Hello John,
" A JIT system implies relatively low reorder cost"
1. Could you explain how the statement is correct?
-In a JIT system as order raw materials when we get an order; therefore for every order received, we place an order and hence increase the reorder costs/
2. Please explain where I am getting things wrong.
Thanks
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Working Capital
5y ago#1Certainly JIT means more orders.
However for it to be worthwhile adopting a JIT system, the reorder cost each time needs to be fairly small, otherwise the total reorder cost would get very high and make it not worthwhile doing.
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