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CMA Final · Strategic Cost Management · Just in Time (JIT)

A manufacturer moving to Just in Time wants to compare its purchasing approach before and after. Which of the following is a characteristic of a JIT purchasing system rather than a traditional purchasing system?

JIT purchasing uses frequent small deliveries from a few dependable suppliers under long-term agreements. This reduces inventory and ensures quality at source. Bulk orders, buffer stocks and price-only supplier selection are features of traditional purchasing, not JIT.

  1. ALarge batch orders from many suppliers to obtain quantity discounts
  2. BFrequent small deliveries from a few suppliers under long-term agreementsCorrect
  3. CEmphasis on buffer stock to protect against supply disruption
  4. DSelection of suppliers mainly on lowest quoted price

Explanation

JIT purchasing relies on a small number of reliable suppliers, long-term relationships and frequent small deliveries of assured quality. The other options describe traditional approaches: bulk buying for discounts, buffer stocks and price-based selection.

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