Which statement best reflects a key objective of Just-In-Time ordering?

Which statement best reflects a key objective of Just-In-Time ordering?

• A. Reduce large inventories and decrease cost and space
• B. Increase safety stock
• C. Extend delivery lead times
• D. Ensure all items are stocked year-round

Answer: (A)

Just-In-Time ordering centers on receiving goods exactly when they are needed, not keeping large quantities on hand. By aligning purchases with actual demand, inventory stays lean, which reduces the space required for storage and lowers carrying costs, improving cash flow and reducing waste from expired or obsolete items. This approach does rely on reliable suppliers and precise scheduling, so disruptions can cause stockouts if not managed well. Increasing safety stock goes against JIT, since more safety stock means holding more inventory. Extending delivery lead times also undermines JIT’s efficiency, which favors quick, reliable deliveries. Stocking items year-round in large quantities contradicts the goal of minimal on-hand inventory.

Just-In-Time ordering centers on receiving goods exactly when they are needed, not keeping large quantities on hand. By aligning purchases with actual demand, inventory stays lean, which reduces the space required for storage and lowers carrying costs, improving cash flow and reducing waste from expired or obsolete items. This approach does rely on reliable suppliers and precise scheduling, so disruptions can cause stockouts if not managed well.

Increasing safety stock goes against JIT, since more safety stock means holding more inventory. Extending delivery lead times also undermines JIT’s efficiency, which favors quick, reliable deliveries. Stocking items year-round in large quantities contradicts the goal of minimal on-hand inventory.