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Question 231 - CSCP discussion

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A company is aggressively pursuing improvements in the financial performance of its supply chain. The company should first focus its efforts on which of the following metrics?

A.
Process takt time
Answers
A.
Process takt time
B.
Cycle count accuracy
Answers
B.
Cycle count accuracy
C.
Number of inventory turns
Answers
C.
Number of inventory turns
D.
Number of first-tier suppliers
Answers
D.
Number of first-tier suppliers
Suggested answer: C

Explanation:

The number of inventory turns is a key metric that measures how often a company's inventory is sold and replaced over a period. It is a critical indicator of inventory management efficiency and directly impacts financial performance by influencing cash flow, carrying costs, and storage needs. By focusing on improving inventory turns, a company can reduce excess inventory, lower carrying costs, and free up capital for other uses. This can lead to improved profitability and better financial performance across the supply chain.

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

Chopra, S., & Meindl, P. (2016). Supply Chain Management: Strategy, Planning, and Operation. Pearson.

asked 16/09/2024
Borja Arranz Palenzuela
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