Problem

A main goal of JIT is zero inventories. a. Assume your company does not aspire to JI...

A main goal of JIT is zero inventories.

a. Assume your company does not aspire to JIT and has $1,000,000 in raw materials in stock. Identify costs that may be incurred to maintain the inventory level.

b. Now assume that you implement JIT, and your raw materials in stock drop to zero. Explain how you expect this change to impact your income statement and balance sheet.

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