ACCA Performance Management (F5) Certification Practice Exam

What outcome is associated with effective JIT implementation?

1. Larger inventories of finished goods

2. Enhanced material utilization and reduced waste

3. Increased lead times in production

4. Higher levels of production employment

The correct answer is: Enhanced material utilization and reduced waste

Effective Just-in-Time (JIT) implementation focuses on streamlining production processes to minimize inventory levels and enhance efficiency. One of the primary outcomes of this approach is improved material utilization and reduced waste. By aligning production closely with demand, JIT minimizes excess materials and inventory, ensuring that resources are used efficiently, which ultimately contributes to decreased waste. This focus on efficiency not only optimizes production processes but also enhances overall productivity and cost-effectiveness in operations. The approach is inherently designed to create a responsive production environment, where materials arrive exactly when needed, which helps in reducing stockpiling and excess supplies that can become obsolete or require additional storage space. This aspect of JIT emphasizes the philosophy of producing only what is required, when it is required, thus maximizing the resources used and minimizing any unproductive waste generated during production.