Question
Ben's Bulk Barns is a wholesale wholefoods merchant and is investigating several mechanisms to reduce its cash conversion cycle. The first is a new inventory
Ben's Bulk Barns is a wholesale wholefoods merchant and is investigating several mechanisms to reduce its cash conversion cycle. The first is a new inventory control and ordering system which will reduce average age of inventory from 85 days down to 62 days. The second policy change it is considering is introducing a discount for its credit customers who pay their account in full earlier. This is likely to reduce the average collection period from 52 days down to 26 days. If both changes are implemented, what will Ben's Bulk Barns cash conversion cycle be if its average payment period remains at 25.6 days?
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