Final answer:
Just in time delivery minimizes inventory costs and enhances quality control by coordinating production with supply chain schedules, with facility location affecting transport efficiency. Limitations include assumptions about consistent customer flow and single arrivals.
Step-by-step explanation:
The practice of preassigning incoming replenishment shipments to actual demand orders is an operational tactic commonly associated with just in time delivery systems. Such systems, which were notably adopted by American car manufacturers in the 1980s following Japanese business innovations, are designed to minimize inventory holding costs and enhance quality control by having parts delivered exactly when they are needed for production. This real-time fulfillment strategy demands meticulous coordination between the production schedule and the supply chain. The location of facilities is critically important in this context since it impacts transport costs and efficiency. Proximity to traffic-uncongested freeways or alternative transport options like rail or water can significantly reduce shipping expenses and increase profitability. Moreover, the quality of goods, such as harvested fruits that need to reach markets before spoiling, is better preserved through just in time systems. However, this model does have its limitations, such as assuming a consistent flow of customers and single customer arrivals, which may not always hold true.