A chief financial officer is concerned about a company's supply chain performance. The key performance indicator (KPI) most likely to be reviewed is the:
its AA. cash-to-cash cycle time
The cash-to-cash cycle time measures the time taken between outlaying cash for raw material and receiving cash from product sales. It reflects how efficiently a company manages its working capital within the supply chain, making it a critical KPI for financial performance assessment.
The key performance indicator (KPI) that a chief financial officer (CFO) is most likely to review when concerned about a company's supply chain performance is the cash-to-cash cycle time. The cash-to-cash cycle time measures the amount of time it takes for a company to convert its investments in inventory and other assets into cash flow from sales. This metric is critical for CFOs because it impacts the company's cash flow and working capital, which are important indicators of financial health. A longer cash-to-cash cycle time can indicate inefficient supply chain operations, which can negatively impact the company's profitability and liquidity. Options B (supply chain cost), C (cost of goods sold), and D (order fulfillment cycle time) are also important metrics in supply chain management, but they may not be as directly tied to financial performance as the cash-to-cash cycle time.
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