Western Doors uses the traditional inventory system. The company is looking into a Just In Time (JIT) system and requires a return on investment of 13%. The company has determined the following changes would occur under the JIT system:

1. The company would likely incur lost sales of 2,000 units. Currently the company sells a door for $240 each and sells an average of 15,000 doors per year with total variable costs of $2,985,000.

2. Overtime premiums would increase by $106,000

3. Average inventory of $2,000,000 would decline by 70%.

4. The company pays $22,000 per year for re-tooling costs. These costs would increase by 25%. Maintenance costs would increase by $38,000 and plant insurance would decrease by $43,000.

5. A warehouse of 40,000 square feet will not be completely needed; the company estimates it can rent 50% of it for $6.00 per square foot.

Required: Calculate the net benefit or cost of implementing a JIT system. Should the company implement a JIT system?