An implication of the demand-pull nature of the JIT production process is that
A)finished goods inventories must be available to meet customer demand,although raw material is delivered on an as-needed basis.
B)more storage space for inventories is necessary.
C)finished products are packaged and shipped to customers immediately,thus requiring minimal finished goods inventories.
D)problem areas become less visible as inventories are reduced.

Question

Quizplus · Accepted Answer

The demand-pull nature of JIT production implies that finished products are packaged and shipped to customers immediately, thus requiring minimal finished goods inventories. This is because production is based on actual customer orders, and the focus is on meeting customer demand as and when it arises, rather than building up inventories in anticipation of demand. Therefore, there is no need for more storage space for inventories or for finished goods inventories to be available to meet customer demand. Also, problem areas become more visible as inventories are reduced, as any disruption in the production process can lead to delays in meeting customer demand.

An Implication of the Demand-Pull Nature of the JIT Production