Question

Which of the following statements about a just-in-time (JIT) purchasing system is false?

A. Since there is minimal backup, companies must acquire quality raw materials.
B. Raw materials are stockpiled to avoid production disruptions.
C. In comparison with experiences under traditional systems, manufacturers normally
deal with a reduced number of suppliers.
D. Supplier reliability tends to be more important under a JIT system than under a
traditional purchasing system.
E. The average purchase size is smaller with a JIT system than under a traditional
purchasing system.

Answer 1

The false statement about a just-in-time (JIT) purchasing system is that raw materials are stockpiled to avoid production disruptions. JIT systems minimize inventory and rely on timely deliveries, which is why this statement is incorrect.

Step-by-step explanation:

Among the statements about a just-in-time (JIT) purchasing system, the false statement is B. "Raw materials are stockpiled to avoid production disruptions." This statement is incorrect because in a JIT system, the goal is to minimize inventory and have materials delivered as they are needed, rather than keeping large stockpiles. This contrasts with traditional manufacturing systems, where stockpiling is common to prevent disruptions in production.

JIT systems require acquiring high-quality raw materials since there's minimal backup (Statement A), dealing with a reduced number of reliable suppliers (Statement C), and because there's no buffer of inventory, supplier reliability becomes paramount (Statement D). Furthermore, Statement E is also true, as the average purchase size is smaller with JIT systems to avoid excess inventory.