COST ACCOUNTING
INVENTORY AND PRODUCTION MANAGEMENT
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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In JIT purchasing, the optimal safety-stock level is the quantity of safety stock that minimizes the sum of annual relevant stockout and carrying costs.
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) JIT purchasing is guided solely by the EOQ model because that model emphasizes the tradeoff between relevant carrying and ordering costs.
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In JIT purchasing, raw materials (or goods) are purchased so that products are delivered just as needed for production or sales.
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Only disadvantage of JIT purchasing is the higher level carrying and inspection costs.
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Detailed explanation-1: -Which of the following is true of Just-in-Time (JIT) Management? It is a system in which the company produces products only after receiving an order. Which of the following is true of service companies? Service companies carry no inventories of products for sale.
Detailed explanation-2: -Which of the following statements is true of just-in-time (JIT) purchasing? In JIT purchasing, raw materials (or goods) are purchased so that products are delivered just as needed for production or sales.
Detailed explanation-3: -Just-in-time, or JIT, is an inventory management method in which goods are received from suppliers only as they are needed. The main objective of this method is to reduce inventory holding costs and increase inventory turnover.
Detailed explanation-4: -Increase Productivity JIT inventory management increases productivity by reducing the time and resources required for manufacturing. This ensures faster production and shorter production runs. You can also implement product changes quickly as there is less raw material stock.