As business buys in bulk and stores excess product in their 3PL...

As business buys in bulk and stores excess product in their 3PL (3rd Party logistic's) facilities perhaps. Product manufacturing costs will drop as quantities increase to improve margin's as customer's orders become more regular. But in order to achieve such high margins, it's necessary to increase expenditure for larger orders from the manufacturing ... Chicken or the Egg scenario? Reminds Barney of the vending machine business his parents had... sell the product in the machine before one pays the 30 day credit facility with the product manufacturer.


1. Cash flows from operating activities    QTR Previous 12mth
1.1 Receipts from customers 6,844    22,433
1.2 Payments for (a) research and development    (403)    (2,158)
(b) product manufacturing and operating costs (7,357)   (23,984)
(c) advertising and marketing    (95)   (389)
(d) leased assets (74)   (271)
(e) staff costs (1,097)    (5,431)
(f) administration and corporate costs (468)    (2,811)
1.3 Dividends received (see note 3) - -
1.4 Interest received 1 12
1.5 Interest and other costs of finance paid (255)   (513)
1.6 Income taxes paid - -
1.7 Government grants and tax incentives   -   212
1.8 Other (GST received)    13 114
1.9 Net cash from / (used in) operating activities (2,891) (12,786)