Just in time purchasing is designed to do what?

Just in time purchasing is designed to do what?

• A. Just in time
• B. Economic order quantity
• C. Fixed interval replenishment
• D. Blanket purchase order

Answer: (A)

Just-in-time purchasing aims to minimize on-hand inventory and carrying costs by having materials arrive only when they are needed for production. It works as a pull system: as components are consumed, orders are triggered to replenish just enough to meet the next production need, often with small, frequent deliveries and close coordination with suppliers. This approach reduces space requirements, obsolescence, and cash tied up in stock, but it requires reliable suppliers, precise scheduling, and strong quality control. In contrast, the other concepts described involve different inventory ideas: optimizing order size under steady demand (not the timing of arrivals), replenishing at fixed intervals regardless of actual consumption, and using long-term agreements that cover multiple orders over a period.

Just-in-time purchasing aims to minimize on-hand inventory and carrying costs by having materials arrive only when they are needed for production. It works as a pull system: as components are consumed, orders are triggered to replenish just enough to meet the next production need, often with small, frequent deliveries and close coordination with suppliers. This approach reduces space requirements, obsolescence, and cash tied up in stock, but it requires reliable suppliers, precise scheduling, and strong quality control.

In contrast, the other concepts described involve different inventory ideas: optimizing order size under steady demand (not the timing of arrivals), replenishing at fixed intervals regardless of actual consumption, and using long-term agreements that cover multiple orders over a period.