APICS Certified Supply Chain Professional (CSCP) — Question 392

On which of the following metrics should a firm focus improvement efforts when the firm wishes to improve its liquidity position?

Answer options

• A. Inventory days of supply
• B. Inventory record accuracy
• C. Cash-to-cash cycle time
• D. Balance sheet assets

Correct answer: C

Explanation

The correct answer is C, as the cash-to-cash cycle time directly measures how quickly a company can convert its investments in inventory and other resources into cash flows from sales, thus impacting liquidity. Options A and B, while important for inventory management, do not directly relate to liquidity. Option D involves a broader financial perspective that does not specifically address liquidity improvement.