| Pros Cons | Improved Efficiency Unexpected Price Changes | Higher Inventory Turnover Ratios Challenges Brought By Sudden Change | Minimal Inventory Obsolescence Order Issues | Smaller Delivery Quantities Local Sourcing Costs |
|---|
What are the advantages of JIT?
- More cost efficient production.
- Continuous quality improvement.
- Waste Elimination.
- Improve productivity.
- Improve supplier relationships.
- Improve storage space used.
- Reduce costs associated with storage.
- Reduce manufacturing time.
What are the disadvantages of just-in-time?
- Risk of Running Out of Stock – With JIT manufacturing, you do not carry as much stock. ...
- Dependency on Suppliers – Having to rely on the timelessness of suppliers for each order puts you at risk of delaying your customers’ receipt of goods.
What are the advantages and the disadvantages of low inventory levels?
By maintaining lower levels of inventory in each product, they have more room to market and sell more products . Retailers that maintain low inventory levels do not need to allocate as much storage space in the building for extra inventory. This means they have more floor space in which to merchandise and sell products.
What are the advantages of JIT Mcq?
Explanation: Time-based competition, streamline manufacturing operations, and reduced cost of scrap are the advantages of JIT. Increased ordering costs is a disadvantage of JIT.
What are the advantages and disadvantages of having inventories?
- Advantage: Wholesale Pricing. ...
- Advantage: Fast Fulfillment. ...
- Advantage: Low Risk of Shortages. ...
- Advantage: Full Shelves. ...
- Disadvantage: Obsolete Inventory. ...
- Disadvantage: Storage Costs.
What are the disadvantages of inventory?
- Storage Costs – One of the biggest issues with inventory-based facilities is the amount of cost associated with storage. ...
- Obsolete Inventory – Another risk that comes with holding excess inventory is that it can become obsolete before you sell it all.
What is a disadvantage of keeping inventory low?
The costs of holding excess and stale inventory are well documented and understood; handling and storage costs, depreciation and shrinkage can easily eat into your profit. ... If your business carries too little inventory, there is a risk of running out of stock, missing a sale and missing out on cost efficiencies .
What are the disadvantages of low inventory levels?
- Shipping Costs. Relying on just-in-time inventory management can prove costly when you run out or get an unexpected request from a key customer. ...
- Increased Dependency on Suppliers. ...
- Unpredictable Demand. ...
- Price Spikes.
What is an advantage of holding inventory?
Holding Inventory reduces risk of production shortages
To avoid the risk of shortage of essential components during a big production process, the firm should maintain inventory management. This will prevent the shortage of vital raw materials and components needed to produce goods.
Which of the following is not an advantage of cellular manufacturing?
Which of the following is not an advantage of cellular manufacturing? Explanation: Cellular manufacturing increases flexibility . ... Explanation: Product layout is generally used for standardized goods. The process layout is generally used for customized goods.
What are the advantages and disadvantages of holding stock?
- Quicker response time. ...
- Decreased risk of shortages. ...
- Quick replenishment. ...
- Risk of inventory becoming obsolete. ...
- Risk of item not selling. ...
- Higher storage costs. ...
- Risk of natural disasters. ...
- Higher insurance premiums.
What do you mean by JIT?
Just-in-time , or JIT, is an inventory management method in which goods are received from suppliers only as they are needed. The main objective of this method is to reduce inventory holding costs and increase inventory turnover.
What are the disadvantages of large inventory management?
- Why is excess inventory bad? ...
- Excess inventory ties-up much-needed working capital. ...
- Excess inventory increases carrying costs. ...
- Excess inventory can lead to poor quality goods and degradation. ...
- Excess inventory can result in stock obsolescence. ...
- Don’t be disadvantaged by excess stock!
What is a disadvantage of excessive inventory?
Lost Profit
One of the most important disadvantages of excess inventory is the loss of revenue . Products depreciate over time and lose their initial value. So the longer you hold a product, the cheaper it gets.
What are the advantages to a firm of low inventory levels?
Reduced inventory allows you to adapt and adjust to rapid market and industry changes, like short product lifecycles. Reduced inventory saves your business carrying costs, storage costs, and transportation costs between warehouse facilities .
What are the risks of holding inventory?
- Risk of price decline. Holding Inventory may increase the risk of decline in price. ...
- Risk of obsolescence. The is a risk of inventory becoming obsolescence. ...
- Purchase cost. A firm has to pay high price for managing inventory. ...
- Ordering cost. ...
- Carrying cost. ...
- Stock out (shortage) cost.
What are the advantages and disadvantages of using the just in time method of inventory control?
| Pros Cons | Reduced Obsolete Inventory Supply Chain Disruption Risks | Fewer Defective Products Missed Opportunities | Improved Efficiency Unexpected Price Changes | Higher Inventory Turnover Ratios Challenges Brought By Sudden Change |
|---|
What are the main problems with a JIT just in time production strategy?
- Problems with forecasting.
- Coping with sudden demand.
- Additional training / planning requirement.
- Less control of supply chain.
- Exceptional events / disasters.
- Increased investment in IT infrastructure.
- Reliance on a single supplier.
- Customer satisfaction.
What are the advantages of inventory?
- Improved Accuracy of Inventory Orders. Accuracy of product orders, status, and tracking are critical to good inventory management. ...
- Organized Warehouse. ...
- Increased Efficiency and Productivity. ...
- Save Time and Money. ...
- Repeat Customers.
What are the benefits of holding inventory explain the negative aspects of holding inventory?
- Avoiding Lost Sales. Losing business is the last part where you, as a business owner wants. ...
- Gaining Quantity Discounts. ...
- Reducing Order Cost. ...
- Achieve Efficient Production Runs. ...
- Reducing risk of production shortages.
Is JIT a bad word?
(US, originally prison slang, derogatory) An inexperienced, foolhardy young man .
What are the three major elements of JIT?
The three elements of JIT are 1) Takt Time, 2) Flow Production, and 3) a Pull System.
What are the barriers in successful implementation of JIT in India?
JIT faces many problems like lack of involvement of employees and workers resistance for continuous improvement, cultural difference, high inventories, long lead time, market volatility, forecasting errors etc. Some critical implementation issues are to be identified and resolved to encourage firms to adopt JIT.
Which among the following is are the advantages of cellular manufacturing?
Production lead time is reduced in cellular manufacturing because of reduction in setup time, reduction in work in progress, reduction in material handling time, reduction in material flow distance and improvement in machine utilization.
Which of the following is the advantage of cellular manufacturing?
Manufacturing cells are used to minimize product movement as well as materials, equipment and labor during the manufacturing process . By reducing cycle times and material handling, these cells help shops more easily meet customer demands regarding cost, quality and leadtimes.
What are the disadvantages of stock control?
| Advantages of stock control system Disadvantages of stock control system | Sales reports showing what is and is not selling Will need staff training | Reports help with forecasting sales and identify seasonal items If equipment breaks down, it can be very awkward for the business |
|---|
What are the advantages of inventory management strategy?
Inventory management helps companies identify which and how much stock to order at what time . It tracks inventory from purchase to the sale of goods. The practice identifies and responds to trends to ensure there’s always enough stock to fulfill customer orders and proper warning of a shortage.
What are the advantages to a firm of high inventory levels?
- Increased Customer Satisfaction. ...
- Supplier Price Discounts. ...
- Protection Against Order Delays. ...
- Merchandising and Promotion.
Which of the following is the disadvantage of product layout?
Disadvantages of Product Layout
Rigidity : The layout is not flexible. Since the operations are performed in a sequential manner, adjustments in the course of production cannot be made. 2. Expansion is difficult: It is difficult to expand production beyond the capacity of each line of production.
What is a disadvantage of holding stock?
having too much stock equals extra expense for you as it can lead to a shortfall in your cash flow and incur excess storage costs. having too little stock equals lost income in the form of lost sales, while also undermining customer confidence in your ability to supply the products you claim to sell.
What are the disadvantages of over stocking and under stocking?
Businesses need to be aware of the disadvantages of having too much inventory. Inventory can go out of fashion or spoil meaning the business will have to write it off as a loss. Having too much inventory results in higher storage costs in terms of bothoverheads and security.
Which of the following is a disadvantage of carrying too much inventory quizlet?
Which of the following is a disadvantage of carrying too much inventory? it creates an unnecessary waste of scarce resources.
