A system in which companies purchase raw materials only when needed is called
A)ABC.
B)external failure costs.
C)internal failure costs.
D)JIT production.

Question

Quizplus · Accepted Answer

JIT production (Just-in-time production) is a system in which the companies only purchase raw materials when they are needed to fulfill the particular order. This system is used to reduce the costs associated with inventory storage and management. It helps the company to operate more efficiently and reduce waste. ABC refers to Activity-Based Costing, which is a method of assigning costs to products and services based on their actual consumption of resources. External and internal failure costs refer to the costs incurred due to defects in product quality, such as product recalls, rework, and warranty claims.

A System in Which Companies Purchase Raw Materials Only When