In a just-in-time production system,
A) customer orders drive the production process.
B) an organization purchases materials in large quantities in order to receive quantity discounts.
C) goods are produced ahead of time to protect against stockouts.
D) inventory levels are maintained as high as possible.

Question

Quizplus · Accepted Answer

In a just-in-time production system, production is driven by customer orders. This means that goods are only produced when the customer has placed an order, rather than being produced ahead of time in anticipation of demand. This is the opposite of option C, where goods are produced ahead of time to protect against stockouts. Option B is also incorrect because just-in-time production typically involves purchasing materials in smaller quantities and more frequently, rather than in large quantities for quantity discounts. Option D is also incorrect because just-in-time production systems aim to minimize inventory levels.

In a Just-In-Time Production System