How does the just-in-time inventory system help to reduce inventory costs?

Question by : How does the just-in-time inventory system help to reduce inventory costs?

Best answer:

Answer by Judy
A company has money invested in its inventory. With just-in-time, that amount is greatly reduced.

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One Response to “How does the just-in-time inventory system help to reduce inventory costs?”

  1. Kimberly at LoftisConsulting.com says:
    June 21, 2012 at 10:46 am

    Just-in-time inventory reduces costs by reducing the amount of inventory you need to have on hand to manufacture your product. This is done by the supplier not delivering the inventory until it is needed in the manufacturing process; hence, just-in-time. Also, you do not have the carrying cost of storing the inventory or your premises or the risk of damage to the inventory.

    Hope this helps.