APICS Certified Supply Chain Professional (CSCP) — Question 178

All other variables being equal, which of the following changes would have a beneficial effect on cash-to-cash cycle time?

Answer options

• A. A decrease in the value of cost of goods sold (COGS)
• B. An increase in the value of inventory in the supply chain
• C. An increase in the value of accounts receivable
• D. An increase in the value of accounts payable

Correct answer: D

Explanation

Increasing the value of accounts payable allows a company to retain cash longer, thus improving the cash-to-cash cycle time. In contrast, a decrease in COGS, an increase in inventory, or an increase in accounts receivable would not effectively enhance the cycle time, as they either tie up cash or delay cash inflows.