In an Effort to Improve Its Competitive Position, J

Essay

In an effort to improve its competitive position, J. J. Borden Company recently introduced Just-in-Time (JIT) production techniques. Its management accountant assembled the following data regarding the recent change:
Inventory financing cost is estimated as 15% per year.
Required:
1. Estimate the net financial benefit (expressed in terms of operating income) that the company realized from the switch to JIT manufacturing.
2. List four (4) nonfinancial benefits the company might expect as a result to its move to JIT.
3. What are the primary expected costs of implementing a JIT system?