What are the advantages and disadvantages of "just-in-time Inventory" for a company?
Critical Path Method
The critical path is the longest succession of tasks that has to be successfully completed to conclude a project entirely. The tasks involved in the sequence are called critical activities, as any task getting delayed will result in the whole project getting delayed. To determine the time duration of a project, the critical path has to be identified. The critical path method or CPM is used by project managers to evaluate the least amount of time required to finish each task with the least amount of delay.
Cost Analysis
The entire idea of cost of production or definition of production cost is applied corresponding or we can say that it is related to investment or money cost. Money cost or investment refers to any money expenditure which the firm or supplier or producer undertakes in purchasing or hiring factor of production or factor services.
Inventory Management
Inventory management is the process or system of handling all the goods that an organization owns. In simpler terms, inventory management deals with how a company orders, stores, and uses its goods.
Project Management
Project Management is all about management and optimum utilization of the resources in the best possible manner to develop the software as per the requirement of the client. Here the Project refers to the development of software to meet the end objective of the client by providing the required product or service within a specified Period of time and ensuring high quality. This can be done by managing all the available resources. In short, it can be defined as an application of knowledge, skills, tools, and techniques to meet the objective of the Project. It is the duty of a Project Manager to achieve the objective of the Project as per the specifications given by the client.
What are the advantages and disadvantages of "just-in-time Inventory" for a company?
Just-in-time or JIT inventory system is a popular management strategy that is used to minimize inventory usage and increase efficiency. It was firstly used in the Toyota manufacturing plant in order to meet their demand with minimum delay time.
JIT is a method where raw materials and labours are scheduled to arrive at the time when needed in the production process. Example, Apple, Amazon and Toyota use the JIT methodology successfully. There are certain advantages of using JIT inventory for a company which are as follows:
- Lesser storage space needed: JIT requires less warehouse space because of faster turnaround of stocks. Also, this adequate area allows companies to use it for other purposes.It also means savings in terms of goods insurance and renting a place. With lower amounts of goods being stored, less transportation costs and inventory maintenance cost is achieved.
- Reduced costs: Reduced costs are one of the most impactful benefits of this system. Various costs associated with ordering inventories such as carrying costs and ordering costs are taken care of. Companies are able to maintain a healthy cash flow system.
- Benefit to small companies: Since smaller investments are done in order to maintain inventories, smaller companies should go for JIT so as to meet the inventory requirements when needed. They do not have to invest more in storing inventories.
- Prevents overproduction: With limited resources and raw materials to be used in production, JIT helps in overproduction of finished goods which helps in maintaining the efficiency and effectiveness.
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