Which statement best describes the risk of JIT?

• A. A common risk of JIT is increased vulnerability to supply disruption.
• B. JIT increases finished goods inventory.
• C. JIT eliminates the need for supplier relationships.
• D. JIT guarantees delivery on time regardless of variability.

Answer: (A)

The main idea is that JIT reduces inventory to a minimum and relies on a smooth, continuous flow of materials to match demand. Because there’s little or no buffer stock, any disruption in the supply chain—delays from suppliers, quality problems, transportation holdups, or sudden spikes in demand—can quickly halt production. This makes JIT particularly vulnerable to supply disruptions, so the statement about increased vulnerability is the best description.

JIT does not increase finished goods inventory; it aims to minimize it by producing what’s needed when it’s needed. It also does not eliminate the need for supplier relationships; in fact, it depends on reliable, close cooperation with suppliers to avoid delays. And it does not guarantee on-time delivery regardless of variability; if there’s variability in supply or demand, JIT systems can struggle because there’s little slack to absorb those fluctuations.