=The company is keen to have a month’s worth of advance purchases and, accordingly, plans to buy two months’ worth of supplies in January. Requirements in a normal month amount to

€4m.

The supplier grants the company a 90-day payment period. Other costs are:

personnel costs of €4m per month;

shipping, packaging and other costs amounting to €2m per month and paid at 30 days. These costs are incurred from 1 January.