2016-11-21 00:00:00 Finance and Accounting English Some businesses employ the just-in-time inventory management strategy. Find out its advantages and disadvantages. https://d1bkf7psx818ah.cloudfront.net/wp-content/uploads/2017/03/08214827/Jewelry-Restorer-Makes-Final-Touches-On-A-Repair-After-Receiving-Special-Order-Supply-Shipment.jpg What Is Just-in-Time Inventory Management?

What Is Just-in-Time Inventory Management?

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Just-in-time inventory management is a strategy that businesses use to reduce inventory costs. Businesses that employ this strategy maintain low inventory levels and only order more goods from their suppliers when needed.

For example, a computer repair business typically doesn’t keep a lot of parts in inventory. When a customer brings in a computer for repair, it examines the computer and orders the required parts to perform the repair from the supplier.

The advantages of this inventory management strategy are that businesses can keep their inventory costs low and eliminate the need to rent extra space to store inventory. The main disadvantage of this strategy is that businesses rely heavily on their suppliers to supply the products they need on time.

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Information may be abridged and therefore incomplete. This document/information does not constitute, and should not be considered a substitute for, legal or financial advice. Each financial situation is different, the advice provided is intended to be general. Please contact your financial or legal advisors for information specific to your situation.

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