If the JIT System Is Adopted, Are There Safety Stocks

question 6

Essay

If the JIT system is adopted, are there safety stocks of any item that should be maintained? If so, which ones, and how much?

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Definitions:

Barriers to Entry

Barriers that make it difficult for new entrants to join a market due to financial, legal, or procedural hurdles.

Economic Profit

The distinction in totality between incomes and costs, inclusive of both transparent and concealed expenses.

Long Run

A period in economics where all factors of production and costs are variable, allowing for full industry adjustment.

Economies of Scale

Economies of Scale refer to the cost advantages that enterprises obtain due to their scale of operation, with cost per unit of output generally decreasing with increasing scale.