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Just-In-Time: A Cross-sectional Plant Analysis

Author

Listed:
  • Jeffery L. Callen
  • Chris Fader
  • Itzhak Krinsky

Abstract

This paper uses a unique data base of plant-level cross-sectional data to analyse the relative performance of Just-in-time (JIT) plants operating in two distinct manufacturing industries: electronic-components and auto-parts. The multivariate tests show that JIT plants use significantly less work-in-process and finished goods inventories than do non-JIT plants. JIT plants are significantly more profitable than non-JIT plants. Furthermore, JIT plants have significantly smaller total and variable costs than do non-JIT plants. Fixed cost differences, on the other hand, are not significant. JIT plants exhibit significant learning curve effects in that the earlier adopters use less inventories and are more profitable than later adopters. JIT plants that claimed to be more successful at controlling process quality also tended to have significantly less work-in-process inventory, less total costs and more profits. On the other hand, JIT plants that claimed to be more successful at controlling product quality were not significantly different from other plants. Finally, unionization appears to have no impact on the relative performance of JIT versus non-JIT plants.

Suggested Citation

  • Jeffery L. Callen & Chris Fader & Itzhak Krinsky, 1997. "Just-In-Time: A Cross-sectional Plant Analysis," Quantitative Studies in Economics and Population Research Reports 325, McMaster University.
  • Handle: RePEc:mcm:qseprr:325
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    References listed on IDEAS

    as
    1. Denton, Frank T. & Gafni, Amiram & Spencer, Byron G., 1995. "The SHARP way to plan health care services: A description of the system and some illustrative applications in nursing human resource planning," Socio-Economic Planning Sciences, Elsevier, vol. 29(2), pages 125-137, June.
    2. Frank T. Denton & Christine H. Feaver & Byron G. Spencer, 1996. "The Future Population of Canada and Its Age Distribution," Independence and Economic Security of the Older Population Research Papers 3, McMaster University.
    3. Peter A. Diamond, 1996. "Proposals to Restructure Social Security," Journal of Economic Perspectives, American Economic Association, vol. 10(3), pages 67-88, Summer.
    4. Frank Denton & Byron Spencer, 1999. "How old is old? Revising the definition based on life table criteria," Mathematical Population Studies, Taylor & Francis Journals, vol. 7(2), pages 147-159.
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    More about this item

    Keywords

    just-in-time production; electronic components; auto-parts; inventory;

    JEL classification:

    • L23 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Organization of Production
    • L60 - Industrial Organization - - Industry Studies: Manufacturing - - - General

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