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Answer (D) is correct . The objective of a JIT system is to reduce carrying costs by eliminating inventories and increasing the deliveries made by suppliers. Ideally, shipments are received just in time to be incorporated into the manufacturing process. This system increases the risk of stockout costs because the inventory buffer is reduced or eliminated.

Answer (A) is incorrect because The supplier may seek a concession on the selling price that will raise purchasing costs, but the manufacturing company’s stockout costs will increase.
Answer (B) is incorrect because The cost of quality is not necessarily affected by a JIT system.
Answer (C) is incorrect because More purchase orders are processed by the manufacturer, so the ordering costs are likely to increase. However, the cost of quality is not necessarily affected by a JIT system.