With the cost of warehouse space and maintaining inventory increasing, Randall has decided to change the operation of his company to a "just-in-time" (JIT) mode, whereby manufacturing is initiated only upon customer order and only in very small lots, minimizing the company's warehouse and inventory costs. However, Randall is nervous about the change because he knows that JIT offers costs savings only when the costs of storing product are greater than the costs of
A) rework.
B) TQM.
C) frequent delivery.
D) small batches.
E) large batches.

Question

Quizplus · Accepted Answer

The cost savings in a JIT mode come from reducing inventory and warehouse space. One way to achieve this is through frequent, small deliveries to meet customer demand, reducing the need for large batches and storage. Thus, choice C, frequent delivery, is the best answer.

With the Cost of Warehouse Space and Maintaining Inventory Increasing