Question

Which of the following can be achieved by implementing just-in-time (JIT) manufacturing?

a. High inventory carrying costs
b. Minimal inventory holding costs
c. Huge quantity of work-in-process inventory
d. Huge quantity of finished goods inventory

Answer 1

Just-in-time (JIT) manufacturing allows companies to minimize inventory holding costs, improve quality control through immediate feedback, and creates a need for suppliers to be located near the main assembly plants.

Step-by-step explanation:

By implementing just-in-time (JIT) manufacturing, companies like Honda in the 1980s could achieve minimal inventory holding costs. This approach to supply chain management revolves around having the parts needed for production delivered precisely when they are needed, which reduces the need for warehousing and associated costs. As parts are delivered daily, JIT systems allow problems with supplies to be identified rapidly, leading to better quality control. Moreover, JIT manufacturing forces suppliers to be located within close proximity to the main assembly plants to ensure timely delivery, which can have socio-economic impacts on labor markets, wage levels, and the bargaining power of workers.