Cost Management: A Strategic Emphasis 5th Edition by David Stout, Edward Blocher, Gary Cokins

Exercise 23

Describe how a just-in-time (JIT) manufacturing system is fundamentally different from a conventional manufacturing system. List two primary financial benefits associated with a shift to JIT manufacturing. What effect does the adoption of JIT have on the design of management accounting and control systems?

Step 1 of 3

Just in time inventory system helps to manage the inventory on a more organized manner as compared to the conventional system of inventory management. In this method the inventory will not be stored by the business. The raw material purchase will be aligned to the sales order. This will reduce the time wastage and will help to forecast the demand.