Which of the Following Is True About Firms Using Just-In-Time

question 40

Multiple Choice

Which of the following is true about firms using just-in-time (JIT) inventory system?

• A)A company is more likely to have excess unsold inventory that it has to write off against earnings.
• B)Parts enter the manufacturing process immediately; they are not warehoused.
• C)It is difficult to spot and fix defective inputs.
• D)The amount of working capital a company needs to finance inventory increases.
• E)A firm has ample buffer stock of inventory.

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Definitions:

Maximin Strategy

In decision-making, a strategy that maximizes the minimum gain that can be achieved, often used under conditions of uncertainty to minimize possible losses.

Dominant Strategy

In game theory, a strategy that is best for a player regardless of the strategies chosen by other players.

Nash Equilibria

Nash Equilibria are concepts in game theory where each player's chosen strategy maximizes their payoff, given the strategies chosen by other players, indicating no incentive to deviate unilaterally.

Maximin Strategy

A decision-making rule used in the face of uncertainty, prioritizing the maximization of the minimum possible payoff.