The Ministry has advised that payment will be made the month following delivery as the procurement officers' at the schools have to thoroughly inspect the desk. Ricky has sourced a supplier who will supply the materials required to produce the desks at a price of K15 per kg of material. He is hopeful that the Ministry will ask for more desks in the near future' As he is a new customer the supplier is unwilling to give him longer credit and he will be required to pay for the materials when they are delivered which is the same month production takes place. His buying pattern is to buy as much materials as is needed for production in that month. He will not keep inventory of materials at 30% of the following month's production requirement, although in June 2020, he intends to keep it at 20% of that month's production requirement. This is to allow for production of any desks that might be damaged during transportation. On average he uses 10 kg of material to make a desk, and this is unlikely to change over the period. Ricky will need machinery to allow him to make the desk. He has seen a new machine at a recent trade show at a cost of K80,000 that he had opted to buy. He will need to pay for this machine when it is delivered in January 2020. The business plan shows that the monthly overheads of the new business will be K20,000 payable in the same month they are incurred. In additional, delivery costs have been estimated at 9% of revenue payable in the same month revenue is earned.