Based on inventory turnover rates of four cafes (Green 2, Red 4, Blue 6, Yellow 3), which is most likely to use just-in-time purchasing?

Based on inventory turnover rates of four cafes (Green 2, Red 4, Blue 6, Yellow 3), which is most likely to use just-in-time purchasing?

• A. The Green Café
• B. The Red Café
• C. The Blue Café
• D. The Yellow Café

Answer: (C)

Understanding how quickly a business turns its inventory into sales helps identify purchasing approaches. Just-in-time purchasing aims to keep very little stock on hand and to receive goods only as they are needed to meet demand, which typically happens in environments with rapid inventory turnover and steady, predictable demand. The Blue Café has the highest turnover rate among the four, meaning its inventory moves quickly relative to its sales. That quick movement fits the JIT idea of minimizing on-hand inventory and ordering more frequently in small lots to match demand. The other cafés show slower turnover, which usually requires maintaining larger safety stocks to avoid stockouts, making a pure JIT approach less likely. So the Blue Café is most likely to use just-in-time purchasing.

Understanding how quickly a business turns its inventory into sales helps identify purchasing approaches. Just-in-time purchasing aims to keep very little stock on hand and to receive goods only as they are needed to meet demand, which typically happens in environments with rapid inventory turnover and steady, predictable demand. The Blue Café has the highest turnover rate among the four, meaning its inventory moves quickly relative to its sales. That quick movement fits the JIT idea of minimizing on-hand inventory and ordering more frequently in small lots to match demand. The other cafés show slower turnover, which usually requires maintaining larger safety stocks to avoid stockouts, making a pure JIT approach less likely. So the Blue Café is most likely to use just-in-time purchasing.