Just-In-Time (JIT) inventory—also known as a quick-response (QR) delivery system — is a finished product inventory management system that times replenishment to actual daily sales. It is designed to reduce the lead time for receiving merchandise, thereby lowering inventory investment, improving customer service levels, and reducing distribution expenses.
Under this system, the retailer maintains lean inventories through frequent store deliveries of small lots. Point-of-sale information is exchanged daily between the retail outlet and distributors or manufacturers in order to time product delivery closer to actual demand.
Note that “just-in-time” is also a term used to describe a manufacturing methodology. For more information on the manufacturing definition, see Wikipedia.
- ^ American Marketing Association, AMA Dictionary.