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JIT stands for Just-In-Time. More than a standardized methodology or s

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JIT stands for Just-In-Time. More than a standardized methodology or s  [#permalink]

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New post 10 Mar 2020, 07:19
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Passage # 144, Date: 11-Jun-2020
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JIT stands for Just-In-Time. More than a standardized methodology or systematic process, it is a philosophy. JIT applies simple logical deduction to that which has been too often overlooked as the most basic and insignificant of operations in a business, and yet a company can find such power within this operation that the company might dominate the whole of the market. JIT is the underlying advantage /that gave rise to global juggernauts such as making the Walton family one of the richest in all history. So much of JIT is mere common sense, combined with a little basic technology, and yet, when it is used properly, a company will find an important competitive advantage in the most unlikely of places: inventory management.

At its core, JIT is merely the idea that companies should not hold inventory, regardless of whether it’s the inventory of finished products or raw materials. Instead of large shipments of inventory that are depleted over a considerable period of time, smaller but more frequent shipments which arrive exactly as they are needed (i.e.: they arrive “just in time”) are being coordinated by companies now. This change has two very important results. First, it reduces the costs associated with the storage of inventory. Second, and more importantly, it helps companies to be more responsive to changes in the market.

The improved market responsiveness comes as a result of the increased emphasis on inventory management required by JIT. Since a company does not hold any more inventory than it needs within a short period, should the market change in that time, then the company is not left with huge volumes of surplus inventory that will not sell well, and the company will be able to quickly acquire inventory of something new that has entered the market. Companies like even use technology to add every item sold to the shipping order as that item is scanned, allowing regional customization to be accomplished very quickly and consistently. Such cost and market efficiency has proven to be very important to such companies in maintaining competitive advantage.


Spoiler: :: OA
D

1: According to the passage, which of the following are ways in which JIT helps companies stay more responsive to changes in the market?

I. Lower propensity to hold surplus inventories
II. Greater ability to obtain new inventories in short time
III. Greater efficiency in regional customization

(A) I only
(B) II only
(C) III only
(D) I and II only
(E) I, II, and III


Spoiler: :: OA
B

2: The author of the passage is primarily concerned with

(A) explaining how JIT approaches can be implemented
(B) emphasizing the importance of effective inventory management as a source of competitive advantage
(C) explaining why JIT inventory management can be cost-detrimental
(D) describing how Wal-Mart has become so competitive
(E) emphasizing the importance of technology in inventory management


Spoiler: :: OA
E

3: What does the author mean when he/she refers to JIT as a philosophy?

(A) JIT forms a metaphysical belief structure.
(B) It is a standardized process with restrictive parameters.
(C) It should be applied to the manner in which people live their lives.
(D) It is a deductively-derived system of ethics and principles.
(E) It is a logical approach to inventory management but lacks defined procedures or specific goals.

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New post 12 Jun 2020, 01:00
+1 Kudos to posts containing answer explanation of all questions
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New post 12 Jun 2020, 07:49
In question number 3 correct answer is mentioned as E but first line clearly states: "More than a standardized methodology" which means it has defined procedures. Than how can E be right choice?
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New post 12 Jun 2020, 23:10
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ninja10 wrote:
In question number 3 correct answer is mentioned as E but first line clearly states: "More than a standardized methodology" which means it has defined procedures. Than how can E be right choice?



Hi ninja10,
The correct answer would be E only. What the starting sentences actually state: "More than a standardized methodology or systematic process, it is a philosophy. JIT applies simple logical deduction to that which has been too often overlooked as the most basic and insignificant of operations in a business, ".
What we can infer from it is: JIT is a logical approach, there are no explicit rules defined for that. It can be applied in any way for inventory management as suited by different businesses.

So E seems an apt answer.

Let me know if you still have any doubt.
thanks.
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New post 13 Jun 2020, 02:54
In question no 1 why the ans is not E.
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New post 13 Jun 2020, 09:38
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0358921 wrote:
In question no 1 why the ans is not E.


Hi 0358921,
E is not the answer to the 1st question, since Greater efficiency in regional customization is not the result of use of JIT, its just another method to maintain cost and market efficiency. It doesn't help companies stay responsive to the changes. It simply increases the maintanence.
If you see the last paragraph of the comprehension: "Companies like even use technology to add every item sold to the shipping order as that item is scanned, allowing regional customization to be accomplished very quickly and consistently."

thanks.
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New post 01 Jul 2020, 20:34
Can anyone post an explanation for Q3 Please?
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New post 01 Jul 2020, 21:30
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deep31993 wrote:
Can anyone post an explanation for Q3 Please?



Hi deep31993,
3: What does the author mean when he/she refers to JIT as a philosophy?

(A) JIT forms a metaphysical belief structure.
(B) It is a standardized process with restrictive parameters.
(C) It should be applied to the manner in which people live their lives.
(D) It is a deductively-derived system of ethics and principles.
(E) It is a logical approach to inventory management but lacks defined procedures or specific goals.

Correct Answer : E,
Explanation: As mentioned in the passage: ""More than a standardized methodology or systematic process, it is a philosophy. JIT applies simple logical deduction to that which has been too often overlooked as the most basic and insignificant of operations in a business, ".
What we can infer from it is: JIT is a logical approach, there are no explicit rules defined for that. It can be applied in any way for inventory management as suited by different businesses.

Hope this helps.
Thanks.
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Re: JIT stands for Just-In-Time. More than a standardized methodology or s   [#permalink] 01 Jul 2020, 21:30

JIT stands for Just-In-Time. More than a standardized methodology or s

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