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

Which of the following is a characteristic of a Just in Time (JIT) purchasing arrangement with suppliers?

JIT purchasing uses a few certified suppliers under long-term contracts who make frequent small deliveries. Quality is assured at source, so gate inspection is reduced. Bulk buying, lowest-price-only selection and heavy incoming inspection belong to traditional purchasing, not JIT.

  1. ALarge, infrequent deliveries to obtain bulk discounts
  2. BFew, certified suppliers with long-term contracts and frequent small deliveriesCorrect
  3. CSelection of the supplier solely on the lowest quoted price per unit
  4. DHeavy incoming inspection of every consignment at the factory gate

Explanation

JIT purchasing relies on a small number of reliable suppliers, often under long-term contracts, delivering small lots frequently. Supplier quality is certified so that incoming inspection is minimised. Bulk buying and price-only selection are features of traditional purchasing.

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