Which of the following ratios signal success in the just-in-time (JIT) manufacturing environment?
A) A low profitability ratio
B) A high inventory turnover ratio
C) A low equity ratio
D) A high times-interest-earned ratio

Question

Quizplus · Accepted Answer

In a JIT manufacturing environment, the goal is to minimize inventory and reduce waste. A high inventory turnover ratio indicates that products are moving quickly through the production process, and the company is able to meet customer demand without accumulating excessive inventory. Therefore, a high inventory turnover ratio is a good indication of success in JIT manufacturing. The other ratios listed do not necessarily indicate success in this type of manufacturing environment.

Which of the Following Ratios Signal Success in the Just-In-Time