An Accelerated Flow of Funds Through the Supply Chain Can

question 17

Multiple Choice

An accelerated flow of funds through the supply chain can improve a firm's profitability by:

• A) Increasing interest rates
• B) Customers cannot be invoiced more quickly
• C) Creating a positive cash flow provides financial opportunity
• D) Increasing working capital needs
• E) None of the above

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Definitions:

Demand Volatility

The degree to which demand for a product or service can fluctuate unpredictably over a certain period, affecting supply chain and inventory management strategies.

Safety Inventory

Inventory kept as a buffer against forecasted demand and supply variability to prevent stockouts.

Forecasted Demand

The estimated amount of product or service that will be bought by customers in a future period, often used for planning in business operations.

Postponement

A supply chain strategy that delays the final production or distribution of a product until customer orders are received to minimize inventory and forecast error costs.