See this solution in the app Problem JIT production, relevant benefits, relevant costs. The Knot manufactures men's neckwear at its Spartanburg plant. The knot is considering implementing a JIT production system. The following are the estimated costs and benefits of JIT production: a. Annual additional tooling costs $250,000 annually. b. Average inventory would decline by 80% from the current level of $1,000,000. c. Insurance, space, materials-handling, and setup costs, which currently total $400,000 annually, would decline by 20%. d. The emphasis on quality inherent in JIT production would reduce rework costs by 25%. The Knot currently incurs $160,000 in annual rework costs. e. Improved product quality under JIT production would enable The Knot to raise the price of its product by $2 per unit. The Knot sells 100,000 units each year. The Knot's required rate of return on inventory investment is 15% per year. Required 1. Calculate the net benefit or cost to The Knot if it adopts. 2. What nonfinancial and qualitative factors should The Kn JIT production? 3. Suppose The Knot implements JIT production at its Spa measures The Knot could use to evaluate and control JIT Knot implementing an enterprise resource planning (ERI Step-by-step solution There is no solution to this problem yet. Get help from a Chegg subject expert. Ask an expert