Healthy Times produces four types of frozen TV dinners that it sells to supermarkets and independent grocery stores. The company operates from two locations: a manufacturing plant and a refrigerated warehouse located a few blocks away. (Administrative offices are located in the manufacturing plant.)

The types of dinners to be produced each week are scheduled a week in advance, based on customer orders. The number of dinners produced, however, is always the same. The company runs its production facilities at full capacity—20,000 units per day—to minimize fixed manufacturing costs per unit.

Every Friday, local suppliers deliver to Healthy Times’s factory the fresh vegetables, chicken, fish, and other ingredients required for the following week’s production. (Materials are abundant in the region.) These ingredients then are cut into meal-sized portions, “fresh frozen” using special equipment, and transported by truck to the refrigerated warehouse. The company maintains an inventory of frozen ingredients equal to approximately two weeks’ production.

Instructions

With a group of students write a report to Marsha Osaka that covers the following issues:

a. In general terms, describe a JIT manufacturing system. Identify the basic goals of a JIT manufacturing system and any basic conditions that must exist for the system to operate efficiently.

b. Identify any non-value-added activities in Healthy Times’s operations that might be reduced or eliminated in a JIT system. Also identify specific types of costs that might be reduced or eliminated.

c. Assume that Healthy Times does adopt a JIT manufacturing system. Prepare a description of the company’s operations under such a system. (Your description should be consistent with the details provided above.)

d. Explain whether or not you think that a JIT system would work for Healthy Times. Identify any ethical concerns that Osaka should consider and provide specific reasons supporting your conclusion.