Which of the following is a feature of a just-in-time (JIT) purchasing system?
Answer and explanation
Correct answer: B. Materials are delivered close to when they are needed, so raw material inventories are very low
- Step 1: JIT aims to receive materials only as they are needed in production.
- Step 2: It therefore minimises raw material and work-in-progress inventories and requires reliable suppliers.
Answer
Materials are delivered close to when they are needed, so raw material inventories are very low.
Why not the others: Buffer stocks are the opposite of JIT, which aims to minimise inventories. JIT uses frequent small deliveries instead of large batches. JIT produces to meet demand and may leave capacity idle, which avoids building inventory.
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