With the cost of warehouse space and maintaining inventory increasing, Parker has decided to change the operation of his company to a "just-in-time" (JIT)mode, whereby manufacturing is initiated only upon customer order and only in very small lots, minimizing the company's warehouse and inventory costs. However, Parker is nervous about the change because he knows that JIT offers costs savings only when the costs of storing product are greater than the costs of
A)rework.
B)TQM.
C)delivery.
D)small batches.
E)large batches.

Question

Quizplus · Accepted Answer

JIT offers cost savings when the costs of storing products are greater than the costs of delivery, as JIT relies on frequent, smaller deliveries to minimize inventory.

With the Cost of Warehouse Space and Maintaining Inventory Increasing