APICS Certified Supply Chain Professional (CSCP) — Question 406

Which of the following descriptions represents cash-to-cash conversion?

Answer options

• A. The conversion time from material acquisition to sales revenue
• B. The conversion time from sales order to receipt of payment
• C. The currency conversion rate when buying and selling goods
• D. The measure of an organization’s effective use of inventory

Correct answer: A

Explanation

The correct answer is A because cash-to-cash conversion refers to the time taken to convert investments in inventory and resources into cash flow from sales. Options B, C, and D do not accurately capture the essence of cash-to-cash conversion, as they focus on different aspects of financial transactions and inventory management.