ABSTRACT: Just-in-time (JIT) is one of lean manufacturing tools, which evokes images of
effi ciency, minimising unnecessary costs and attractive value for many organisations. However,
the risks arising from these benefi ts have been ignored. These risks impact on system processes
disrupting all supply chain parties (suppliers/ customers) involved. This research focuses on how the
proposed model can simultaneously reduce costs and risks in JIT systems. This model is developed
to ascertain an optimal ordering strategy for procuring raw materials, in order to reduce the total
cost of the products, and at the same time to reduce the risks arising from this cost reduction within
production systems. Also, an example problem is proposed to demonstrate the effectiveness of the
developed model. Finally, in comparison between the cost of using the JIT system and the inventory
system, the results show the superiority of the use of inventory policy.