Just-in-Time (JIT) Cost Analyzer
All costs entered should be annual estimates for a fair comparison.
Input Annual Cost Estimates:
Traditional Inventory System
Inventory Related Costs
$
Storage, insurance, obsolescence, capital tied up.
$
Cost per order x number of orders.
Operational & Other Costs
$
$
$
Just-in-Time (JIT) System
Inventory Related Costs (JIT)
$
$
Operational & Other Costs (JIT)
$
$
$
$
Potential Savings (JIT) - Enter as positive
$
$
Actions & Info
Tool Information
Compare estimated annual costs of a traditional inventory system versus a JIT system.
Savings in the JIT column will be subtracted from JIT costs.
JIT Cost Analysis Summary
Traditional System Annual Cost
-
JIT System Annual Cost
-
Potential Annual Savings with JIT
-
Qualitative Considerations for JIT:
Potential JIT Benefits
- Reduced inventory holding costs
- Improved cash flow
- Less waste (obsolescence, defects)
- Increased production efficiency
- Greater flexibility to customer demand
- Improved quality (defects caught earlier)
Potential JIT Risks/Challenges
- High dependency on suppliers
- Vulnerability to supply chain disruptions
- Less buffer for demand spikes
- Requires accurate forecasting
- May need significant process/system changes
- Potentially higher per-unit transportation costs
Disclaimer: This model provides an estimation. Actual costs and savings depend on specific operational details and thorough analysis.