A greater percentage of raw material purchases

Assignment Help Operation Management

Reference no: EM1381636

CHANGE IN OPERATING CYCLE: Indicate the effect that the following will have on the operating cycle. Use the letter "I" for increase, "D" for decrease and "N" for no change. A). average receivable goes up,B). Credit repayment times for customer are increase,C).Inventory turnover goes from 3 times to 6 times, D).Payable turnover goes from 6 times to 11times, E). Receivable turnover goes from 7 times to 9 times. F). Payment to suppliers are accelerated.

CHANGES IN CYCLE: Indicate the impact of the following on the cash and operation cycle, "I" Increase, "D" Decrease, "N" no change. A). The terms of cash discount offered to customers are made less favorable, B). The cash discount offered by suppliers are decreased; thus, payments are made earlier, C). An increase number of customers begin to pay in cash instead of with credit. D). Fewer raw material than usual are purchased. E). A greater percentage of raw material purchases are paid with credit. F). More finished goods are produced for inventory instead of for order.

Reference no: EM1381636

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