Final answer:
True. Identifying cost drivers is crucial for implementing the Just-In-Time philosophy as it helps in streamlining operations, eliminating waste, and aligning production with customer demands to reduce inventory costs.
Step-by-step explanation:
Identifying cost drivers is indeed an essential step in implementing the Just-In-Time (JIT) philosophy. True. Just-In-Time is a production strategy that strives to improve a business's return on investment by reducing in-process inventory and associated carrying costs. To achieve this, JIT principles emphasize the importance of understanding and controlling costs that do not add value to the product or service, known as cost drivers. Recognizing these cost drivers enables a business to streamline operations, remove waste, and reduce unnecessary stock levels. This helps in ensuring that materials are only received and produced as needed, thus aligning production schedules more closely with customer demands and reducing the costs tied up in stockpiling materials.