Just in Time

Question 1

What is JIT?

Answer 1

This is when supplies are only ordered when they are required or when an order is placed by a customer

Question 2

What are JIT advantages?

Answer 2

• No warehouse is required which saves costs
• There is no wastage
• Cash flow is improved as no money is tied up in stock (money can be used elsewhere)
• Responsive to external factors

Question 3

What are disadvanatges of JIT:

Answer 3

• It relies on good infrastructure e.g. roads
• If deliveries are late the business pays to consiquences of understocking
• It requires an excellent relationship with the supplier
• Leaves no room for error in the production process
• Transport costs are high which increases carbon footprint and decreases bulk buying
• Even if their is no production employees are still paid