The controller for Warner Mfg.is trying to implement some of the characteristics of a just-in-time (JIT) inventory system.She has accumulated data on Warner's present inventory system and obtained some projections and estimates of what the results of a JIT system would be. 
The inventory holding cost is $0.75 per unit, per month.Warner currently purchases 120,000 units every four months.Under a JIT system Warner would purchase 30,000 units every month.The monthly inventory schedule and the controller's estimate for a JIT system are provided below: 
(Assume the above trend continues throughout the year.)
Required: Which system should Warner use, and why?
Definitions:
Fiscal Year
A 12-month period used for accounting purposes and preparing financial statements, not necessarily coinciding with the calendar year.
Sales
The activity or business of selling products or services.
Partnership
A sanctioned business arrangement in which two or more persons co-manage and equally divide profits.
Total Contributions
The total sum of money given or invested in a particular context or over a period of time.
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