In an effort to improve its competitive position, J.J.Borden Company recently introduced Just-in-Time (JIT) production techniques.Its management accountant assembled the following data regarding the recent change:
Inventory carrying cost is estimated as 15.0% per year.
Required:
1. Estimate the net financial benefit (expressed in terms of the change in operating income) that the company realized from the switch to JIT manufacturing. Round your answer to nearest dollar.
2. List four (4) nonfinancial benefits the company might expect as a result to its move to JIT.
3. List two (2) expected costs of implementing a JIT system?
Definitions:
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