Question

(b) Complete the following steps in a ‘what if’ analysis for the introduction of a ‘just in time’* form of production materials supply to a car production unit.

• Explanation of the Activity

• Area of interest

• Sub-systems.

  (*‘Just in time’ is a method of ordering and delivery of stock parts employed by a company, where the company has delivered on a regular, often daily, basis only enough parts for a short period of production. Thus capital that would otherwise be tied up in large stockpiles of production materials is released and cost of storage is avoided.)

  Complete TABLE 2 by the generation of:

• ‘What if’ questions

• and solutions to potential problems.

What if	Immediate consequence	Ultimate consequence	Recommendations	Subsystems

TABLE 2

Answer 1

What is simply in Time (JIT)?
Just in time (JIT) is a list management methodology whereby materials, goods, and labor ar scheduled to arrive or be replenished precisely once required within the production method.

How will simply in Time (JIT) Work?
JIT works best for corporations mistreatment repetitive producing functions; hospitals, tiny corporations, and alternative entities might not realize JIT possible. for instance, let's assume that Company XYZ may be a tiny car maker. On Tuesdays the corporate assembles the automotive chassis, and therefore the staff place the windscreen in on Thursdays. With a simply in time inventory methodology, XYZ may need elements delivered precisely in the future before they have them. The chassis would be delivered on Monday and therefore the windscreen on Wednesdays.

The goal of JIT is to decrease prices by keeping merely enough inventory accessible to fulfill immediate production desires. Thus, so as to effectively use JIT a corporation should accurately forecast demand. JIT's encouragement of designing, simplification, and standardization is aimed toward reducing carrying prices by eliminating the expense of housing idle materials and lower the prices of defective merchandise, wasted house, additional instrumentality, overtime, pledge repair, and scrap. JIT additionally speeds the assembly method, thereby eliminating long lead times and rising delivery performance.

Companies that utilize JIT usually solely have a number of suppliers. because of the importance of receiving inventory once required, atiny low variety of suppliers build it simple to coordinate deliveries. to boot, the big orders placed by JIT corporations encourage suppliers to be committed to meeting delivery and quality necessities and supply bulk discounts, however semipermanent contracts could counter this profit.

Why will simply in Time (JIT) Matter?
JIT's specialize in potency emphasizes identification and correction of production obstacles. JIT proponents usually claim that inventory hides issues -- JIT prevents a corporation from mistreatment excess inventory to "smooth" operations if halficular|a specific|a selected} task takes longer than expected or a defective part is discovered within the system. this can be additionally why JIT corporations invest in preventive maintenance; once instrumentality breaks down, the complete method stops.

Possible indicators of a company's use of JIT ways ar high inventory turnover quantitative relations and high quality turnover ratio ratios. Low inventory balances additionally mean a company's alternative of accountancy ways has minimal impact.

What if product materials goes out of stock

Immediate consequence tracking of inventory goods

Ultimate consequence Number of suppliers

Recommendations Defective parts to be avoided

Subsystems Accountancy

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