APICS Certified Supply Chain Professional (CSCP) — Question 478

In the Supply Chain Operations Reference-model (SCORֲ®), the cash-to-cash cycle time for a manufacturing company is the number of days between which two of the following situations?

Answer options

• A. Paying for raw materials and getting paid for the product
• B. Shipping the product from the warehouse and receiving it at the customer's location
• C. Paying for raw materials and sending an invoice to the customer
• D. Billing the customer and getting paid for the product

Correct answer: A

Explanation

The correct answer is A, as the cash-to-cash cycle time measures the time taken from the outflow of cash when paying for raw materials until the inflow of cash when receiving payment for the product. Options B, C, and D do not accurately represent the full cycle of cash flow in manufacturing, as they focus on different aspects of the supply chain without encompassing the complete cash cycle.