Abstract
Just-in-time (JIT) is one of lean manufacturing tools, which evokes images of efficiency, minimising unnecessary costs and attractive value for many organisations. However, the risks arising from these benefits have been ignored. These risks impact on system processes disrupting all supply chain parties (suppliers/customers) involved. This research focuses on how the proposed model can simultaneously reduce costs and risks in JIT systems. This model is developed to ascertain an optimal ordering strategy for procuring raw materials, in order to reduce the total cost of the products, and at the same time to reduce the risks arising from this cost reduction within production systems. Also, an example problem is proposed to demonstrate the effectiveness of the developed model. Finally, in comparison between the cost of using the JIT system and the inventory system, the results show the superiority of the use of inventory policy.
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