## Just-In-Time (JIT) Inventory Management

JIT is an inventory system that aims for zero inventory in stores — materials are purchased only when needed for production.

Core principle: buy and produce only when required, avoiding excess stock.
Also called: Demand Pull System or Pull Through Production System.

### Key Principles

1. Produce goods only when required.

2. Deliver products only when customers want them.

### How It Works (the pull sequence)

```

Demand for → Production → Material → Order for raw → Supplier sends

final product starts to requirement materials sent material for

process the sent to the to supplier production

demand Purchase dept

```

The customer order pulls production, which in turn pulls the material requirement to the purchase department — nothing is stocked in anticipation.

### Objectives

Minimise inventory cost
Eliminate waste
Ensure just-in-time delivery of both materials and finished products

⚠️ Common exam mistakes

Calling JIT a 'push' system — it is a Demand Pull / Pull Through Production system driven by the customer order.
Thinking JIT just reduces inventory; its aim is effectively zero store inventory with materials arriving exactly when needed.
Reversing the pull sequence — demand for the final product triggers production, which then triggers the material requirement, not the other way around.

Reference:

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