What does 'just-in-time' inventory aim to achieve?

'Just-in-time' (JIT) inventory is a strategy aimed at aligning raw material orders with production schedules to minimize waste and reduce holding costs. This approach allows companies to operate more efficiently by receiving goods only as they are needed in the production process, thereby reducing inventory levels and eliminating excess stock. By synchronizing the supply of materials with the demand for finished products, JIT helps in maintaining lean operations, minimizing storage costs, and enhancing cash flow.

In contrast, the other options do not accurately reflect the goals of a JIT system. Excess stock for emergencies would contradict the principle of JIT, which seeks to minimize inventory. Reducing supplier numbers does not inherently relate to the JIT methodology but instead might be associated with supplier consolidation strategies. Finally, increasing warehouse space is also contrary to JIT principles, as the focus is on reducing the need for large storage areas by timing inventory deliveries precisely with production needs.