Question

A company that produces pots and pans would like to implement a just-in-time inventory system. Which product-flow model best demonstrates this strategy?

A : Through an integrated information system, the company receives raw materials and makes products as customers need them.
B : The company keeps a small inventory of each product and makes larger quantities as needed for customer orders.
C : Each time a new customer order arrives, the company purchases the product from another manufacturer and ships it to the customer as soon as it’s received from the supplier.
D : The company always keeps a large inventory of finished products so it will have enough products to fill customer orders quickly.

Answer 1

The answer is: A) Through an integrated information system, the company receives raw materials and makes products as customers need them.

Step-by-step explanation:

Just in time inventory system is a management system that tries to reduce inventory levels to the minimum possible quantity. Its main goal is to make sure all the parts needed to manufacture a finished product are delivered to the production areas exactly when needed, not before and not after. By doing this, companies reduce to a minimum level their inventory investment.