Question
Material X is regularly used by John for production and usually costs RM5 per liter. However, John's current supplier's earliest delivery time for Material X
Material X is regularly used by John for production and usually costs RM5 per liter. However, John's
current supplier's earliest delivery time for Material X is in three weeks' time. An alternative supplier
could deliver it immediately but will be charging additional transportation fee of RM150. John
already has 400 liters in inventory but 200 is already committed for the production of other jobs. A
production contract was received by John for delivery in two weeks' time and will require 300 liters
of material X. Late penalty for the delivery for this job will result in a penalty of RM200 per week and
John is expecting delivery can be made in four weeks' time. Calculate the relevant costs (to the
nearest RM) of material X for the job.
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