What kind of purchasing system allows products to be received close to when they're needed?

What kind of purchasing system allows products to be received close to when they're needed?

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

Answer: (C)

Just-in-time purchasing focuses on receiving materials almost exactly when they will be used in production, keeping inventory levels very low and aligning deliveries with the production schedule. This approach minimizes carrying costs, reduces storage space needs, and helps prevent waste or obsolescence because items aren’t sitting idle in stock. It requires reliable suppliers, precise demand signaling, and responsive logistics, but when those conditions are met, materials arrive right as they’re needed, keeping production smooth without excess inventory. Other options don’t fit as well because they address different concerns. Economic order quantity is about calculating an optimal order size to minimize total costs (ordering plus holding costs) over time, not about timing deliveries to the exact usage moment. A blanket purchase means a standing agreement with a supplier for a range of purchases, but it doesn’t on its own ensure deliveries occur close to when they’re needed. Fixed ordering relies on regular, fixed-interval or fixed-amount orders regardless of actual demand, so it’s not responsive to the production schedule.

Just-in-time purchasing focuses on receiving materials almost exactly when they will be used in production, keeping inventory levels very low and aligning deliveries with the production schedule. This approach minimizes carrying costs, reduces storage space needs, and helps prevent waste or obsolescence because items aren’t sitting idle in stock. It requires reliable suppliers, precise demand signaling, and responsive logistics, but when those conditions are met, materials arrive right as they’re needed, keeping production smooth without excess inventory.

Other options don’t fit as well because they address different concerns. Economic order quantity is about calculating an optimal order size to minimize total costs (ordering plus holding costs) over time, not about timing deliveries to the exact usage moment. A blanket purchase means a standing agreement with a supplier for a range of purchases, but it doesn’t on its own ensure deliveries occur close to when they’re needed. Fixed ordering relies on regular, fixed-interval or fixed-amount orders regardless of actual demand, so it’s not responsive to the production schedule.