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inventory - Coggle Diagram

- - - - advantages
        
        Capital invested in inventory is reduced and the opportunity cost of inventory holding is reduced.
        
        multi-skilled and adaptable staff required for JIT to work may gain improved motivation.
        
        greater flexibility needed for JIT leads to quicker response times to changes in consumer demand or tastes.
      - disadvantages
        
        Delivery costs will increase as frequent small deliveries are an essential feature of JIT.
        
        failure to receive supplies of materials or components in time will lead to expensive production delays.
        
        reduction in the bulk discounts offered by suppliers because each order is likely to be very small.
  - - - advantages
        
        Improves customer service; Customers expect products to be delivered quickly and on time.
        
        Reduces operating costs; production costs are cut as time is saved in converting raw materials into finished products.
        
        Improves profitability; By reducing wasted time, improving inventory management and creating a low-cost but efficient supply chain