Essay on Operations Managment
Case #4 Page 847
#1,2,3 & 5
Draw a diagram of OSP’s cash flow cycle. Explain the cash flow difficulties described by Josh Frey and Dave Burnett (refer to the Case-in-Case). Why did Frey’s strategy of more sales fail to improve OSP’s cash flow?
The cash difficulties described between Josh Frey and Dave Burnett stated that if you have accounts payable due $3,000,000 and your accounts receivable is $5,000,000 but not for 30 days you have some big problems. Frey’s strategy failed for more sales to try to improve OSP’s cash flow is because of the reason stated previously. If you keep selling, which is a good thing but you do not request a percentage down from your customer you will be in the …show more content…
Frey never feels satisfied with his business firstly because that is how Entrepreneur’s work. They will always have the drawbacks in the back of their mind as there is that chance of uncertainty of income , risk of losing their entire invested capital, especially if this was a family business carried down, they will always work long hours and work especially hard, have high levels of stress and they are and will always have complete responsibility of that business unless they decide to shut down or sell out. I do personally believe that this is a