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’
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
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
4
Q
Consequences of understocking
A
- run out of inventory and have idle staff/machinery
- customers go to competition instead