Question Tag: Inventory Control

i) Explanation of Just-in-Time Inventory Control:
Just-In-Time (JIT) refers to an inventory control system that schedules materials to arrive just when they are required for use.
OR
JIT refers to the production system in which processing and movement of materials and goods occur just as they are needed, usually in small batches.
(2 marks)

ii) Advantages of Just-in-Time Inventory Control:

1. Lowers Cost: The use of JIT systems lowers the cost of investment required in all forms of inventory control.
2. Space Savings: JIT systems facilitate the saving of space that would be used to keep stock for long periods before they are used.
3. Customer Satisfaction: There is greater customer satisfaction resulting from higher quality and better state of parts and products for manufacturing.
4. Avoids Waste: JIT systems help the company to reduce waste and inefficiency because materials are requested and delivered per usage.
5. Quick Response: The flexibility of JIT and the ability to supply materials in small batches enable companies to respond more quickly to market changes.
6. Reduces Obsolescence: JIT reduces inventory obsolescence of materials because of reduced inventory.