ENTREPRENEURIAL OPERATIONS
QUALITY CONTROL
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Which one of the following is an advantage of Just in Time?
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Lower risk if there’s problems with suppliers.
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Can meet sudden increases in demand as you have spare stock.
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Reduces the amount of stock needing to be held.
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May give bulk buying economies of scale
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Explanation:
Detailed explanation-1: -The very low inventory levels mean that inventory storage costs (such as warehouse space) are minimized. The company is investing far less cash in its inventory, since less inventory is needed.
Detailed explanation-2: -Explanation: Better utilization of personnel, reduced space requirements, and reduced inventory are benefits of JIT.
Detailed explanation-3: -JIT avoids the waste associated with overproduction, waiting for material and holding excess inventory. The original concept was created by the founder of Toyota. Just-in-Time means that a manufacturer makes only what is needed, only when it is needed, and only in the amount that is needed.
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