562 unit 4 revised
Just-in-time (JIT) inventory control is a technique for reducing inventories to a minimum by arranging for the components of the production process to be delivered “just-in-time.” The distributors or manufacturers using this strategy wait for an order to be made before any purchases are made. The plan involves having zero stock on hold while speculating for future demand; ordering and receiving inventory only when needed, not earlier. This approach is used to avoid excess stock when the demand for certain products is low, which leads to losses. Therefore, the inventory held by manufacturers in such cases is forecasted to be sufficient to run through the production process, and in tandem with the supplier demand-not in excess. Additionally, they can be classified into JIT production and JIT purchasing. For production, it only begins when the customer places an order meaning the firm holds raw material awaiting production once there is demand. On the other hand, JIT purchasing is when absolutely no inventory is held or purchased before an actual order is received.
Furthermore, this strategy is structured with the elimination of waste and seamless processes in mind. This idea sees the reduction of problems within the systems to have a more simplified, quality and product-oriented structure. When it is successfully implemented, JIT reduces unnecessary labour used to handle and move inventory together with material expenses, and frees up money tha…
Get a verified expert to help you with any urgent paper!Order Similar
from $10 per-page