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SCM Offline Work Princess Ramos BSA III - Benevolence

A JIT system requires suppliers to be located close to minimize delivery times of small quantities. Suppliers must provide high quality products on demand. Adopting JIT reveals inefficiencies as inventory is minimized and production changes are fast. Close supplier proximity allows for quick delivery of materials as needed. Accounting may need adjustments for standard costs and product cost tracing with less allocation. Long production runs require more warehouse space to store intermediate and finished goods. The three goals of JIT are eliminating non-value adding processes, continuous improvement, and reducing costs while improving quality.

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67 views2 pages

SCM Offline Work Princess Ramos BSA III - Benevolence

A JIT system requires suppliers to be located close to minimize delivery times of small quantities. Suppliers must provide high quality products on demand. Adopting JIT reveals inefficiencies as inventory is minimized and production changes are fast. Close supplier proximity allows for quick delivery of materials as needed. Accounting may need adjustments for standard costs and product cost tracing with less allocation. Long production runs require more warehouse space to store intermediate and finished goods. The three goals of JIT are eliminating non-value adding processes, continuous improvement, and reducing costs while improving quality.

Uploaded by

Poison Ivy
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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1.

How does adopting a JIT system affect the firm's relationship with suppliers and how must suppliers
change their way of doing business?

JIT manufacturer will limit the number of suppliers to a few. Suppliers must be located close enough to
the JIT buyer to deliver small quantities very quickly. The supplier must agree to providing a top-quality
product to its JIT customer.

2. Why may a JIT control system be useful in disclosing a firm's inefficiencies and problems?

Because this inventory strategy minimizes inventory and increases efficiency and decrease waste by
receiving goods only as they need them for the production process, which reduces inventory costs.
Production runs are short, which means that manufacturers can quickly move from one product to
another. Companies also spend less money on raw materials because they buy just enough resources to
make the ordered products and no more.

3. Why is it important for a company to be (geographically) close to its suppliers to implement a JIT
inventory control system?

Suppliers must be located close enough to the JIT buyer to deliver small quantities very quickly. The
just-in-time (JIT) inventory system is a management strategy that aligns raw-material orders from
suppliers directly with production schedules. So, a Companies employ this inventory strategy to increase
efficiency and decrease waste by receiving goods only as they need them for the production process,
which reduces inventory costs.

4. Why might it be necessary to make adjustments to the accounting system in a firm that adopts JIT?

Additional adjustments may be necessary to accommodate standard costs; which are constantly adjusted
to reflect the latest technological changes in production methods. Also, more costs could be traced to
specific products and fewer costs would have to be allocated.

5. What is the relationship between warehouse space and the length of production runs?

To accommodate long production runs, significant warehouse space needs to be available for storing
intermediate and final products because the length of production runs increases the levels of specific
inventories.

6. What are the three primary goals of the just-in-time (JIT) philosophy?

The three primary goals of JIT philosophy are, first is to eliminate any production process or operation
that does not add value to the product or service. Second is the continuous improvement in
production/performance efficiency. And third is to reduce the total cost of production/performance while
increasing quality.

SCM Offline work

Princess Ramos

BSA III - Benevolence

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