APICS Certified Supply Chain Professional (CSCP) — Question 36

A company's cash-to-cash cycle time is 36 days. How many weeks of inventory are on hand if the average collection time from customers is 60 days, and the company pays its vendors in 45 days?

Answer options

• A. Two
• B. Three
• C. Four
• D. Five

Correct answer: C

Explanation

The cash-to-cash cycle time of 36 days indicates the time taken to convert inventory into cash. By calculating the inventory period as part of the cycle (36 days - 60 days + 45 days), it results in an inventory holding time of 36 days, which converts to approximately four weeks. The other options do not align with this calculation.