Which of the Following Is True of Just-In-Time (JIT)inventory Management

question 65

Multiple Choice

Which of the following is true of just-in-time (JIT) inventory management?

• A)It results in more storage and insurance cost.
• B)It is a system in which the company produces product only after receiving an order.
• C)It promotes surplus inventory to prevent production shut-down in case of supply interruptions.
• D)It requires a surplus inventory of finished goods to ensure timely, or just-in-time, delivery to customers.

---

Definitions:

Expected Value

A calculated average of all possible values in a probability distribution, weighted by their respective chances of occurrence.

Expected Utility

The anticipated value of an outcome, calculated by multiplying the utility of the outcome by the probability of its occurrence.

Risk-averse

Characterized by the preference to avoid risk, leading individuals or entities to choose the option with the least risk when faced with uncertain outcomes.

Expected Utility

A theory in economics that calculates the anticipated utility or satisfaction from a decision under conditions of uncertainty.