How might you justify this practice and respond

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Question - Assume you are the CFO of a factory that supplies product to a large well-known retail chain. It is your company's policy, and the general policy of your industry, to offer product to this retail chain on 30-day credit terms. However, it turns out that this large well-known retail chain consistently extends their payments out to 60 days. When pressed, the retail chain responds to all the suppliers that they can choose to either accept the payments as they currently are or lose the business entirely.

Is this ethical? Should it matter whether this practice is ethical or not? In answering these questions, consider the impact on a small supplier versus a large supplier.

If you were the CFO of this large well-known retail chain, how might you justify this practice and respond based on what you know about operating and cash cycles?

Reference no: EM133050136

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