3.2 Effect of JIT Philosophy
In JIT production system, finished products are manufactured when they are needed. Embracing JIT philosophy at a greater degree should result in a decline in finished goods and work-in-process level. Hence, it is expected that ending inventories to sales would decline throughout the period. To assess whether the sample companies have been
increasingly embracing JIT philosophy, a paired t-test will be conducted to test whether average ending inventory to sales at the beginning of the period studied is significantly different from that at the end of the period studied at the five percent
level of confidence when examined in aggregate for the total sample and separately for each of the three industries. It was hypothesized that: