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Question 223 - CSCP discussion

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A firm has captured the following information for a product family:

The cash-to-cash cycle time is how many days?

A.
41
Answers
A.
41
B.
44
Answers
B.
44
C.
62
Answers
C.
62
D.
74
Answers
D.
74
Suggested answer: A

Explanation:

The cash-to-cash cycle time is calculated as the sum of days' sales outstanding (DSO), days' inventory outstanding (DIO), and minus days' payables outstanding (DPO). Using the provided data:

Supply of inventory (DIO) = 53 days

Payables outstanding (DPO) = 25 days

Receivables outstanding (DSO) = 34 days

Cash-to-cash cycle time: Cash-to-cashcycletime=+Cash-to-cashcycletime=DIO+DSODPO Cash-to-cashcycletime=53+3425=62Cash-to-cashcycletime=53+3425=62days

Therefore, the correct answer is C. 62 days.

Reference:

Coyle, J. J., Langley, C. J., Novack, R. A., & Gibson, B. (2016). Supply Chain Management: A Logistics Perspective. Cengage Learning.

Jacobs, F. R., & Chase, R. B. (2020). Operations and Supply Chain Management. McGraw-Hill Education.

asked 16/09/2024
Jeff Sonola
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