Which of the following does not minimize ordering costs when using JIT purchasing?
A) Reducing the number of vendors.
B) Negotiating long-term supply agreements.
C) Making less frequent payments.
D) Maintaining a safety stock.
E) Eliminating inspections.

Question

Quizplus · Accepted Answer

Maintaining a safety stock does not minimize ordering costs in JIT purchasing because JIT aims to reduce inventory levels and associated costs, including those of holding safety stock. Safety stock is contrary to JIT principles, which focus on minimizing inventory and ordering precisely what is needed when it is needed.

Which of the Following Does Not Minimize Ordering Costs When