A system of production using minimal inventories and relying on prompt and frequent deliveries of materials and components from suppliers, arriving just before they are needed. This system also relies on prompt and reliable reporting of stock holding. It has the advantages of reducing the space needed to store inventories, and the interest costs of financing them. The just-in-time system may transfer the burden of holding stocks to suppliers, and is easily disrupted if transport arrangements break down.
|Reference: Oxford Press Dictonary of Economics, 5th edt.|