Page 209 - DMGT553_RETAIL_STORE_MANAGEMENT

Retail Store Management

Notes Most of the concerns do not find this method favourable because of its inherent potential
disadvantages. Many sophisticated firms do not sell used surplus to their employees. Especially
scarp tools and equipment should not be sold to the employees, since such a concession might
encourage scrapping of serviceable tools and equipment, besides the dissatisfaction is commonly
witnessed among the employees emanating such sales. Further, it often entails a high cost of
paper work and imposes an administrative burden on ensuring complete impartiality in the
sale.

Donation of Educational Institutions: At present time, schools and colleges and even university
departments actually need machine tools and other type of industrial materials for instructional
use in laboratories. The disposal of surplus in this direction is rare phenomenon in the industrial
realm. Though this alternative does not yield anything for the surplus or scrap items, it earns a
favourable with its social responsibility. This sense, the sum that a concern has to forgo in
respect of any such surplus item gifted to the educational institutions, can be very well treated
s the premium to avail of higher community confidence.

On the whole, the management of surplus and scrap has its unique features particularly for the
manufacturing units which require high usage of consumable items. Processing materials are so
frequently likely to be confronted (affected) with the grave problem — how to yield best of the
surplus items? The industries suffer swiping and swift generation of its plants and equipments,
machinery and tools on account of rapidly developing technologies from time to time are also
the victim of high stock of surplus and even scrap heaps. So much with this, scrap industry is
characterized by a market of its uniqueness. In the true sense, scrap is usually, intended to be
bought rather than sold. The practical bias to the management of surplus and scrap accumulation
reveals that no market or regular demand can be crated for such surplus stocks as it is a common
phenomenon with regular trade commodities. No means of advertising howsoever effective in
its application can do well in this typical industry. The reason underlying rests as the demand is
a delivered demand completely dependent on the sale of firm’s products and conversely for the
raw materials. As a result, when the requisition knocks at the door the items must be ready on
hand to be delivered. Once missed the opportunity, it is incumbent upon the manufacturing unit
to maintain the large inventories till another indent is received for the items from the user
dealer.

Self Assessment

State whether the following statements are true or false:
13. Scrap materials are those that are still usable in their present form, but that still have
value.
14. Surplus materials are those that, while still in good condition and usable, have no
foreseeable use within specified operations during the next 12 months.
15. Scraps are recyclable and other materials left over from product consumption.

Lab Exercise Go to website http://www2.le.ac.uk/departments/criminology/people/
bna/10WaystoKeepShrinkageLowpdf and know how to keep Shrinkage Low.

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