Question

Just-in-time inventory systems are designed to minimize ________?

1) the cost of waste
2) opportunity cost
3) the cost of storage space
4) all costs identified in the choices provided in this problem

Answer 1

Just-in-time inventory systems are designed to minimize the cost of storage space, the cost of waste, and other costs related to maintaining inventories, resulting in minimizing all costs identified in the provided choices.

Step-by-step explanation:

Just-in-time (JIT) inventory systems are designed to minimize the cost of storage space. By receiving materials only as they are needed in the production process, companies reduce inventory costs and increase efficiency. This method also helps to reduce the cost of waste, as it limits the amount of overstock and obsolete inventory that might accumulate. Furthermore, JIT systems can decrease other costs associated with large inventories such as taxes, insurance, and capital investment. Therefore, the answer is that JIT systems minimize all costs identified in the choices provided in this problem, making option 4 the correct choice.