Optimizing Cash Management Strategies

ABC Corporation is reviewing its cash management policies to optimize its working capital. The finance team has identified a key metric for evaluating cash management effectiveness: the cash conversion cycle (CCC). The CCC measures how long it takes for a company to convert its investments in inventory and receivables back into cash. A shorter CCC indicates better efficiency in managing cash flow.

ABC Corporation is considering implementing one of three strategies to improve its cash management. The strategies differ in their approach to cash levels and liquidity management. Based on this information, which strategy would be the most effective in reducing the cash conversion cycle?