Total Vendee Cost: An Economic Model for Just in Time


The advantage of a Just in Time (JIT) manufacturing and delivery system is the minimization of production costs by reducing the manufacturer's inventory and work-in-process to near zero. The cost savings of a JIT manufacturing and delivery system can be quantified. This paper outlines an economic model to calculate the expected total cost to the manufacturer in a fully integrated Just in Time (JIT) delivery and manufacturing environment. A brief description of the advantages and applications of a Just in Time (JIT) system is provided initially. This discussion highlights the importance of quality, quantity and a timely delivery of supplies to a JIT system. These important variables are incorporated into the economic model and the resulting mathematical model provides the manufacturer a quantitative method for evaluating the Just in Time (JIT) system and the JIT supplier. The individual cost constituents of the model are defined and discussed in detail, including the method of collecting or locating the needed data in the structure of a typical corporate accounting system. Some methods for minimizing the cost components in a JIT system are discussed. A learning curve analysis is provided to illustrate the expected decrease in the unit cost and the quality-related costs as the JIT system reaches a steady state operation. Several flowcharts illustrate how the model should be used to quantify the benefits of a JIT system. The paper concludes with an analysis of the cost of implementing and using the proposed model versus the expected benefits.


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Graduation Date





Swart, William W.


Master of Science (M.S.)


College of Engineering


Industrial Engineering and Management Systems





Length of Campus-only Access


Access Status

Masters Thesis (Open Access)


Dissertations, Academic -- Engineering; Engineering -- Dissertations, Academic

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