APICS CSCP Exam With Confidence Using Practice Dumps

Positioning safety stock at distribution centers (DCs) closest to customers supports responsiveness by reducing lead times and ensuring that products are readily available to meet customer demands. This strategy allows the company to quickly respond to fluctuations in demand and maintain high service levels. It aligns with the goal of competitive advantage through customer responsiveness by minimizing the time it takes to get products from the warehouse to the customer, thus enhancing customer satisfaction.

Cash-to-cash conversion time is a key performance metric that measures the efficiency of a company's cash flow cycle:

Material Acquisition to Sales: It starts from the time cash is spent to acquire raw materials and ends when the company receives payment for the finished goods.

Inventory Management: Efficient inventory management reduces the time materials sit as inventory, speeding up the conversion cycle.

Production Efficiency: Streamlining production processes shortens the time products are manufactured and ready for sale.

Receivables Management: Effective receivables management ensures quick collection of payments, reducing the overall cash-to-cash cycle time.

To determine the days of product inventory on hand, use the formula: Days of Inventory=Average InventoryDaily UsageDays of Inventory=Daily UsageAverage Inventory​

Given:

Average quantity on hand = 10 units

Annual sales = 60 units

Selling days in a year = 360 days

First, calculate the daily usage: Daily Usage=60 units360 days=0.1667 units/dayDaily Usage=360 days60 units​=0.1667 units/day

Then, calculate the days of inventory: Days of Inventory=10 units0.1667 units/day≈60 daysDays of Inventory=0.1667 units/day10 units​≈60 days

However, considering production days (261 days) is not relevant as the selling days (360 days) have already been used in the calculation.

Hence, the correct days of inventory based on daily usage calculation is approximately 60 days. To be more precise, using the given options: Days of Inventory=10 units(60 units/360 days)=60 daysDays of Inventory=(60 units/360 days)10 units​=60 days