ACCA FM · Chapter 4 · Question 6 of 12
Which of the following is a feature of a just-in-time (JIT) inventory system?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: C) Close relationships with a small number of reliable suppliers who deliver frequently in small batches
Explanation
JIT aims to minimise inventory by receiving materials only as they are needed for production and producing only to meet demand. This requires dependable suppliers, frequent small deliveries and high quality. Buffer inventory, bulk buying and long production runs all increase inventory, which JIT seeks to avoid.
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