Question: A manufacturing company is attempting to implement a just - in - time ( JIT ) purchase policy system by negotiating with its primary suppliers
A manufacturing company is attempting to implement a justintime JIT purchase policy system by negotiating with its primary suppliers to accept longterm purchase orders which result in more frequent deliveries of smaller quantities of raw materials. If the JIT purchase policy is successful in reducing the total inventory costs of the manufacturing company, which of the following combinations of cost changes would be most likely to occur?
Cost Category
Cost Category
to Increase
to Decrease
A
Purchasing costs
Stockout costs
B
Purchasing costs
Quality costs
C
Stockout costs
Carrying costs
D
Quality costs
Ordering costs
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