longer its customers normally hold inventory, the longer the credit period supplier firms normally offer Still, suppliers have some flexibility in the credit terms they offer If a supplier lengthens the credit period offered, this will shorten the customer's cash conversion cycle but lengthen the supplier firm's own CCC.

Question

Quizplus · Accepted Answer

This statement is true. Suppliers can adjust their credit terms to affect the cash conversion cycle of their customers, but it will also impact their own CCC. A longer credit period offered to customers will reduce their CCC but increase the supplier's CCC.

Longer Its Customers Normally Hold Inventory, the Longer the Credit