Вопрос
QUESTION TWO a) Just -In -Time (JIT)manufacturing philosophy has been applied successfully by many companies worldwide. This philosophy requires among other things commitment and culture change. What is JIT and why is it a preferred inventory control method to the conventional methods like EOQ and ABC analysis? [10 Marks]
Решения
4
(212 Голоса)
Филипп
элита · Репетитор 8 лет
Ответ
a) JIT
Объяснение
Just-In-Time (JIT) is an inventory strategy that aligns raw-material orders from suppliers directly with production schedules. Companies use this strategy to increase efficiency and decrease waste by receiving goods only as they need them for the production process, which reduces inventory costs. JIT is a preferred inventory control method over conventional methods like Economic Order Quantity (EOQ) and ABC analysis for several reasons:1. **Cost Efficiency**: JIT helps in reducing the cost of holding inventory, which is a significant expense for many businesses. By minimizing the amount of inventory on hand, companies can save on storage, insurance, and taxes.2. **Improved Quality**: With JIT, defects are identified and corrected quickly because there is less inventory to hide problems. This leads to higher quality products.3. **Increased Space Utilization**: Companies can use the space previously occupied by large inventories for other value-added activities.4. **Better Supplier Relationships**: JIT fosters closer relationships with suppliers as companies work closely together to schedule deliveries around the clock production schedule.5. **Flexibility and Responsiveness**: Companies can quickly adapt to changes in customer demand or supply chain disruptions because they have less inventory to manage.6. **Reduced Lead Times**: By receiving goods only as they are needed, companies can reduce the lead time in their production process, which improves the overall speed of production.7. **Lean Manufacturing**: JIT is a key component of lean manufacturing, which aims to create more value with less work, waste, and defects. It aligns with the principles of lean by focusing on efficiency and eliminating waste.In contrast, EOQ and ABC analysis have their own advantages but do not offer the same level of efficiency and waste reduction as JIT. EOQ calculates the optimal order quantity that minimizes total holding costs and ordering costs, but it does not focus on reducing inventory levels to the same extent as JIT. ABC analysis categorizes inventory items into three categories (A, B, C) based on their value and frequency of use, which helps in prioritizing inventory management efforts but does not inherently reduce inventory levels as JIT does.Therefore, JIT is preferred because it aligns with modern manufacturing goals of reducing waste, improving quality, and increasing efficiency, making it a strategic choice for many companies worldwide.