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Just-In-Time (JIT): An inventory management approach that seeks to minimize inventory levels by receiving goods only when needed for production or sale.
Just-In-Time (JIT) is an inventory management approach that seeks to minimize inventory levels by receiving goods only when needed for production or sale. Under this approach, inventory is ordered and received just in time to meet customer demand, with little or no buffer stock held in inventory.
The goal of JIT is to reduce the costs associated with holding excess inventory, such as storage costs, obsolescence, and waste, while maintaining high levels of product availability and customer satisfaction. JIT relies on close coordination between suppliers, production, and sales to ensure that inventory is received and used efficiently and effectively.
There are several advantages of using a JIT inventory management approach:
While JIT offers many benefits, it does require careful planning and coordination with suppliers to ensure that inventory is received and used effectively. JIT can also increase the risk of stockouts if inventory is not received on time, which can lead to lost sales and reduced customer satisfaction.
Overall, JIT is an effective inventory management approach that can help businesses reduce costs, improve efficiency, and enhance customer satisfaction. By carefully managing inventory levels and coordinating with suppliers, businesses can optimize their operations and achieve long-term success.