The Major Costs Saving Associated with JIT Comes From

question 55

Multiple Choice

The major costs saving associated with JIT comes from:

• A)speeding up inventory turnover.
• B)having materials arrive at a manufacturing plant before they are needed.
• C)avoiding production slowdowns by ensuring inventory is stockpiled.
• D)using warehouse space to maintain on-hand inventory.

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Definitions:

Economies of Scale

The cost advantage organizations achieve due to an increase in scale of production, leading to a reduction in the per-unit cost.

Indirect Materials

Items that are used during the production process but do not become part of the final product, such as lubricants for machinery or cleaning supplies.

Bulk Purchase Items

Products bought in large quantities, typically at a discounted price, for the purpose of reselling or for use over an extended period.

Total Cost

The sum of all expenses incurred in the process of producing or offering a product or service, including direct and indirect costs.