The efficiency gains resulting from a just-in-time inventory management system will allow a firm to reduce its level of inventories permanently by $473,000. What is the most the firm should be willing to pay for installing the system

Respuesta :

Answer:

$473,000

Explanation:

Since the company can gain up to $473,000 by adopting a just in time (JIT) inventory management system, then that is the maximum amount of money that it should be willing to to spend on adopting and installing the system. It wouldn't make sense to spend more, and the less they spend the better. But the question refers to the maximum amount they should pay and that equals the total possible savings.