Metal Designs,Inc.,historically produced products for inventory.Now,the firm only produces a product when it receives an actual order from a customer.All else equal,this change will:

Question

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By only producing products when they receive orders, Metal Designs, Inc. will decrease the amount of time it takes to convert inventory into cash, which will decrease the cash cycle. This is because the firm will no longer tie up cash in inventory that may not sell for a long time. The operating cycle, accounts receivable period, and inventory turnover rate may be affected by this change, but the information provided does not give a clear indication of how they will be affected. However, the accounts payable period is unlikely to be affected by this change. Therefore, option D is the best choice.