Which of the following occurs under a JIT system?
A) Stockouts are never a problem.
B) Safety stock is set at relatively high levels.
C) Inventory levels are set at 10% of total production levels.
D) Customer demand pulls units through the production line.

Question

Quizplus · Accepted Answer

Under a JIT (Just-in-Time) system, inventory levels are kept low or even eliminated altogether, with customer demand pulling units through the production line. This means that products are only produced when they are actually needed, reducing waste and the costs associated with excess inventory. Stockouts may still occur in a JIT system, but they are managed through quick replenishment processes rather than relying on high levels of safety stock. Inventory levels are not set at a specific percentage of total production levels in a JIT system.

Which of the Following Occurs Under a JIT System