Final answer:
The statement is True, the JIT philosophy asserts that smaller lot sizes are better for reducing waste and increasing efficiency.
Step-by-step explanation:
The statement 'In the JIT philosophy, the smaller the lot size, the better' is True. Just-In-Time (JIT) philosophy focuses on reducing waste and increasing efficiency by producing goods only as they are needed. Smaller lot sizes are a key component of JIT as they reduce the amount of inventory that a company must hold, which in turn lowers storage costs and reduces the risk of inventory obsolescence. Moreover, smaller lot sizes can lead to better quality control and faster response to changes in customer demand. This approach contrasts with traditional manufacturing methods where larger lot sizes were believed to be more cost-effective due to economies of scale. It is important to note that the central limit theorem, which states that the sampling distribution of the means approaches a normal distribution as the sample size increases, is not directly relevant to the philosophy of JIT.