Westex makes uniforms and overalls for employees in any industry where there is a potential for fire injury. It uses Indura Tuf Stuf fabric in all of the uniforms it manufactures. If there is a decline in the chemical industry, then there will be a decrease in employment in that industry. Since fewer uniforms will be needed, then sales for Tuf Stuf fabric will decline. This is an example of:
A)derived demand.
B)a competitive advantage for the seller.
C)economies of scale in marketing.
D)just-in-time (JIT) inventory control.
E)a new-task buy.

Question

Quizplus · Accepted Answer

This scenario illustrates derived demand, which refers to the demand for a product or service that arises from the demand for another product or service. In this case, the demand for Westex's uniforms and overalls is derived from the demand for fire-resistant clothing in industries where there is a potential for fire injury. If there is a decline in employment in the chemical industry, then there will be a decrease in the need for fire-resistant clothing, and consequently a decrease in the demand for Tuf Stuf fabric.

Westex Makes Uniforms and Overalls for Employees in Any Industry