Case
Study
Submitted by:
Bea Therese Celo
Abdul Rafi Maranda
Jay Emmanuel Deseo
Jed Christian Diaz
Federico Seneres III
Submitted To:
Prof. Gilda Monsole
April 2019
I. Statement of the Problem
How can the corporation lessen its cost and expenses while embodying social concern,
and achieving social responsibility to their employees by sufficing their needs?
II. Objectives
1. To think of different ways on how the corporation can lessen its cost and expenses, while
showing social concern to their employees
2. To find alternative courses of action that would benefit both the corporation and its
employees
III. Areas of Considerations:
1. Payment to Staff in charge of procurement
2. Additional costs in warehouses for storage
3. Transportation Costs
4. Concessionary price due to bulk purchase
5. Increase in prices of rice if there’s a rice shortage
6. Can Save P150 per employee or P3,000,000 annually if they abandon the policy and
instead add the cash equivalent of first class rice to the employee’s monthly paycheck.
Additional insights:
7. Taxes
8. Inflation rate
9. Spoilage of rice in storing
10. Theft in storage of rice
11. Relationship with supplier if ever there’s a contract agreed between SMC and the
supplier of rice
12. Feedback of employees who are dependent on the policy
13. Employment
Loss of some skilled workers if ever the policy will be abandoned, which could affect
production process and quality of products produced
Hiring of new employees in case of loss employees
IV. Alternative Courses of Action
1. The company can also give rice to its employees during the period of rice surplus.
However, if the supply of rice is in shortage, the company will distribute its own product
like Magnolia or Purefoods frozen foods- hotdog, chicken, and dairy goods worth P2650
only since the products will be coming from the company will only be given at cost.
Considering the climate change, we can’t predict the probability of surplus nor shortage
and so we assume that in a year, there will be 6 months of surplus and 6 months of
shortage.
2. The distribution of rice should be done directly from the supplier to the company’s
employee so that the usage of warehouse will be no longer need.
3. The company will give cash equivalent to the cost of rice. This will also reduce cost by
not using warehouse, transportation and handling costs.
4. The company will give Magnolia or Purefoods products worth P2650 every month for
every employee instead of giving one sack of rice or giving cash
V. Computations of each alternatives
Alternativ Cost of one-sack-a month Cost of applying Amount saved when
e policy annually Alternative using alternative
1 (2,700)(20,000) (2700)(20,000) 651,000,000
= 54,000,000(12) =54,000,000(6) - 643,500,000
=648,000,000 =324,000,000 7,500,000
+3,000,000 +1,500,000
=651,000,000 =325,500,000
(2650)(20,000)
=53,000,000(6)
=318,000,000
325,500,000
+318,000,000
=643,500,000
2 (2,700)(20,000) (2,700)(20,000) 651,000,000
= 54,000,000(12) =54,000,000(12) - 648,000,000
=648,000,000 =648,000,000 3,000,000
+3,000,000
=651,000,000
3 (2,700)(20,000) (2,700)(20,000) 651,000,000
= 54,000,000(12) =54,000,000(12) - 648,000,000
=648,000,000 =648,000,000 3,000,000
+3,000,000
=651,000,000
4 (2,700)(20,000) (2650)(20,000) 651,000,000
= 54,000,000(12) =53,000,000(12) -636,000,000
=648,000,000 =636,000,000 15,000,000
+3,000,000
=651,000,000
VI. Conclusions
Being one of the largest company in the Philippines, the San Miguel Corporation is
composed of thousands of workers that enables them to perform their daily operations as a
company. The problem regarding the distribution of rice to thousands of employees seems to be
a big part of the expenses that affects the performance of the corporation. The procurement,
storage, distribution, additional workers employed in the warehouse, losses due to theft and other
circumstances gives us a clear picture on what kind of a problem the company is currently
facing. Due to the problems stated above, we have formulated different types of solutions that
could help the company. The best solution of which is the distribution of Magnolia and
Purefoods product worth P2,650 every month for every employee instead of giving one sack of
rice or giving cash. This would help the company save P15,000,000 that the company could use
for other purposes that would improve their performance as an economic entity.
VII. Recommendations
Based on the computation, we recommend that the San Miguel Corporation should give their
employees Magnolia and Purefoods product worth P2,650 at cost a month. The reason for this is
the following:
1. The employees would enjoy a big savings due to the price difference of products from the
factory compared to the retail store which includes a certain amount of profit for each
product. This means that the volume of the products that they would receive would cost
more than P2,650 if procured outside the factory (Retail Stores).
2. This would be an advantage for the company for the reason of disposing products its own
products especially when sales decreases or at it low point. They could avoid spoilage of
goods and decrease the possibility of losses due to theft from goods stored in the
warehouse.
Due to these possible advantages in favor of the company we highly recommend that they
would practice the said alternative. This could help the company to improve their performance to
attract investors, decrease their expenses and most importantly maintain the good relationship
between the company and its employees. Solving the problem without compromising the culture
of the company, this alternative would be the best for the entity.
