This lesson examines the role of supply chain and inventory management in the working capital cycle. The ACT syllabus requires the ability to recommend appropriate tools to manage the supply chain and inventory to optimise the working capital cycle .

4.1 Inventory Management Fundamentals

Inventory represents goods held for sale. Effective inventory management can reduce holding costs and free up cash. The ACT syllabus covers inventory management techniques such as Just-in-Time (JIT) and consignment stock, as well as the fluctuating value of commodities and supply chain logistics including floor planning .

4.2 Optimising the Supply Chain

Effective supply chain management can significantly impact working capital. The syllabus covers strategies to optimise the supply chain, including using floor planning to manage inventory levels and considering the value of inventory, particularly in the context of fluctuating commodity prices .

4.3 Integration with Treasury

The syllabus addresses the integration of supply chain management with treasury functions, including the use of information technology, ERP solutions, and emerging technologies .