Which of the Following Is a Drawback Associated with a JIT

question 71

Multiple Choice

Which of the following is a drawback associated with a JIT system?

• A)There are high transportation costs involved
• B)It leaves a firm without a buffer stock of inventory
• C)It leaves a firm with scrap costs associated with defective products
• D)It increases the warranty costs

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Definitions:

Reverse Stock Split

A corporate action where a company reduces the number of its existing shares to increase the per-share price, consolidating the shares at a specified ratio (e.g., 1 for 10), without changing the company's market capitalization.

Transaction Costs

Expenses incurred when buying or selling a good or service, which may include broker fees, commissions, and other charges.

PE Ratio

The price-to-earnings ratio, a valuation metric that compares a company's stock price to its earnings per share.

Stock Repurchase

A company's buying back of its own shares from the marketplace, which can reduce the number of outstanding shares and potentially increase the stock value.