Which one of the following statements is true regarding JIT inventory? A) It exists just in case something goes wrong. B) It is the minimum inventory necessary to keep a perfect system running. C) It hides variability. D) It is minimized with large lot production. E) It increases if setup costs decrease.

Question

Quizplus · Accepted Answer

JIT inventory is the minimum amount of inventory required to keep the system running without any disruptions. It is not kept just in case something goes wrong, as stated in option A. JIT inventory does not hide variability; rather, it helps to reduce it. Large lot production is not consistent with JIT principles, so option D is incorrect. Similarly, setup costs are to be minimized in JIT, so option E is also not correct. Thus, option B is the correct statement about JIT inventory.

Which One of the Following Statements Is True Regarding JIT