Just-in-time production gains economic advantage by purchasing inventory in large batches in order to get volume discounts and achieve lower manufacturing costs.

Question

Quizplus · Accepted Answer

Just-in-time production operates on the principle of producing goods as and when they are required, instead of maintaining a large inventory of finished goods. This method helps to reduce inventory holding costs and the risk of inventory obsolescence. Therefore, JIT does not purchase inventory in large batches to achieve volume discounts and lower manufacturing costs. In fact, it emphasizes reducing inventory levels to the barest minimum.

Just-In-Time Production Gains Economic Advantage by Purchasing Inventory in Large