Which of the Following Is True Regarding JIT Systems

question 31

Multiple Choice

Which of the following is true regarding JIT systems?

• A) JIT systems do not have backup inventory.
• B) JIT usually entails less frequent deliveries.
• C) JIT requires manufacturers to add new warehouses.
• D) JIT requires suppliers to respond to very short order lead times and the customer's production schedule.
• E) Manufacturers must locate their facilities next to important customers in order to practice JIT.

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Definitions:

Overproduction

Overproduction occurs when more goods are produced than are demanded by the market, often leading to excess inventory and wastage of resources.

Lost Sales

Revenue that was not earned due to an inability to meet customer demand or because the customer chose a competitor's product.

Customer Dissatisfaction

Negative feelings or a state of disappointment experienced by customers when products or services fail to meet their expectations.

Absorption Costing Income

The profit figure calculated under absorption costing, including all costs of production – both fixed and variable – in product costs, affecting reported income.