Question

Reduced order cycle time has become an important part of supply chain management since it can lead to lower inventory levels for customers, improved cash flow, lower current assets and accounts receivable. True/False

Answer 1

Answer:

True

Explanation:

Order cycle time is the period between the two orders, i.e., previous order and next order. If there is an ample amount of demand for a product, the order cycle time of that particular product will be low. As customer wants the product very often, the inventory will become nil, and there will be a positive cash flow. As the inventory level decreases, the current assets will be lower. As customers pay quickly, the receivables will also remain lower.