EBK OM
6th Edition
ISBN: 9781305888210
Author: Collier
Publisher: YUZU
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Question
Chapter 17, Problem 2PA
Summary Introduction
Interpretation:Impact of JIT on purchasing functions and practices are to be discussed.
Concept Introduction:
Organizations should maintain its capacity levels to minimise the losses that may incur due to backorders. To avoid such situation organizations should maintain a safety stock of its inventory.
Just in Time (JIT) approach is used by the organizations especially manufacturing firms to reduce their inventory levels and make more profits by using the resources in a very optimal way. The organization must effectively manage its supply chain network to implement JIT at an optimal level.
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- The business concepts and methods of JIT and Supply Chain Management are most closely related to what business function? a. Logistics b. Finance c. Human Resources d. Research & Developmentarrow_forwardIf you were in a hospital and needing a blood transfusion, would you rather the transfusion service used a traditional system of holding stocks of blood or a just-in-time system? What does this tell you about JIT in other organizations?arrow_forwardWhat is the purpose of JIT implementation?arrow_forward
- Just-in-time manufacturing has become more popular because companies can cut costs associated with inventory of supplies and of finished goods. However, JIT has risks. What is a risk when doing JIT manufacturing? Group of answer choices a) You might not be able to manufacture products quickly b) Missed supply deliveries can disrupt manufacturing schedules c) JIT manufacturing reduces product quality d) JIT is only suitable for mass customization productionarrow_forwardIf you were in a hospital and needing a blood transfusion, would you rather the transfusion service used a traditional system of holding stocks of blood or a just-in-time system? What does this tell you about JIT in other organizations? (answer limit 300 to 500 words)arrow_forwardChoose companies or industries for which JIT would be totally inappropriate?arrow_forward
- Benefits of Switching to JIT You have recently been hired as the management accountant forDelta Technologies Inc. The company produces a broad line of subassemblies that are used in theproduction of flat-screen TVs and other electronic equipment. Competitive pressures, principallyfrom abroad, have caused the company to reexamine its competitive strategy and associated management accounting and control systems. More to the point, the company feels a pressing need to adoptJIT manufacturing, to improve the quality of its outputs (in response to ever-increasing demands byconsumers of electronic products), and to better manage its cost structure.A year ago, Delta acquired, via a 5-year lease, new manufacturing equipment, the annual cost ofwhich is $500,000. To support the move to JIT, however, Delta would have to acquire new, computercontrolled manufacturing equipment, the leasing cost of which is estimated at $1 million per year for4 years. If the company were to break its existing lease…arrow_forwardYou are the Operations Manager of an FMCG Company - in charge of Procurement (Purchase),Manufacturing and Logistics (Warehousing / Packaging / Transportation). Management is very concerned about the repeated overrun on your budgeted expenditure year after year - seriously affecting the bottom line (net profit). Having been advised about the enormous benefits (tangible/ intangible) that could accrue to the Company through the application of JIT / Lean Systems, the Company has assigned the task of implementing the said system to you through a Core Team. Q1. Explain in detail the necessary steps / action plan you would initiate in order to achieve the targeted Cost reduction through Lean System.? Q2. What would you do to change the culture of the Organization into a " Lean Culture"?arrow_forwardJust-in-time (JIT) systems are designed to use minimal inventories by achieving a smooth production flow. The mostimportant element which is used to build the system is quality.With reference to the case study, examine the key elements which can be used in a JIT system. Use relevant examples to justify your propositions.arrow_forward
- the core beliefs of the JIT philosophyarrow_forwardJust-in-time has been characterized as a system whose primary goal is to eliminate waste. Discuss how waste can be introduced in (a) relationships with vendors b) receipt of material into the plant, and (c) movement of material through the plant.How do JIT methods cut down on these forms of waste?arrow_forwardCan a supply chain become too lean? Explain your answer—using examples if possible.arrow_forward
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