Question 1

1.  What are The Cons of Just in Time Inventory Management Strategies

Accepted Answer

1. There is no scope for making any errors in just in time inventory management strategies as there is no excess inventory. Therefore, the company has to be very vigilant at all times.n2. J.I.T. will not be open to increased demand in production as there is no stock of inventory or raw materials available. The company is never ready for unexpected or massive orders.n3. Inventory management strategies depend on local suppliers to supply raw materials. It can be risky as local suppliers might fail to provide the needful inventory on time. Inability to meet client expectations can have a negative effect. Therefore, it becomes essential to maintain a strong relationship with the supplier to ensure a timely supply of raw materials as and when required.n4. Inventory management strategies require more planning to run the business because they do not keep a stock of inventories. Many clients order significant amounts of products during certain seasons. Higher demand requires a higher stock of merchandise. Therefore, preplanning, even with suppliers, is needed to ensure the supply of inventory at the time necessary.

Question 2

2. What are The Pros of Just in Time Inventory Management Strategies

Accepted Answer

1. The first and most important pro of just in time inventory management strategies is the reduction of wastage. They eliminate the risk of overstocking and damage to excess inventory. It reduces the risk of unsold inventory or unused piled up stock. When production is less, you can also quickly identify defective products.n2. Just in time, inventory management strategies also cause a reduction in the cost of purchasing and managing excess inventory. They are buying raw materials from local suppliers to ensure timely delivery of stock. As a result, maintaining massive warehouses is also not required.n3. J.I.T. inventory management strategies optimise production by eliminating delays by automating processes, and reducing product defects. Moreover, since a lot of time is saved just in time, companies can quickly produce and deliver new products.n4.If you compare just in time (J.I.T.) vs Just in case (J.I.C.), inventory management strategies are best suited for small scale companies. Overall costs incurred in just in time companies are less because they don't pile up extra stock, and there is no added cost on storage and warehousing.

Question 3

3. What areThe Pros of Just in Case Inventory Management Strategies

Accepted Answer

1. The first and most significant pros of just in case inventory management strategies is that a company can compete at any level of competitiveness by adopting these. With the excess stock in hand, they can supply products whenever demanded. What is more advantageous is that when competitors are out of stock, companies with extra stock are ready to sell.n2. If you compare just in time (J.I.T.) vs just in case (J.I.C.), J.I.C. companies benefit from reduced risk occurring from lost sales because they have excess inventory stock. The excess inventory allows J.I.C. companies to keep producing goods while getting more stock supply.n3. Since companies keep a large stock of inventories available at all times, it makes a lot of savings because it incurs vast discounts on bulk purchases. Moreover, these companies purchase lists when the cost is at its lowest.n4. Just in case inventory management strategies save the global supply chain in emergencies like the recent pandemic, when the whole world came to a standstill for weeks and months on end. Many companies following just in time inventory management strategies had to shut down because of a lack of inventory. But the just in case companies, who had excess inventory, kept the supply chain going because they did not have to stop production.n5. Just in case companies can indulge inefficient marketing strategies with the extra stock in hand. They can give out samples for promotion. This way, they can reach out to more people and expand their business.

Question 4

4. What are The Cons of Just in Case Inventory Management Strategies

Accepted Answer

1. The most significant disadvantage of just in case inventory management strategies is the excess cost incurred for storage and warehousing. Storage and warehouse costs can be excessively high, sometimes nearly twenty to thirty per cent of inventory value.n2. Since companies invest a lot of capital in procuring excess inventory, the money gets locked away. Therefore, the companies cannot use it in other aspects, such as advertising or increasing the business. The business loses flexibility, and thereby, the opportunity cost increases.n3. When a company stocks huge inventory and produces in excess, discovering a flaw might incur huge losses. Quality control becomes an issue when a huge pile of goods needs to go back to the market after modification.