t were produced for the chemical process industry. Figure 14 illustrates the 17-year decline in acetylene production and indicates the reduced derivative demand to which the accumulated decline is attributed (37). 

The production volume of propylene tracks that of ethylene because they are simultaneously produced in the same plants. Usually, propylene sells for a somewhat lower price than ethylene, but this occasionally varies when derivative demands change. Prices for both stay relatively constant in the 25-30 cent/lb. range. 

Another important contribution of this work is that it reminds us that medicines are means of production that are combined with others in a production function, and that therefore the demand for them is derived from the demand for health care, which is determined by the increase in income. Thus, it is not the demand for pharmaceuticals that should be regulated but the demand for health services as a whole. Moreover, the derived demand for pharmaceuticals depends not only on the demand for health care services but also on the production functions of these services and the decisions made by doctors... 

Traditional commercial requirements for L-phenylalanine have been small (less than 50 ton/a) and had been satisfied by the use of aminoacylase to resolve chemically synthesised DL-N-acetylphenylalanine. However with the advent of aspartame as a high intensity sweetener a very big derived demand for L-phenylalanine was generated. As a result a number of companies began to develop bioconversion and fermentation processes to produce L-phenylalanine. 

Enzymes sales are estimated to be about 10 /a world-wide. Biocatalysts are subject to a derived-demand arising from the industrial applications in which they are used, for processing raw materials to products that can be sold in their own right. Therefore the commercial importance of biocatalysts is very much greater than these sales of enzymes would indicate. Such sales values are really only of importance to enzyme manufacturer companies. Biocatalysts enable the value of raw materials to be enhanced considerably and the cost of the biocatalyst often represents only a few percent of the final value of product and the total processing costs (Table 13.2). Also, simple enzyme sales values do not include the enzymes that are made and used in-house, as occurs both for many... 

Table 4.7 Derived Demand for Chemicals and Selected Chemical Products...

In this way, soybean demand is essentially a derived demand for meat. Soybean has risen to become a leading crop because the income elasticity of meat is high. Consumers shift their consumption from grains, such as rice and wheat, to meat and other animal products as personal incomes rise around the world. 

Modiano E.M. 1987. Derived demand and capacity plaiming under uncertainty, Oper. Res., 35, 185-197. 

One of the most important sources of carbon pollution is the petrochemical industry. In 2009, more than 85 million of crude oil barrels were produced in the world in order to satisfy the energy and derivatives demand for industrial uses. At present, Russia is the first crude oil producer followed by Saudi Arabia and USA. Both of them produce almost 30% of... 

Derived demand, the third type of demand, results from hnal product sales but is not linked directly through the bill of material, or BOM. For example, a second-tier steel supplier might monitor auto sales in forecasting production. Increases or decreases in auto sales will say a lot about future demand for steel. 

Independent, dependent demand, derived demand Independent demand is driven by end-user or customer needs. It comes from outside the sphere or enterprise. Dependent demand derives from independent demand via a direct Imk between the end product through the bill of materials and triggers replenishment within the sphere or enterprise. Derived demand also depends on final demand but is not directly linked through the bill of materials, like steel being derived from the sale of automobiles. (APICS Dictionary, 11th edition, CD-ROM, 2004)... 

Hoffman J (2001) Butadiene hit hard by sharp drop in derivatives demand. Chem Mark Rep 260 1 and 12... 

In many cases companies have an inadequate visibility of real demand. By real demand we mean the demand in the final marketplace, not the derived demand that is filtered upstream through any intermediary organisations that may lie between the company and the final user. The challenge is to find a way to receive earlier warning of the customers requirements. What we frequently find is that, firstly, the demand penetration point is too far down the pipeline and, secondly, real demand is hidden from view and all we tend to see are orders. Both these points need further explanation we will deal with the concept of the demand penetration point first. 

Market Consumers directly served by retailers and distributors Derived demand Industrial chain, long and complex... 

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