Explain just-in-time inventory management as materials arriving immediately before use, reducing stock costs while increasing supply disruption and delay risks.
Extract A Lotus Garments Co. Egyptian business Lotus Garments Co. is one of the leading clothing manufacturers in the world. It produces clothing for the biggest names in denim such as Levi Strauss \& Co. and the Wrangler and Lee brands owned by the VF Corporation. Chairman and CEO Hossam Gabr, previously produced jackets and trousers but entered the denim business in 2002. Today 11,800 skilled employees at the Port Said factory can produce up to 26,000,000 items of clothing a year. Lotus Garments Co. has recently adopted both just in time (JIT) and total quality management (TQM) in order to keep up with international competition and give the flexibility to meet its customers' needs. The business meets all international standards for quality, production and health and safety. Although most pairs of jeans are exported to the USA, Lotus Garments Co. also supply clothing retailers in Egypt. It is planning to do two things. Firstly, to increase its sales in Egypt and secondly to reduce its annual total costs of $420m. By working closely with local suppliers Lotus Garments Co. believes it can continue to meet the needs of its customers for many years to come.
Extract B
Egyptian interest rates from 2010 to 2018
Analyse two possible problems for Lotus Garments Co. of using just in time (JIT).