Which of the following is the major benefit to a firm of using just-in-time inventory management?
A)It largely eliminates the carrying costs of maintaining a large inventory.
B)It reduces acquisition costs for placing goods in inventory.
C)It minimises the total number of orders that the firm places.
D)It minimises the risk of stock-outs.

Question

Quizplus · Accepted Answer

Just-in-time inventory management largely eliminates the carrying costs of maintaining a large inventory, as products are ordered and received as needed, rather than being stored for long periods of time. This can result in significant savings for the firm, as the cost of maintaining inventory can be quite high. While it may also reduce acquisition costs and minimise the total number of orders, the major benefit is the reduction in carrying costs. It does not necessarily minimise the risk of stock-outs, as there is always some risk involved in relying on a just-in-time inventory system.

Which of the Following Is the Major Benefit to a Firm