A company would like to benchmark its inventory levels against other companies.
Which of the following metrics is best to use for this purpose?
- Fill rate
- Days of supply
- Net asset turns
- Cash-to-cash cycle time
Answer(s): D
Explanation:
CCC has days inventory outstanding, days sales and payables outstanding values in its formulae. A breakup of all this if available can be a good metric as it can talk of various parameters connected to the inventory position, negotiating power with the supplier/ distributors etc.
Reference:
https://www.google.com/url?sa=t&rct=j&q=&esrc=s&source=web&cd=&cad=rja&uact=8&ved=2ahUKEwj_98PXlP7xAhW98uAKHYMkCB0QFjAAegQIBxAD&url=https%3A%2F%2Fwww.researchgate.net%2Fprofile%2FMohamed_Mourad_Lafifi%2Fpost%2FWhere_can_I_find_SCOR_metrics_any_level_to_use_in_a_supply_chain_evaluation%2Fattachment%2F5f91ad2c7600090001f0280e%2FAS%253A949469478666249%25401603382572650%2Fdownload%2FSupply-Chain%2BBenchmarking%2Bwith%2BSCOR.pdf&usg=AOvVaw33LXq2CKgYsqM6Hie7pR1P