“In my opinion, we ought to stop making our own drums and accept that outside supplier’s offer”, said Ahmad, managing director of Mega Forwarding. “At a price of RM16 per drum, we would be paying RM5.40 less than it costs to manufacture the drum in our own plant. Since we use 60,000 drums a year, that would be an annual operating cost saving of RM324,000”.
The following is cost to manufacture one drum (based on 60,000 drum per year).