JIT Reduces Costs and Improves Efficiency Steps:

• Define JIT as a system producing goods only as needed to minimize inventory.
• Identify key benefits: lower holding costs (1), better cash flow from reduced stock (2), and minimized waste through precise demand matching (3).
• Verify all three align with JIT principles from lean manufacturing.
• Confirm no drawbacks negate these, making all options correct.

Why A is correct:

• JIT's core goal, per Toyota Production System, delivers all three benefits by eliminating excess inventory, as defined in operations management.

Why the others are wrong:

• B omits waste reduction, a primary JIT advantage.
• C excludes cash flow improvement from lower inventory ties.
• D ignores holding cost savings, central to JIT's economic value.

Final answer: A