Imagine that a major car company has been able to plan production to coincide with sales forecasts. As new inventory comes into the showroom, customers purchase it, and there is no unsold inventory and no unfilled orders. How can we best describe this phenomenon?

Question

Business

Spencer Marsh

31 March, 03:35

Imagine that a major car company has been able to plan production to coincide with sales forecasts. As new inventory comes into the showroom, customers purchase it, and there is no unsold inventory and no unfilled orders. How can we best describe this phenomenon?

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Answers (1)

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Jay · Answer 1

JIT production and JIT purchasing

Explanation:

JIT production and JIT purchasing under this process entity does not have extra material in stores and extra inventory produced.

as per the just in time

there is no benefit of holding inventory at stores

producing extra units does not add value they are useless until they are sold.

According to just in time inventory should be purchased when order has been placed and production process should start in order to meet the customers orders.

there are some conditions for this process

there should be very system to meet the order on time

there should be relaible production system units produced should not be poor quality goods

there should reliable suppliers to supply the material on time to meet the customers orders and avoid the stock out costs.