Which statement best describes Just-In-Time (JIT) inventory management?

Just-In-Time (JIT) inventory management is fundamentally about enhancing efficiency and minimizing waste within the supply chain. By receiving goods only as they are needed in the production process, JIT reduces the amount of inventory that must be held at any given time. This method allows organizations to operate with a leaner inventory, which translates to lower holding costs and reduced risk of obsolescence.

This approach necessitates precise coordination with suppliers to ensure that materials arrive right when required, which in turn helps optimize production schedules and resource utilization. By minimizing excess inventory, companies can respond more swiftly to market demands, making them more agile in changing environments.

The other statements do not align with the principles of JIT. Increasing stock levels or purchasing in bulk goes against the core intention of JIT, which is to reduce rather than increase inventory. Keeping a permanent stock for all products does not adhere to the flexibility that JIT aims to provide, as it advocates for responsiveness to actual demand rather than maintaining fixed stock levels.