Page 426 - Manual-of-Operation-Merged

CvSU MANUAL OF OPERATIONS
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Most manufacturing projects of SUCs are ‘job order’ types, thus,
eliminating the risk of excess finished goods. This, however, runs
counter to the idea of maximizing potential. Institutionalizing the “job

order” system encourages IGP personnel to be complacent.

The manual is thus recommending that IGP Manager should
take effort to determine market demand and incorporate the data into
the sales plan and production budget they prepare.

The IGP Manager, in consultation with the Business Council
and the Accountant, shall formulate policies regarding the disposal of
unsaleable or stale merchandise. Price markdowns and bulk sales for
food items may be resorted to where practicable except when the
merchandise is no longer fit for consumption.

As regards obsolete or unserviceable items, disposal thereof
shall follow existing guidelines on unserviceable items. Setting of bid
price, however, shall consider the scrap value of the equipment as
reflected in the financial statements of the IGP.

Once the production volume is determined and is tested, a
reorder point should be established to determine the level at which
inventories are allowed to fall before the IGP Manager orders or
produces more.

The order point (IRP) considers the following factors:

1. Safety Stock (SS) – buffer inventory in case order is delayed
or usage is higher than normal.
2. Lead Time (LT) – the time interval between placing and
receiving order.
3. Estimated daily use (EDU)
The order point is computed using the formula:
IRP = SS (EDU x LT)

Article 7. Profit Sharing / Incentives for Project Personnel

• Handling projects and performing support functions to these
projects are additional burden and responsibilities to SUC
employees concerned if they come and work for other units in
the University too, which usually entail extraordinary work.
• Thus, to motivate the faculty and staff to actively participate in
IGP activities, they may be given monetary remuneration
and/or incentives on the basis of their contribution to the
productivity and profitability of the projects. The management

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