JIT Requires a Stable Production Level

question 48

True/False

JIT requires a stable production level. When compared to synchronous manufacturing, this is viewed as a negative aspect of JIT.

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Definitions:

Break-even Point

The point at which total revenues equal total expenses, resulting in no profit or loss for the business.

Unit Variable Cost

The cost associated with producing one additional unit of a product, which typically includes materials and labor.

Fixed Costs

Expenses that do not change with the level of production or sales activity, such as rent, salaries, and insurance premiums.

Contribution Margin

The amount by which sales revenue exceeds variable costs of goods sold, indicating how much revenue contributes towards covering fixed costs and generating profit.