Just In Time Inventory
Not what you're looking for?
Neat Company wants to install a just-in-time (JIT) inventory system in order to significantly reduce its in-process inventories. The annual cost of the system is gauged to be $95,000. The financial manager estimates that with this system, the firm's average inventory investment will decline by 40% from its current level of $2.05 million. All other costs are expected to be unaffected by this system. The firm can earn 14% per year on equal-risk investments.
a. What is the annual cost savings expected to result from installation of the proposed JIT system?
b. Should the firm install the system?
Purchase this Solution
Solution Summary
The solution determines what is the annual cost savings expected to result from installation of the proposed JIT system.
Solution Preview
Decline in inventory investment = $2.05 million * 0.40 = $820,000
Amount saved by the ...
Purchase this Solution
Free BrainMass Quizzes
Situational Leadership
This quiz will help you better understand Situational Leadership and its theories.
Marketing Management Philosophies Quiz
A test on how well a student understands the basic assumptions of marketers on buyers that will form a basis of their marketing strategies.
Organizational Leadership Quiz
This quiz prepares a person to do well when it comes to studying organizational leadership in their studies.
Change and Resistance within Organizations
This quiz intended to help students understand change and resistance in organizations
MS Word 2010-Tricky Features
These questions are based on features of the previous word versions that were easy to figure out, but now seem more hidden to me.