Vertical Dependency
Definition
Vertical dependency is the parent-child relationship between levels of a bill of material: demand for a parent item directly creates demand for the components beneath it, cascading down through every BOM level.
In Practice
Vertical dependency is the logic MRP is built on. A master schedule calling for 500 finished units explodes level by level: 500 housings, 1,000 brackets (two per unit), 4,000 screws — each requirement offset earlier in time by the component's lead time. Component demand is therefore dependent demand; it should be calculated from parent plans, never forecast independently.
The practical consequence is that errors travel vertically: a 10% overstatement at the top level inflates every component below it, and a BOM quantity error multiplies through all parent demand. Accurate BOMs and a realistic master schedule are what keep the cascade trustworthy.
Frequently Asked Questions
How does vertical dependency relate to dependent demand?
They are the same idea from two angles. Vertical dependency describes the BOM structure linking parent to component; dependent demand is the requirement that flows down that link. Because component needs can be calculated exactly from parent plans, MRP computes them instead of forecasting them.
What happens to errors in a vertically dependent structure?
They multiply downward. If the master schedule is 10% too high, every component requirement below it is 10% too high; if a BOM says two brackets where the design needs three, every parent order is short. That is why BOM accuracy above 98% is a standard MRP prerequisite.
Related Terms
Horizontal dependency is the relationship among components at the same level of a bill of material: because all of them are required to build one parent unit, a shortage of any single component blocks the assembly of all the others.
Multilevel Bill of MaterialA multilevel bill of material is the complete product structure showing every level of assembly — from the finished item through subassemblies down to purchased components and raw materials — with quantities linking each parent to its children.
Material Requirements Planning (MRP)Material Requirements Planning (MRP) is a calculation engine that translates a production schedule into time-phased requirements for every component and raw material, using bills of materials, inventory records, and lead times.
Low-Level CodeA low-level code is a number assigned to each item identifying the lowest level at which it appears in any bill of material, used by MRP to ensure an item's requirements are fully accumulated before its needs are calculated.