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| Topic: |
Business
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| Number of pages / Number of words: |
4 / 1048 |
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That is to say that for any given order size, supplying a customer that utilizes JIT is typically easier to do because individual shipments tend to be smaller for these customers and thus tend to be less demanding of the supplier. So it might be possible for suppliers, merely by the nature of their customers’ JIT system, to greatly expand their ability to fill larger orders without having to increase production capacity...
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A key concern here is the extent to which firms are dependent upon particular suppliers under such an inventory system. For example, if a firm were to commission a highly proprietary product to a single supplier (single suppliers being common in JIT), a JIT inventory system would put such a firm at an even higher risk of rip-off on behalf of the supplier because the firm would have no immediate inventory to buffer an interruption of supply...
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