All of the following are benefits of just-in-time inventory ordering systems except:
A) reduces warehouse space.
B) saves utility and manpower costs.
C) reduces inventory financing costs.
D) prevents stock-outs.

Question

Quizplus · Accepted Answer

Just-in-time inventory ordering systems are designed to minimize inventory holding costs by ordering goods and materials only when they are required, reducing the need for warehousing, and decreasing inventory financing costs. However, one of the limitations of a just-in-time inventory system is that there is very little buffer inventory held, which increases the risk of running out of stock if supply chain disruptions occur. Therefore, just-in-time inventory management does not prevent stock-outs.

All of the Following Are Benefits of Just-In-Time Inventory Ordering