JIT suppliers have concerns that the JIT firm's demands for small lot sizes are simply a way of transferring holding cost from the JIT firm to the suppliers.

Question

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Suppliers may believe that by reducing the lot sizes, JIT firms are shifting the inventory holding cost to the suppliers, who must produce and stock smaller quantities more frequently, resulting in greater setup costs and reduced economies of scale.

JIT Suppliers Have Concerns That the JIT Firm's Demands for Small