• Skip to primary navigation
  • Skip to main content
  • Skip to primary sidebar
Free ACCA & CIMA online courses from OpenTuition

Free ACCA & CIMA online courses from OpenTuition

Free Notes, Lectures, Tests and Forums for ACCA and CIMA exams

  • ACCA
  • CIMA
  • FIA
  • OBU
  • Books
  • Forums
  • Search
  • Register
  • Login
  • ACCA Forums
  • Ask ACCA Tutor
  • CIMA Forums
  • Ask CIMA Tutor
  • FIA
  • OBU
  • Buy/Sell Books
  • All Forums
  • Latest Topics

New BPP books are now available for September 2023 ACCA & FIA exams - get your discount code >>

Just in Time

Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA PM Exams › Just in Time

  • This topic has 3 replies, 2 voices, and was last updated 2 weeks ago by LMR1006.
Viewing 4 posts - 1 through 4 (of 4 total)
  • Author
    Posts
  • May 11, 2023 at 8:36 am #684199
    VikasK
    Participant
    • Topics: 56
    • Replies: 83
    • ☆☆

    Hello Tutor. Hope you are doing well. Can you please tell me, in case an organisation uses JIT approach.

    Whether the cost associated to the following activities would increase or decrease.

    i) The Cost of Recording the Inventory.
    ii) Material Handling Cost.

    May 11, 2023 at 12:41 pm #684203
    LMR1006
    Keymaster
    • Topics: 0
    • Replies: 80
    • ☆☆

    JIT production systems cut inventory costs because manufacturers receive materials and parts as needed for production and do not have to pay storage costs.

    The JIT model reduces the costs of procuring, managing and storing excess raw materials and inventory. This results in a higher inventory turnover which in turn prevents inventory from sitting in your warehouse for too long and becoming obsolete.
    You can also receive and store deliveries in the smallest possible quantities, virtually eliminating excess raw material inventories. Local sourcing ensures that your suppliers are located near your company’s production facilities, enabling timely deliveries and reducing the need for safety stock.

    May 11, 2023 at 3:03 pm #684208
    VikasK
    Participant
    • Topics: 56
    • Replies: 83
    • ☆☆

    Thankyou for the brief summary of the JIT Tutor :).

    But as you have mentioned “JIT model reduces the costs of procuring”. Isn’t that false. Because since I’ll be placing order only when i need to inventory for production. Therefore the Inventory Ordering Cost shall increase.

    As the number of orders placed would increase.

    And I’m still a bit confused w.r.t Recording Cost, shall it also increase as i might have to record the incoming and outgoing is inventory multiple times

    May 11, 2023 at 6:42 pm #684211
    LMR1006
    Keymaster
    • Topics: 0
    • Replies: 80
    • ☆☆

    Cost of procurement means more than order costs.
    Your cost of holding goes down with JIT, you don’t hold any buffer under JIT.

    The efficiency and cost saving of JIT and holding costs reductions are likely to out way the increase in order cost.
    If its say a large manufacturer they are likely to have more control over their supply chain which means they can force the cost of ordering to be kept low.

  • Author
    Posts
Viewing 4 posts - 1 through 4 (of 4 total)
  • You must be logged in to reply to this topic.
Log In

Primary Sidebar

ACCA News:

Changes to the SBL exam from September 2023

ACCA My Exam Performance for non-variant Applied Skills exams is available NOW

NEW! Download the ACCA Pass Guide

FREE Verifiable CPD for ACCA Members

ACCA mock exams and debrief videos

ACCA Options:  “Read the Mind of the Marker” articles

Subscribe to ACCA’s Student Accountant Direct

 

Donate

If you have benefited from OpenTuition please donate.

ACCA CBE 2023 Exams

Instant Poll * How was your exam, and what was the result?

BT CBE exam was.. | MA CBE exam was..
FA CBE exam was.. | LW CBE exam was..

Specially for OpenTuition students

20% off BPP Books

Get BPP Discount Code

Latest comments

  • John Moffat on Accruals and Prepayments (part d) – ACCA Financial Accounting (FA) lectures
  • Ashvin5 on Foreign exchange risk management (1) Part 6 – ACCA (AFM) lectures
  • Ashvin5 on Foreign exchange risk management (1) Part 6 – ACCA (AFM) lectures
  • zuhairabbas on ACCA AB Chapter 21 – Marketing – Questions
  • Bleacheyj on Accruals and Prepayments (part d) – ACCA Financial Accounting (FA) lectures

Copyright © 2023 · Support · Contact · Advertising · OpenLicense · About · Sitemap · Comments · Log in


We use cookies to show you relevant advertising, find out more: Privacy Policy · Cookie Policy