Just-In-Time (JIT) is a lean manufacturing principle. What is its primary benefit?

• A. Minimizes inventory by receiving goods only as needed, reducing holding costs and waste, and improving cash flow.
• B. Increases buffer stock to guard against shortages.
• C. Requires large warehousing and storage costs.
• D. Delays production until materials arrive in bulk.

Answer: (A)

The main idea being tested is how JIT reduces waste and costs by aligning material flow tightly with demand, so inventory stays very low and everything arrives just when it’s needed.

The best answer says that JIT minimizes inventory by receiving goods only as needed, which lowers holding costs and waste and improves cash flow. When materials are kept to a minimum and pulled into production just in time, you avoid paying for extra storage, reduce the risk of obsolescence or spoilage, and free up capital that would otherwise be tied up in unused stock. This pull-based approach also tends to shorten lead times and streamline the production process, assuming suppliers and processes are reliable.

The other ideas don’t fit the JIT goal. Increasing buffer stock means more inventory and higher carrying costs, which runs counter to JIT’s purpose. Requiring large warehousing and storage costs similarly conflicts with keeping inventory minimal. Delaying production until materials arrive in bulk also contradicts the pull system, which aims to start work as soon as needed rather than waiting for bulk shipments.