How does a JIT system achieve the objective of minimizing purchase costs without carrying inventory?
A) by ensuring that sufficient inventory is on hand to prevent stockouts
B) by purchasing extra raw materials when purchase price discounts are offered
C) by negotiating long-term contracts with supplier to lock in low purchase prices
D) by selecting an inventory level that minimizes the total of ordering and carrying costs

Question

Quizplus · Accepted Answer

A JIT (Just-In-Time) system minimizes purchase costs by negotiating long-term contracts with suppliers to secure low purchase prices, ensuring materials are available as needed without holding excess inventory.

How Does a JIT System Achieve the Objective of Minimizing