Operations - inventory management Flashcards

1
Q

JIT features

A
  • ordering supplies only when required for production or order is placed by customer
  • originated in Japan
  • 1930 ‘The toyota way’
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2
Q

JIT advantages

A
  • allows production to be lean, no wastage as all inentory is used for production
  • no money tied up inventory, improving cash flow and working capital
  • no warehouse required, saving costs
  • more responsive to changing external factors
  • reduced pilferage, stock levels more easily monitored
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3
Q

JIT disadvantages

A
  • delivery costs
  • if deliveries late then business faces consequences of understocking
  • requires good supplier relations which take time to develop
  • relies on good infrastructure between business and suppliers - roads
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4
Q

Consequences of understocking

A
  • run out of inventory and have idle staff/machinery

- customers go to competition instead

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