Which of the Following IS NOT an Advantage of a Just-In-Time

question 62

Multiple Choice

Which of the following IS NOT an advantage of a just-in-time inventory system?

• A)reduction in storage and warehousing cost.
• B)risk of stock outs.
• C)reduction in working capital requirements.
• D)reduction in costs associated with recordkeeping.

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Definitions:

Diseconomies of Scale

The phenomenon where production costs per unit increase as a firm's output increases, usually due to inefficiencies that arise with large-scale production.

Production Volume

The quantity of products that a manufacturing system can produce over a specific period of time.

Total Cost

The complete cost of production or operation, including fixed and variable costs, associated with a business activity or process.

Economies of Scale

Cost advantages that enterprises obtain due to their scale of operation, with cost per unit of output decreasing with increasing scale.