One of the senior management members, Rob Harrison, is sceptical about JIT implementation and raised several question such as:

How can the company save money if the order size is reduced and the number if orders delivered increased?

How the risk of running down the inventory levels be managed?

How will these changes impact on the company’s strategic priority of product quality and customer satisfaction? Write a report to the senior management responding to Mr Harrison’s concern. Your responses should explain the rationale behind improving supplier relationships and the likely impact of introducing a JIT system in line with the company’s strategic priority and calculations above.

Answer rating: 100% (QA)

If the company can adopt Economic Order Quantity EOQ model and determine their optimal quantity leve... View the full answer