The Controller of Nip-It-In-The-Bud Inc

question 129

Essay

The Controller of Nip-it-in-the-Bud Inc. has studied the possibility of implementing a JIT production system. The annual incremental retooling costs of the JIT system is projected to be about $67,000 however, the new system will lower insurance costs by $10,000 and storage costs will drop by $20,000 a year as the company will be able to reuse warehouse space for other strategic purposes. In addition, material handling costs will drop by $10,000 a year and because of a resulting increase in quality and faster delivery, the company's contribution margin on the product will increase by $2.00 on annual sales of 20,000 units.
Required:
Calculate the net incremental benefit of the JIT system implementation.

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Definitions:

Low Self-esteem

A condition where an individual holds a low regard for oneself, characterized by a lack of confidence and feeling unworthy or incapable.

Higher-status Jobs

Positions in an organization or profession that are considered to have more prestige, authority, and responsibility compared to others.

Negative Feedback

Critique or information about an individual's performance that indicates what they have done wrong or what could be improved.

Internal Locus

A psychological concept indicating that an individual believes they can control their own life and decisions, as opposed to external forces determining their path.