By adopting a just-In-time inventory management system, a company will be vulnerable:
A)to suppliers' bargaining power.
B)to acute changes in economic environment.
C)to suppliers' risk of bankruptcy.
D)all of the above

Question

Quizplus · Accepted Answer

By adopting a just-in-time inventory management system, a company reduces its inventory levels and relies heavily on suppliers to provide materials and goods as needed. This increases the company's vulnerability to suppliers' bargaining power, as they have more leverage in negotiating prices and terms due to the company's reliance on them. Additionally, any acute changes in the economic environment, such as a recession or natural disaster, can disrupt the supply chain and cause delays or shortages in materials. Finally, there is also a risk that suppliers may go bankrupt, leaving the company without a source of critical materials or goods. Therefore, all of the above options make a company vulnerable when adopting a just-in-time inventory management system.

By Adopting a Just-In-Time Inventory Management System, a Company Will