Question

Harold Corporation recently abandoned its traditional production and inventory system in favor of a just-in-time system. The company typically ordered 700 units of raw material at a time and purchased units that scored a 7 on a 10-point quality scale, with 10 being very close to perfection. All other things being equal, which of the following choices denotes a likely scenario under the just-in-time system?

Option 1: An increase to units scoring 9 on the quality scale
Option 2: A decrease to units scoring 5 on the quality scale
Option 3: An increase to units scoring 8 on the quality scale
Option 4: A decrease to units scoring 6 on the quality scale

Answer 1

Under the just-in-time system, Harold Corporation is likely to see Option 1: an increase in units scoring 9 on the quality scale.

Step-by-step explanation:

The likely scenario under the just-in-time system for Harold Corporation would be an increase in units scoring 9 on the quality scale (Option 1). Just-in-time manufacturing focuses on improving quality control by identifying and addressing issues immediately. By purchasing units that score higher on the quality scale, Harold Corporation can ensure that defective parts are not shipped to the main assembly plant, resulting in better overall quality.