Question
Consider a job shop currently dedicated to two customer orders in the coming year. Job 1 takes 5 days to process and job 2 takes
Consider a job shop currently dedicated to two customer orders in the coming year. Job 1 takes 5 days to process and job 2 takes 8 days. The company paid the materials for both jobs 1 day after the start of processing. The customer for job 1 pays the immediately upon the completion of the job, while customer for job 2 pays 1 day before the completion of the job. The cost and revenue for the jobs are listed below.
Job 1 | Job 2 | |
Processing time | 5 | 8 |
Time to pay | 1 | 1 |
Amount to pay | $3 | $7 |
Time to receive | 0 | -1 |
Amount to receive | $7 | $8 |
The cash to cash cycle for the job shop in the coming year is
Below 3 days
3.0 3.4 days
3.5 3.9 days
4.0 - 4.4 days
4.5 4.9 days
5 5.4 days
5.5 6 days
Above 6 days
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