Question Tag: JIT

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PM – Nov 2024 – L2 – Q2 – Cost Management Strategies

Evaluation of Ope-Olu Limited's inventory holding cost and the impact of switching to a JIT production system.

Question

Ope-Olu Limited produces and sells household items. For a particular product, the marketing department has prepared the following quarterly expected demand for next year:

Quarter	Expected Demand (Units)
1	400,000
2	440,000
3	760,000
4	560,000

The existing production facility can only produce 540,000 units per quarter under regular time. However, it is possible to increase output by 40% if working overtime is introduced.

It is the policy of the company to manufacture units using a constant level of production system. This means that although the opening and closing levels of inventory for the year are zero units, there are increases and decreases in the quarterly inventory levels. Based on this policy, the unit selling price, variable production costs, and contribution for next year are expected to be as follows:

Additional Information:

Overtime is paid at 150% of the normal rate, and the unit variable production overhead cost will increase by 25% for those units produced during overtime.
The company incurs a holding cost (based on average inventory) of N25 per unit per quarter for each item that is held in inventory.
The company is considering switching to a Just-in-Time (JIT) production system due to fluctuating sales demand.

Required:

a. Discuss generally, the key conditions that are necessary for the successful implementation of a JIT manufacturing system. (7 Marks)

b. Calculate the cost of holding inventory for each of the quarters and the year in total under the current production system. (6 Marks)

c. Calculate the financial impact of changing to a JIT production system. (7 Marks)

Answer

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Tags: Cost Analysis, Demand forecast, Inventory Holding, JIT, Overtime Production
Level: Level 2

Topic: Cost Management Strategies

MA – Mar 2024 – L2 – Q4b – Decision making techniques

This question identifies the challenges associated with the implementation of a Just-In-Time (JIT) inventory management system.

Question

Just-In-Time (JIT) is an inventory management system in which goods are received from suppliers only as they are needed. The main objective of this method is to reduce inventory holding costs and increase inventory turnover. Despite the benefits of JIT, it has some disadvantages.

Required:
Examine THREE (3) challenges associated with the implementation of JIT Inventory Management System.

Answer

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Tags: Inventory Management, JIT, Operational Efficiency, Supply Chain
Level: Level 2

Topic: Decision making techniques
Series: MAR 2024

MA – Dec 2023 – L2 – Q2c – Decision making techniques

This question explains why standard costing may not be appropriate in a Just-In-Time (JIT) and Total Quality Management (TQM) environment.

Question

Explain why a standard costing system may not be considered appropriate for the following modern manufacturing environments listed below:
i) Just-In-Time (JIT).
ii) Total Quality Management (TQM).

Answer

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Tags: JIT, Manufacturing, Standard Costing, TQM
Level: Level 2

Topic: Decision making techniques
Series: DEC 2023

MA – Dec 2023 – L2 – Q2b – Decision making techniques

This question outlines the conditions required for the successful operation of a JIT inventory management system.

Question

Explain THREE (3) conditions that must prevail to make the operation of a Just-In-Time (JIT) inventory management system successful.

Answer

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Tags: Decision Making, Inventory Management, JIT
Level: Level 2

Topic: Decision making techniques
Series: DEC 2023

BMIS – May 2016 – L1 – Q6b – Operations strategy

Explain Just-in-Time inventory control and state four advantages of its use in a manufacturing company

Question

i) Explain Just-in-Time inventory control.
ii) State FOUR advantages of its use in a manufacturing company.

Answer

Find Related Questions by Tags, levels, etc.

Tags: Cost reduction, Inventory Control, JIT, Just-in-Time, Manufacturing Efficiency
Level: Level 1

Topic: Operations strategy
Series: MAY 2016

PM – Nov 2024 – L2 – Q2 – Cost Management Strategies

Evaluation of Ope-Olu Limited's inventory holding cost and the impact of switching to a JIT production system.

Question

Ope-Olu Limited produces and sells household items. For a particular product, the marketing department has prepared the following quarterly expected demand for next year:

Quarter	Expected Demand (Units)
1	400,000
2	440,000
3	760,000
4	560,000

The existing production facility can only produce 540,000 units per quarter under regular time. However, it is possible to increase output by 40% if working overtime is introduced.

Additional Information:

Overtime is paid at 150% of the normal rate, and the unit variable production overhead cost will increase by 25% for those units produced during overtime.
The company incurs a holding cost (based on average inventory) of N25 per unit per quarter for each item that is held in inventory.
The company is considering switching to a Just-in-Time (JIT) production system due to fluctuating sales demand.

Required:

a. Discuss generally, the key conditions that are necessary for the successful implementation of a JIT manufacturing system. (7 Marks)

b. Calculate the cost of holding inventory for each of the quarters and the year in total under the current production system. (6 Marks)

c. Calculate the financial impact of changing to a JIT production system. (7 Marks)

Answer

Find Related Questions by Tags, levels, etc.

Tags: Cost Analysis, Demand forecast, Inventory Holding, JIT, Overtime Production
Level: Level 2

Topic: Cost Management Strategies

MA – Mar 2024 – L2 – Q4b – Decision making techniques

This question identifies the challenges associated with the implementation of a Just-In-Time (JIT) inventory management system.

Question

Required:
Examine THREE (3) challenges associated with the implementation of JIT Inventory Management System.

Answer

Find Related Questions by Tags, levels, etc.

Tags: Inventory Management, JIT, Operational Efficiency, Supply Chain
Level: Level 2

Topic: Decision making techniques
Series: MAR 2024

MA – Dec 2023 – L2 – Q2c – Decision making techniques

This question explains why standard costing may not be appropriate in a Just-In-Time (JIT) and Total Quality Management (TQM) environment.

Question

Explain why a standard costing system may not be considered appropriate for the following modern manufacturing environments listed below:
i) Just-In-Time (JIT).
ii) Total Quality Management (TQM).

Answer

Find Related Questions by Tags, levels, etc.

Tags: JIT, Manufacturing, Standard Costing, TQM
Level: Level 2

Topic: Decision making techniques
Series: DEC 2023

MA – Dec 2023 – L2 – Q2b – Decision making techniques

This question outlines the conditions required for the successful operation of a JIT inventory management system.

Question

Explain THREE (3) conditions that must prevail to make the operation of a Just-In-Time (JIT) inventory management system successful.

Answer

Find Related Questions by Tags, levels, etc.

Tags: Decision Making, Inventory Management, JIT
Level: Level 2

Topic: Decision making techniques
Series: DEC 2023

BMIS – May 2016 – L1 – Q6b – Operations strategy

Explain Just-in-Time inventory control and state four advantages of its use in a manufacturing company

Question

i) Explain Just-in-Time inventory control.
ii) State FOUR advantages of its use in a manufacturing company.

Answer

Find Related Questions by Tags, levels, etc.

Tags: Cost reduction, Inventory Control, JIT, Just-in-Time, Manufacturing Efficiency
Level: Level 1

Topic: Operations strategy
Series: MAY 2016

Question Tag: JIT

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PM – Nov 2024 – L2 – Q2 – Cost Management Strategies

Evaluation of Ope-Olu Limited's inventory holding cost and the impact of switching to a JIT production system.

MA – Mar 2024 – L2 – Q4b – Decision making techniques

This question identifies the challenges associated with the implementation of a Just-In-Time (JIT) inventory management system.

MA – Dec 2023 – L2 – Q2c – Decision making techniques

This question explains why standard costing may not be appropriate in a Just-In-Time (JIT) and Total Quality Management (TQM) environment.

MA – Dec 2023 – L2 – Q2b – Decision making techniques

This question outlines the conditions required for the successful operation of a JIT inventory management system.

BMIS – May 2016 – L1 – Q6b – Operations strategy

Explain Just-in-Time inventory control and state four advantages of its use in a manufacturing company

PM – Nov 2024 – L2 – Q2 – Cost Management Strategies

Evaluation of Ope-Olu Limited's inventory holding cost and the impact of switching to a JIT production system.

MA – Mar 2024 – L2 – Q4b – Decision making techniques

This question identifies the challenges associated with the implementation of a Just-In-Time (JIT) inventory management system.

MA – Dec 2023 – L2 – Q2c – Decision making techniques

This question explains why standard costing may not be appropriate in a Just-In-Time (JIT) and Total Quality Management (TQM) environment.

MA – Dec 2023 – L2 – Q2b – Decision making techniques

This question outlines the conditions required for the successful operation of a JIT inventory management system.

BMIS – May 2016 – L1 – Q6b – Operations strategy

Explain Just-in-Time inventory control and state four advantages of its use in a manufacturing company

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