Final answer:
A company that adopts a just-in-time inventory system would expect to have lower inventories and more frequent purchases, as this system requires timely delivery of inventory only as needed for production.
Step-by-step explanation:
When a company adopts a just-in-time inventory system, it would expect lower inventories and more frequent purchases. This approach to inventory management focuses on receiving goods only as they are needed in the production process, thereby reducing inventory costs and wastage. This system requires a close relationship with suppliers and efficient inventory management to ensure the timely delivery of parts and materials.
Just-in-time delivery was adopted by American car manufacturers from Japanese business practices in the 1980s. This system necessitated suppliers to be located within a day's drive of the main assembly plant to ensure daily delivery of parts. The emphasis is on quality control and the reduction of warehousing jobs in the supply chain.
By implementing just-in-time, there is not only a decrease in inventory levels but also an increase in the frequency of purchases, as materials are ordered and delivered only as needed. In contrast, traditional systems would have higher inventories and either more or less frequent purchasing depending on demand and storage capacities.