Which One of the Following Statements About Just-In-Time Inventory Management

question 45

Multiple Choice

Which one of the following statements about just-in-time inventory management policy is NOT true?

• A) It calls for the exact day-by-day, or even hour-by-hour raw material needs to be delivered by the suppliers.
• B) If the supplier fails to make the needed deliveries, then production shuts down.
• C) A big disadvantage in this system is that there are high raw inventory costs.
• D) It eliminates obsolescence or loss to theft.

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Definitions:

Cash Inflows

The total amount of money coming into a business from its various activities, including sales, investments, financing, and more.

Internal Rate

Typically refers to the internal rate of return (IRR), a discount rate that makes the net present value (NPV) of all cash flows from a project or investment equal to zero.

Annual Cash Flows

The net amount of cash and cash-equivalents being transferred into and out of a business over a year.

Investment Costing

The process of determining the total costs associated with making an investment.