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

Question

Quizplus · Accepted Answer

JIT stands for Just-in-Time, which means that inventory is produced only when it is needed by the customer demand. This means that units are pulled through the production line based on customer demand, rather than being pushed through the line based on inventory levels or production quotas. Safety stock is typically low, and stockouts may occur if there is an unexpected increase in demand. Therefore, the best choice is A, as customer demand pulling units through the production line is a key characteristic of a JIT system. B, C, and D are all incorrect because they do not accurately describe JIT systems.

Which of the Following Occurs Under a JIT System