A presentation by:

• KYLE MARIE P. GALVE • JEA ELAICA MIE L. RESOL • ROBERT

A. HEALEY • GENELOVE B. GABAO • LEIGH ANN PEREZ •
 Statement of the Problem
San Miguel Corporation maintains a
practice of giving one sack of rice for each
employee every month and it was founded that
the cost of enforcing this policy includes not only
the cost of rice itself but included are the staff in
charge of procurement, warehouses for storage
and transportation and handling costs. An
alternative of abandoning the policy instead and
add the cash equivalent to the employee’s
monthly pay check will enable the company to
save P150 per employees that would total to
P3,000,000 annually.
 Objectives
General Objective:

The primary goal of the case

study is to decide whether to resume
the policy or not considering that it
would still give benefits to employees
while minimizing the cost incurred by
the company.
 Objectives
Specific objectives:
Specifically, this study would like to:

a. Determine the advantages and

disadvantages of continuing the policy

b. Determine the advantages and

disadvantages of abandoning the policy

c. To minimize overhead expenses in lieu to

the one sack of rice policy by up to 1%
 Areas of Consideration
a. Inflation/ Deflation

Inflation gets the price of a commodity in

the market higher and that would create more
expenses to the company. On the other hand,
deflation causes lower market prices but at the
same time increasing purchasing power of an
individual and would create shortages unto the
rice stocks because of its greater demand in the
market. The higher the price of the rice, the more
it is taxable. Thus, the more it would cost.
 Areas of Consideration
b. Supply and demand chain in the market

A challenge would arise if there are

greater demands of rice in the market with a
lower number in supply.

c. Opportunity cost

Giving up the 3,000,000 profit that the

company might have in exchange for investing
into a policy.
Alternative Courses of action
1. The obvious course of action would be
to abandon this “one sack a month
policy” and instead pay the employees
the equivalent cash for the sack of rice. If
they abandoned the policy they could
save up to 3,000,000 pesos per year
because there would be no need for
warehousing, staff, transportation and
handling costs.
Alternative Courses of action
2. Instead of giving their employees a
sack of rice each month they could give
their employees additional benefits such
as, paid time off or better medical
benefits, they could also give employees
additional vacation time and annual
vacations that will be paid for by the
company.
Alternative Courses of action
3. If the company doesn’t want to abolish
the policy, they could try to adopt a
better a better inventory system to greatly
reduce the costs of handling and
warehousing. Adopting a better and
more efficient inventory system could help
them to reduce lost inventory and limit the
amount of storage space required.
Alternative Courses of action
4. Banning the one sack of rice policy.
Evaluation of each alternative
Alternatives Advantages Disadvantages
Cost for fringe benefits will be Converting rice incentives into
Cash incentives as an alternative
incurred by the company will be cash would require more process
for rice
decreased and extra cost.

Annual fringe benefits instead of It could give more satisfaction to Additional expenses will be
rice the employees of the corporation incurred when

Minimal cost would be incurred by

Maintain the policy but adopt a Additional costing in connection
the company after the
better inventory system with shifting into a new system
implementation

It is not a responsibility of the

company to provide monthly
incentives to their employees as Less job satisfaction for the
Banning the policy
part of their social concern. employees
Banning the policy would give the
company a higher profit.
 Conclusion
In the view of findings, the following
conclusions were drawn: both parties can benefit if
the policy will be discarded to implement a new way
of giving incentives to the employees, for example,
giving medical benefits, vacation time paid by the
company, or simply an increase in their salary.
Through this new implementation, the employees will
be more motivated to do their job and the company
could lessen the cost of giving incentives to the
employees. Aside from the fact that the company
can save a large amount of money, they can also
make their employees happy and contented. After
all, a company’s greatest asset is their employees.
 Recommendations
 The company should conduct a survey to the
employees to find out what are the things that
motivates them to give a better performance in
their work and the kinds of necessary benefits that
they want to receive.
 In developing a new policy, the company should
make sure that both parties, the employer and the
employee, can benefit equally.
 The company can also develop an award system
where the best employees can receive an award
that they deserve like, employee of the year
award, recognizing their hard work and
performance.