Final Answer:
Competitive advantage goes to the firm that achieves the largest economic value created lowest producer surplus highest payable turnover highest cost of goods sold/revenue ratio is below the average cost.
Step-by-step explanation:
In the realm of business strategy, achieving the highest payable turnover is a critical factor for securing a competitive advantage. Payable turnover is calculated by dividing the cost of goods sold (COGS) by the average accounts payable. The formula is expressed as follows:
\[ \text{Payable Turnover} = \frac{\text{Cost of Goods Sold (COGS)}}{\text{Average Accounts Payable}} \]
The payable turnover ratio measures how efficiently a company manages its accounts payable in relation to its cost of goods sold. A higher payable turnover implies that the firm is paying its suppliers more frequently, which can lead to favorable credit terms and discounts. This, in turn, contributes to increased liquidity and cash flow, providing the company with a strategic advantage over competitors.
Moreover, a higher payable turnover often indicates a streamlined and efficient supply chain. By minimizing the time it takes to pay suppliers, a firm can negotiate better terms and reduce overall costs. This not only enhances the company's financial health but also positions it as a more attractive partner in the eyes of suppliers, reinforcing its competitive position in the market. In conclusion, the firm that achieves the highest payable turnover is poised to enjoy a competitive advantage by optimizing its financial efficiency and strengthening its relationships within the supply chain.