The major cost savings from JIT inventory systems comes from:

Question

Quizplus · Accepted Answer

The major cost savings from JIT inventory systems come from speeding up inventory turnover. This means that companies can reduce the amount of inventory they hold, which can lead to lower costs associated with storage, financing, and handling. JIT systems also allow for better forecasting and communication, which can reduce the risk of overproduction and obsolete inventory. Lowering costs by sacrificing quality is not a benefit of JIT, and increasing productivity of workers is a potential benefit, but not the major cost saving factor. Slowing down inventory turnover would actually increase costs as it would require holding more inventory.

The Major Cost Savings from JIT Inventory Systems Comes From