When a Firm Adopts the Just-In-Time Method of Management

question 10

Multiple Choice

When a firm adopts the just-in-time method of management,

• A)employees are retrained on different equipment,but the plant layout generally remains unchanged.
• B)new machinery and equipment must be purchased from franchised JIT dealers.
• C)machinery and equipment are moved into small autonomous production lines called islands or cells.
• D)new,more efficient machinery and equipment are purchased and installed in the original plant layout.

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Definitions:

Net Income

The net income of a business following the deduction of all expenditures and taxes from its total revenue.

Owners' Equity

The residual interest in the assets of a company after deducting liabilities, representing what the owners own outright.

Investment

The process of distributing funds with the goal of earning revenue or gains.

Acid Test Ratio

A financial metric that measures a company's ability to pay off its short-term liabilities with its quick assets.