Gibson Enterprises is an MNE that relies on just-in-time inventory management and lean manufacturing systems to optimize quality and efficiency.For the last few years, Gibson has used the same foreign sources for its raw materials.What is the most likely risk faced by Gibson because of foreign sourcing?

Question

Quizplus · Accepted Answer

The most likely risk faced by Gibson because of foreign sourcing is the uncertainty of arriving parts. Dependence on a foreign source for raw materials can result in unpredictable delays due to factors such as shipping disruptions, customs issues, or unexpected production problems at the supplier's end. This uncertainty can disrupt the just-in-time inventory management and lean manufacturing systems used by Gibson, potentially leading to quality and efficiency issues. While quality of incoming inventory is also a risk, it is not the most likely one given that Gibson has been using the same sources for the last few years. Few available suppliers and high inventory costs are not mentioned as relevant factors in the scenario.

Gibson Enterprises Is an MNE That Relies on Just-In-Time Inventory