Which system of inventory management is known as 'Demand Pull' or 'Pull through' system of production? Explain. Also, specify the two principles on…

Answer (a) Just In Time (JIT) Inventory Management is also known as 'Demand pull' or 'Pull through' system of production. JIT is a system of inventory management with an approach to have zero inventories in stores. According to this approach material should only be purchased when it is actually required for production. In this system, production process actually starts after the order for the products is received. Based on the demand, production process starts and the requirement for raw materials is sent to the purchase department for purchase. JIT is based on two principles (i) Produce goods only when it is required and (ii) the products should be delivered to customers at the time only when they want.