Jit purchasing arrangements-jit benefits, Managerial Accounting

Assignment Help:

JIT purchasing arrangements

JIT philosophy also extends to adapting JIT purchasing techniques whereby delivery of material immediately precedes their use. By arranging with suppliers for more frequent deliveries stocks can be out to a minimum
Considerable savings in material handling expenses can be obtained by requiring suppliers to inspect materials before their delivery and guarantee their quality.

This improved service is obtained by giving more business to fewer suppliers and placing long tern purchasing orders, therefore the suppliers has an assurance of long term sales and can plan to meet this demand.

Companies that have executed JIT purchasing techniques have claimed to substantially reduce their investment in raw materials and work in progress stocks.

Other benefits comprise:

1. Considerable savings in factory space.
2. Big amount discount.
3. Savings in time from consulting with less suppliers
4. Reduction in paper work arising from issuing (long term orders) to a few suppliers rather than individual purchase order to many suppliers.


Related Discussions:- Jit purchasing arrangements-jit benefits

State the target pricing method, Rate of return or target pricing method ...

Rate of return or target pricing method Under this method of price determination first of all a rate of return desired by the enterprises on the amount of profit capital inves

What are the advantages of activity based costing, Advantages of activity b...

Advantages of activity based costing 1) It helps understanding the behavior of overhead costs and their relations ship to products services customers and market segments. 2)

The more competitive bid, Hornsby Manufacturing has four categories of ove...

Hornsby Manufacturing has four categories of overheads. The four categories and the expected overhead costs for each category for next year are as follows:   Maintenance  $140,000

Explain the terms - maintenance and improvement, Explain the terms - mainte...

Explain the terms - maintenance and improvement Maintenance ; under the maintenance function, the management must first establish policies rules directives and standard operat

Provision for contingencies, After determining the amount of working capita...

After determining the amount of working capital as in above, a specific amount say 5 percent or 10 percent may be added to cover contingencies. This is to be noted that facts depen

Cvp analysis and computer applications, CVP ANALYSIS AND COMPUTER APPLICATI...

CVP ANALYSIS AND COMPUTER APPLICATIONS The output from a CVP model is only as good as the input. The analysis will include assumptions about sales mix, production efficiency, p

Explain about cost centre, Explain about Cost centre: Meaning & defini...

Explain about Cost centre: Meaning & definition: cost centre is defined as a location, person or item of equipment (or group of them) in respect which costs may be ascertaine

Accounting period, 1. In common, accounting period is the time period refle...

1. In common, accounting period is the time period reflected by a series of financial statements.  2. In terms of taxation, it is twelve-month period a taxpayer uses to know

Cost classifications, How do the different cost classifications can assist ...

How do the different cost classifications can assist the management

Calculate the direct materials costs, XYZ Industries manufactures electroni...

XYZ Industries manufactures electronic testing equipment. XYZ also installs the equipment at customers' sites and ensures that it functions smoothly. Additional information on the

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd