Which of the following statements about just-in-time inventory management policy is NOT true?
A) It calls for the exact day-by-day, or even hour-by-hour raw material needs to be delivered by the suppliers.
B) If the supplier fails to make the needed deliveries, then production shuts down.
C) A big disadvantage in this system is that there are high raw inventory costs.
D) It eliminates obsolescence or loss to theft.

Question

Quizplus · Accepted Answer

Just-in-time inventory management policy aims to reduce inventory costs by only ordering materials when they are needed, thereby reducing the risk of obsolescence or loss due to theft. Therefore, statement C that suggests high raw inventory costs is not true, making it the correct answer. Statements A and B are true, while statement D is partially true since it reduces the risk of obsolescence or theft but does not guarantee their elimination.

Which of the Following Statements About Just-In-Time Inventory Management Policy