Answered: How does Just-In-Time (JIT) system help…

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Accounting

How does Just-In-Time (JIT) system help minimize the inventory investment? Explain.

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter10: Inventory

Section: Chapter Questions

Problem 3Q: Why do consignment arrangements present a challenge in inventory management? Explain.

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Which of the following is a disadvantage of the perpetual inventory system? A. Inventory information is in real-time. B. Inventory is automatically updated. C. It allows managers to make current decisions about purchases, stock, and sales. D. It is cost-prohibitive.
A JIT inventory management system maintains which of the following? a. Goods should be pushed through the system on a fixed schedule based on anticipated demand. b. Goods should be pulled through the system by present demand. c. Total inventory costs are minimized by balancing setup and carrying costs. d. Inventories are needed to avoid stock-out costs.
One reason for inventory is to prevent shutdowns. How does the JIT approach to inventory management deal with this potential problem?
Which of the following is an advantage of the periodic inventory system? A. frequent physical inventory counts B. cost prohibitive C. time consuming D. real-time information for managers
Which of the following describes the economic order quantity (EOQ)? a. It is associated with a pull inventory system. b. It is the heart of a JIT purchasing system. c. It minimizes total ordering and carrying costs. d. It minimizes stock-out costs.
Explain why, in the traditional view of inventory, carrying costs increase as ordering costs decrease.
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Why do consignment arrangements present a challenge in inventory management? Explain.
Why are perpetual inventory systems more expensive to operate than periodic inventory systems? What conditions justify the additional cost of a perpetual inventory system?
Does the use of a perpetual system eliminate the need for taking a physical inventory count?
What are two advantages and disadvantages of the periodic inventory system?
Considering the following information, and applying the lower-of-cost-or-market approach, what is the correct value that should be reported on the balance sheet for the inventory?