Can a just-in-time inventory system help companies minimize inventory costs, or is JIT too expensive and cumbersome

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Can a just-in-time inventory system help companies minimize inventory costs, or is JIT too expensive and cumbersome to implement? Lately, you have heard a lot of talk about just-in-time inventory systems and how they help companies, like Wal-Mart, keep track of inventory. You know that a JIT system can help track and keep inventory costs at a minimum, but is JIT really a viable option for all companies? For example, your neighbor is a co-owner of a local automobile repair shop, and he is constantly concerned about not having the right parts on hand, which causes the three mechanics to get behind on their work. Just last week he said, “We always seem to run out of parts at the wrong time. Our person in charge of ordering parts does a good job at trying to keep inventory in stock, but sometimes that job can get too big. Something else needs to be done or we are going to start losing customers!” How large does a company have to be and how much inventory must it have before JIT makes sense?

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Accounting concepts and applications

ISBN: 978-0538745482

11th Edition

Authors: Albrecht Stice, Stice Swain

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