Final answer:
Just-in-time inventory systems are designed to minimize various costs including those associated with storage space, waste, and opportunity costs by ensuring that materials are delivered exactly when needed in the production process.
Step-by-step explanation:
Just-in-time (JIT) inventory systems are designed to minimize costs associated with storage space, waste, and opportunity cost. The core objective of JIT is to have materials delivered exactly when they are needed in the production process, thereby reducing the need for storage and the costs that come with it. This method helps companies avoid the excess cost of storing large quantities of inventory that may not be immediately needed.
When considering just-in-time systems, they offer several benefits. They can lead to better quality control since issues with parts are identified quickly. Additionally, they can lead to economies of scale where large volumes of products are produced at lower per-unit costs, and they provide a strategy to navigate around congested transportation networks by reducing the need to move large quantities of goods frequently.