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Question - John Smith, a teacher at States Middle School, is in charge of ordering the shirts to be sold for the school's annual fund-raising project. The shirts are printed with a special States School logo. In some years, the supply of shirts has been insufficient to satisfy the number of sales orders. In other years, shirts have been left over. Excess shirts are normally donated to some charitable organization. Shirts cost the school $11 each and are normally sold for $27 each. Mr. Smith has decided to order 1,575 shirts.
Explain how a JIT inventory system could maximize profitability by eliminating waste and opportunity costs.
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