Which of the Following Is False Regarding the Links Between

question 26

Multiple Choice

Which of the following is false regarding the links between JIT and quality?

• A) Inventory hides bad quality; JIT immediately exposes it.
• B) JIT reduces the number of potential sources of error by shrinking queues and lead times.
• C) As quality improves, fewer inventory buffers are needed; in turn, JIT performs better.
• D) If consistent quality exists, JIT allows firms to reduce all costs associated with inventory.
• E) JIT increases the cost of inventory.

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Definitions:

Contribution Format

An income statement format that separates fixed and variable costs, making it easier to see the contribution margin.

Income Statement

A report that outlines the financial results of a business, including its income, expenditures, and net profits or losses, for a defined accounting period.

Cement Manufacturer

A company engaged in the production of cement, a key ingredient in concrete.

Fixed Expenses

Costs that do not vary with the level of production or sales over a given period, such as rent or salaries.