Bad-Debt Loan Ratio

Certified Inventory Optimization Professional (CIOP) is an end-to-end supply chain certification program. The certification consists of 30 modules focusing both on traditional and futuristic topics. The traditional topics are introduction to supply chain management, all about inventory, strategic business planning, forecasting, demand management, capacity management, sales and operations planning (S&OP), master scheduling (MPS), materials requirements planning (MRP) and production activity control (PAC). It also includes topics on procurement, warehousing, transportation, distribution, and packaging. The topic on the future trends such as Blockchain, Internet of Things (IoT), Robotic Process Automation (RPA), Machine Learning (M/L) and Artificial Intelligence (AI). There is a significant focus on supporting technologies such as forecasting and process mapping tools such as Microsoft Visio. In addition to the above indicated topics the participants need to master over 3000 terminologies in supply chain management.

Proper management of the lead time, the bad-debt loan ratio and overall production is vital in any warehouse operation. For example, the production must be maintained at a good level to keep the cost of goods sold at the same or better rate than the cost of raw materials used to create the product. 

Without an optimized production of the goods to fill orders, it will become difficult to stay ahead of the competition, which will result in the loss of sales. The aim of every business owner is to make the most of his customers and stay on top of the production curve.

The inventory cycle begins with the acquisition of raw materials, followed by the development of the goods to manufacturing stages where the production process starts with the creation of goods to be sold. When the products reach the customer, they are packaged according to the specifications provided by the customer and shipped to the delivery locations. The length of time between the time of purchase and the time of shipment must be enough to allow for adequate production. Most warehouse owners recommend that warehouses maintain a two-week supply chain cycle as opposed to a six-week Supply Chain Cycle.

If the inventory parent item is sold before the customer's order is paid for, the amount owed is considered as an open debt. Once the order is paid for, the outstanding amount on the credit account is repaid and the open debt is closed. It is important to ensure that the order is delivered into the customer's door and the item is available for pick-up. Open balances in the warehouse must be managed. If a company does not manage its inventory and its open balances well, then they will find it extremely difficult to meet delivery dates of inventory items.

Related Articles

Analysis of the Profits of Banks and Supply Chain
Bank loans again under bad debt threat
Slow Receivables Turnover and Bad Debt Loss Financing Solutions
What Is a Debt Ratio?
Current Ratio