Q.Explain the following term/concept:
Production Cycle

The production cycle is the time period between the purchase of raw materials and the completion of finished goods ready for sale; it is a key factor influencing the amount of working capital required.

The production cycle (also called the manufacturing cycle) refers to the total time a business takes to turn raw materials into finished, saleable goods.

• During this period money remains blocked in raw materials, work-in-progress and finished goods before any sale realises cash.
• A longer production cycle keeps funds tied up for more time, so the firm needs a larger amount of working capital. …