Rasa Pty Ltd intends to import dulamak from West Sumatra in Indonesia, which it will sell to furnishing retailers. Dulamak are ornately embroidered cloth squares that have been traditionally used by the Minangkabau people to cover ritual gifts in ceremonies like weddings. Rasa's founder, Jed, believes these will be popular in Australia for home decorations.

Rasa Pty Ltd has entered into a contract with a supplier of hand-embroidered dulamak made with high quality materials. The supplier contract specifies a price of $50 per dulamak for orders of 500 or more units. The price will remain fixed for one year and a 30-day credit period has been negotiated. Orders will be made at the beginning of each month to allow enough delivery lead time to ensure Jed has inventory on hand at the end of each month to cover the next month's forecast sales. Freight inward including import taxes will amount to $15 per unit and be paid in the month following delivery.

Jed spent $2,000 in June to set up the company, buy samples, negotiate with the supplier and do some market testing. Based on this initial research, Jed has forecast sales and purchases in units for the first 6 months of full operation, with a launch in the first week of August. His forecasts are shown in the table below. He expects sales to spike in the three weeks leading up to Christmas. After that sales will level out back at the November level for the foreseeable future.

Month Sales (units) Purchases (units) July 0 500 Aug 500 750 Sep 750 1,000 Oct 1,000 1,200 Nov 1,200 1,500 Dec 1,500 1,200 Jan 1,200 1,200