Since Its Objective Is to Minimize Inventory Investment, a Just-In-Time

question 160

True/False

Since its objective is to minimize inventory investment, a Just-in-Time (JIT) system uses no, or very little, safety stocks.

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Definitions:

Ending Inventory

The cumulative worth of merchandise ready for purchase at the closure of a financial period.

LIFO Method

Last In, First Out method; an inventory valuation technique where the latest items added to the inventory are the first to be sold.

Cost of Merchandise Sold

The total cost incurred to purchase or produce the goods sold by a company during a specific period.

Gross Profit

The financial metric representing the difference between revenue and the cost of goods sold, indicating how efficiently a company is producing its goods.