just in time Flashcards
what is just in time?
• a business holds no stock and instead relies upon deliveries of raw materials and components to arrive exactly when they are needed
• instead of occasional large deliveries to a warehouse, components arrive just when they are needed and are taken straight to the factory floor
what are 4 advantages of JIT?
• lower stock holding means a reduction in storage space which saves rent and insurance costs
• there is less likelihood of stock perishing, becoming obsolete or out of date
• as stock is only obtained when it is needed, less money is tied up in stock
• changes in external factors/ pressures will have a reduced impact
what are 5 disadvantages of JIT?
• Production is very reliant on suppliers and if stock is not delivered on time, the whole production schedule can be delayed
• There is no spare finished product available to meet unexpected orders, because all product is made to meet actual orders
• Production may stop is stock is not delivered when required
• Discounts for bulk buying (economies of scale) may be lost
• Less environmentally friend as more journey are made with less stock and more money spent on fuel
