Latent & Manifest Variables

Latent Variable

The Variable that is not directly observed but are rather inferred (through a mathematical model) from other variables that are observed (directly measured).

This variable needs a manifest variable assigned to it as an indicator.

Manifest Variables

Variable that can be directly measured or observed.

Indicators of JIT

JIT1 Our company implements pull production system

JIT2 We use kanban to authorize production.

JIT3 We use kanban to authorize material movement.

JIT4 We produce a product only when it is requested by its user.

Indicators of Cost Reduction

COST1 Our average unit manufacturing cost have reduced

COST2 Our average internal failure costs have reduced

COST3 Our average external failure costs have reduced

COST4 Our overall inventory costs have reduced