CHAPTER ONE

1.0 INTRODUCTION

This chapter covers the background information of the case study, the statement of

problem, reasons for the research, the aims or objective of the study, the limitation of the

study, scope of the study and organizational chart. The chapter also contains the definition

of terms and the planning of the presentation.

1.1 BACKGROUND OF RESEARCH

Surplus can be defined as residues or leftover materials after the production or

manufacturing process. There is the need for organizations to pay due attention to the

management of surpluses, especially scraps because their occurrence in industries, be it a

service or manufacturing industry, is inevitable. The fact that many companies do not

realize that revenue can be generated from surpluses if they are managed properly is rather

unfortunate. Instead of putting measures in place to reduce the occurrence of surpluses and

to manage them properly so as to derive some monetary value, many companies rather

discard surpluses as waste.

It is generally perceived that surpluses are waste materials which are of no practical use.

Because of this, when surpluses in particular scraps, occur they are rather discarded or

given out to workers without any monetary rewards. As a result some workers cause

breakage and damage deliberately to items so that they can benefit

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1.2 STATEMENT OF THE PROBLEM

Many organizations often manage their surpluses poorly and inefficiently since they do not

attach any or much importance to them. This is as a result of lack of knowledge on how to

manage and dispose of surpluses when they occur.

Again, many organizations do not have qualified employees to draw up right and exact

specifications to meet the needs of the organization. There is therefore the need for the

organization to recruit qualified and professional purchasers who could also help reduce the

unnecessary occurrence of surpluses in the first place. In addition, many organizations do

not have salvage department where they can house surpluses and in particular scrap

materials arising from day to day activities. Such department will take advantage of

recycling or re-use of such materials more profitably.

At Metro Mass Transport- Takoradi, workers prefer a lot of surplus materials particularly,

scrapped materials because of the improper management of surplus materials. Also, the

collection and housing practices of surplus materials are inefficient. As a result, surpluses

arising from operations are not organized but, are left on the operation floors. These

materials are either discarded or pilfered by workers for personal use leading to financial

loss to the company.

This research work is therefore being undertaking to provide guidelines on how wastage

will be reduced and profitability from surpluses utilization.

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1.3 OBJECTIVES OF THE STUDY

 To study how surpluses and in particular, scraps are managed in the transport

industry.

 To analyse the collection and housing of surplus materials in the transport industry.

 To study the problems associated with managing surplus materials and in particular,

scraps in the industry.

 To investigate for the disposal of scraps and other surpluses in the transport industry.

 To recommend ways through which Metro Mass Transport- Takoradi can effectively

manage surplus materials.

1.4 SCOPE OF THE STUDY

An in-depth study of the management of surplus materials at department of scrap and

surplus management would call for a thorough examination and evaluation of surplus

materials management practices of various transport establishments. This would not be

possible as a result of constraints posed by time and financial resources.

Metro Mass Transport –Takoradi has therefore been singled out for special study because it

is one of the largest transport establishment in the country and generates more surpluses

especially scraps as compared to others. It is expected that recommendations made

regarding the management of surplus materials would be applied to other transport

companies in the country despite the drawback mentioned earlier.

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 1.5 LIMITATIONS OF THE STUDY

 There was insufficient time to undertake a detailed study of a sample of a transport

companies. The researcher had to share his time between normal class work and

this project work.

 Relevant information on surplus materials management in the transport industry

was hard to come by. General materials on the subject could be found in the

library but, none exist for transport activities.

 Because of the limited and insufficient financial resources more extensive study

and site visits could not be done. This however, this could have improved the

reliability of the present study.

1.6 SIGNIFICANT OF THE STUDY

This study is of special significance in several respects:

It will provide guidelines to transport companies for the efficient disposal of surplus

materials.

It will help the researcher to acquire more knowledge on the management of surplus

materials.

The study also aims to afford Metro Mass Transport-Takoradi, some knowledge on how to

generate revenue from efficient of surplus materials.

It will also help the industry to avoid storage cost.

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1.7 ORGANISATION OF THE STUDY

This report is divided in to five chapters. The first chapter deals with the introduction to the

study, statement of problem, objectives of the study, limitations of the study, significant of

study, organisation of the study and history of the study. The second chapter contains the

literature review. The third chapter talks about the organization, which is the subject of the

research. The fourth chapter discusses the research methodology adopted for the study and

observations and findings. The fifth, which is the last chapter, has to do with the

recommendations and conclusions of the study.

1.8 HISTORY OF METRO

Evidence of plans to build the metropolitansexisted as early as 1845, though the first line

was not completed until July 19, 1900. Following the construction of the Eiffel Tower by

eleven years, this elegant transportation system stole the show, and remains to this day a

model of efficient public transportation.

MISSION AND VISION OF METRO MASS TRANSPORT

In 2005 a new management team in MMT defined the following mission and vision: The mission of

MMT is:

To provide an efficient urban mass transport system in Ghana through the use of buses

The company’s Vision is:

To build a dominant, reliable, efficient, safe and affordable yet an economically sustainable mass

transit public bus company in Ghana. MMT also aims to introduce the Bus Rapid Transit System

into Ghana.

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 1.9 ORGANIZATION STRUCTURE OF METRO MASS TRANSPORT

CEO

Head of Testing Licensing Training & Head of

Manager Standards Corporate
Manager Services

Regional Registrar of Licensing Training Functional

Manager Driving officer officers managers
Instructors

Assistance
Regional Managers

Senior Testers Including Examiners

of Driving Instructors

Driving Testers Administration Licensing Administration

Entry Level Staff Staff Staff

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 CHAPTER TWO

LITERATURE REVIEW

2.1 INTRODUCTION

This chapter is a review of the relevant literature to the effective management of surplus

materials. The review will cover the following subheadings or key points:

 Definition of Surplus

 Primary Sources of Surplus

 Management of Surplus

 Purchasing and Surplus

 Investment Recovery or Salvage Department

 Disposal of Surplus

2.2 DEFINITION OF SURPLUS

According to Doubler and Burth (1996), industrial surpluses are defined as those materials,

which are in excess of a firm’s operational requirement.

Fearon (1993), defined surplus as a term used to describe material which is in excess of

reasonable requirement of the organization. It arises because of the errors in the amount

bought or because anticipated production did not materialize.

According to Jessop and Morrison (1994), scrap and residues are the waste, used or surplus

materials or parts arising out of the manufacturing process or other activities; for example,

steel and non-ferrous tunings, other scrap metal, rejected components, saw dust, used

engine oil, ashes and obsolete machinery.

Lysons and Gillingham(2003), states that surplus is an omnibus term covering materials or

equipment that are in excess of requirement, no longer useable in their original form, or

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are superseded most of such items can be categorized as “scrap” or obsolete .Scrap refers

to the waste from the production process which may have a salvage value. Obsolete means

that an item has gone out of use or has been superseded by equipment offering enhanced

advantages such as speed, productivity versatility or economy of operation. An obsolete

item may, however, still be usable and have value.

2.3 PRIMARY SOURCES OF SURPLUS

Doubler and Burth (1996), states that scrap or surplus typically originates from sources

like:

(a) Scrap and waste

(b) Obsolete and damaged stocks; and,

(c) Obsolete or damaged equipment.

2.3.1 SURPLUS FROM SCRAP AND WASTE

Some surpluses or waste from production process is inevitable. Not all production materials

are wholly consumed in most transport establishments. Most of the time, residues are left

which cannot be used elsewhere in the organization’s operations.

This excess called scrap must be disposed of as surplus. It is impossible to eliminate this

kind of surplus; however, with intelligent planning and effective production control, it

could be minimized. Surpluses also result from the inefficient use of production materials

or machinery as well as careless and poor purchasing. This type of surplus is termed as

waste. Effective management does everything possible to keep waste at a minimum.

Obviously, the least cost methods of controlling surplus of all types are to eliminate them at

the source and this is why cost reduction programmes that eliminate surpluses before they

occur are so profitable.

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In the view of fearon (1993), surpluses arising from waste are materials or supplies, which

have been changed during the production process and which through carelessness, faulty

production method, poor handling or other causes have been spoiled, broken or otherwise

rendered unfit for further use or reclamation. This definition is not entirely true.

There is a form of waste which is not as a result of obsolescence and yet not as a result of

carelessness or poor handling. Waste for example, may occur by the fact that the material is

not up to the specification, because of faulty machinery or breakdown or because of

unforeseen chemical action. In some instances, waste can be defined as the residue of

materials which result from the normal manufacturing process and which has no economic

value.

An example is the smoke produced by burning fuel. In theory, waste should never exist.

However, there may never be a time where waste will be eliminated from every production

activity. All efforts must be made to reduce waste to the lowest possible point. Its reduction

can be brought without in many ways such as installation of new processes and improved

production layout.

2.3.2 SURPLUS FROM OBSOLETE OR DAMAGED STOCKS

According to Doubler and Burth (1996), it is unreasonable to expect that sales forecasting

and planning well always be accurate. In case of over anticipation, materials excess above

actual requirement inevitably results. An automobile company for instance may anticipate

that customers prefer seats made of real leather for they will be willing to pay extra

charges. Time will prove however that most customers prefer imitated leather at no

additional cost and this leaves the manufacturer with a surplus of real leather that must be

disposed of.

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Also, changes occur constantly in the designs and specification of fast moving

technological products. As a consequence, obsolete products and their parts constitute

continuous source of surplus materials.

In addition, production planning takes place well in advance of the time production process

actually begins. At any time prior to the beginning of production or manufacturing process,

either technical or product changes can completely alter the schedule of materials required

for any specific production run. Even after production has taking of, changes in highly

technical items often made some materials in inventory obsolete.

Moreover, the ease with which technical advancement can generate surpluses is highlighted

by the single fact that in any firms today, over 50% of the products they sell or use did not

even exist a decade ago.

To add to, excessive forward buying is another common source of surplus materials. Some

firms forward buy only under specific economic circumstances; others forward buy as a

matter of routine company policy. Regardless of the reason for using this method of

buying, it entails the hazards of surplus generation from obsolescence, deterioration or

excessive inventory holding.

Doubler and Burth go further to state that planned over buying and over production

represents still other sources of surplus stocks. Some firms such as machinery and

automobile manufacturers produce more parts for specific models of equipments and

automobiles than they may sell because of what is called ‘the life of time’ problem.

Frequently, it is more economical for an automobile manufacturer to produce an over

supply of certain replacement parts for new cars while the production line for these cars is

still in operation and pay for their storage for as long as the manufacturer accepts the

responsibly of furnishing replacement parts for this model than it is to pay the high start up

cost, entailed in re-establishment production facilities for the same parts some years later.

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Furthermore any warehousing operation regardless of how efficiently it is managed can

also encounter some surpluses due to breakages, deterioration and errors on record keeping.

According to Fearon (1993), excessive or surplus material is that stock which is in excess

of a reasonable requirement of the organization. It arises because of errors in the amount

bought or because anticipated production did not materialize.

Such materials may be handled in various ways, in some cases, it may be desirable merely

to store it until required, particularly if a material is of non-perishable nature, if storage

costs are not expensive and if there is reasonable expectation that the material will be

require in future. Occasionally, it may be substituted for more active material or if the

company operates a number of plants, it may be possible to transfer the excesses to another

plant. There are times however, when these conditions do not exist and when fairly prompt

sale is desirable.

Fearon goes on to state further that another source of excess material usually appears on the

completion of a construction project. Accompany just preferred to cover this situation as

follows:

“All new materials for a specific purpose on order and not used on the project in

question constitute an inventory and must be treated as such. As soon as the work is

completed, all new and un-used materials should be transferred immediately to the custody

of the stores department. The original cost of the material should be charged to

“reclamation stores”, which is an unclassified segment of the stores accounts and credited

to the property order on authorization. Provision is also made for the proper accounting of

used materials credited resulting from demolishing work carried out in conjunction with

construction projects.

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Fearon states in addition that, in the case of a large manufacturing company, if the sales

department has definitely obligated the company to produce a certain quantity of an item or

has set up a sales budget for that quantity and has been accepted by management, and later

finds itself unable to sell all the items produced, the losses sustained on the excess

materials are charged to those particular items or sales classification. The same practice is

follow if the sales department by virtue of recommending a charge in design creates an

excess material. This company feels that the loss should not be absorbed generally or

distributed to other departments.

2.3.3 SURPLUS FROM OBSOLETE OR DAMAGED EQUIPMENT

In the words of Doubler and Burth (1996), all machines, tools and equipment at a point in

their life become surplus for one or two basic reasons. They wear out or they become

technologically obsolete. In today’s rapidly advancing technological world, major

machines and tool hardly wear out, more frequently; they are replaced because they have

become technologically obsolete.

In addition to machine and tools, plants and equipment, most firms also have a large capital

investment in office equipment and in the physical plant itself. Competent management

makes every practical effort to extend the life of the firm’s equipment as long as possible

but, ultimately, because of obsolescence replacement of all capital assets even buildings

become mandatory.

In the view of Fearon (1993), obsolete materials differ from excess stock in that where as

the latter presumably could be consumed at some future date; the former is unlikely to be

ever used inside the organization, which purchased it. For example, typewriter ribbons in a

store become obsolete when the typewriters are replaced with computers. Materials become

obsolete as a result of a charge in the production process or when some better materials are

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substituted for that, which was originally in use. Once a material has been declared

obsolete, it is wise to dispose it of for the best price that can be obtained.

Moreover, according to Fearon, although materials or equipment may be obsolete to one

user, this does not mean that it is obsolete for others. An airline may decide to discontinue

using a certain type of aeroplane. This action makes not only the plane but also the repair

and maintenance part inventory obsolete. Both may have a substantial value to order

airlines or users of planes.

In the remainder of this chapter, the term surplus is used inclusively to indicate all classes

of scrap, spoiled materials or obsolete materials that still have economic worth.

2.4 MANAGEMENT OF SURPLUS

Fearon (1993), states that the management of surplus is sometimes treated as a secondary

management concern. The main concern of companies is the production of a marketable

product. The surpluses originating as by-products of this process are often regarded as a

necessary nuisance to handle as quickly as possible. It is estimated that less than one third

of all United State companies give adequate attention to the possible economic benefit of

surplus goods and used machines.

According to Fearon, they are not often thought of as a source of supplementary income.

Their value is seldom ever shown as a separate item on a company’s income statement or

balance sheet. Usually, the income they generate is buried in ‘the other incomes’ category

or treated as an offset to the cost of raw materials.

Moreover, since the variety of surplus is great and the amount of each type is likely to be

relatively small the seller does not usually become an expert in the business. In fact, surplus

materials are one of the few items in the world of business about which the buyer is

ordinarily better informed than the seller.

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 2.5 PURCHASING AND SURPLUS

In the words of Doubler and Burth (1996), the material cycle is not complete until all

surplus materials are disposed of in the most productive manner. Consequently, in firms

with material management department, the investment recovery function often reports to

the firm’s materials manager. In some operations having large dollar surpluses, however,

the investment-recovering unit reports directly to the plants manager or staff assistance.

Doubler and Burth states, however, that in a majority of cases the investment recovery unit

is assigned to the purchasing department. The reason for this is the fact that usually no

other department in the firm is as well qualify to perform the task. The professional and

managerial skills required for a successful disposal operation are also required to do a good

job of buying. No other department of a firm is as concern with or as inform about

materials, their market and related operating practices as the purchasing department.

Doubler and Burth states feather more that the purchasing department routinely buys a

large amount of raw materials, components parts, and equipment. It has knowledge about

whose makes these, what other firm use them, how they are used in its own firm, and how

much they cost. This is the precise knowledge needed to sell surpluses of these materials

successfully.

Also, a relatively large number of buyers in the metal industries regularly buy some form

of scraps or other surplus materials for their own manufacturing purposes. In situations like

this, purchasing personnel are particularly knowledgeable about the market in question.

Daily contact with industry representatives, coupled with the reading of purchasing and

trade journals, keeps them informed of surplus trends in a variety of markets. Additionally,

buyers frequently sell a significant portion of their firms; surpluses back to the suppliers

from whom they were purchased.

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2.6 INVESTMENT RECOVERING OR SALVAGE DEPARTMENT

According to Doubler and Burt (1996), some firms identify the operating group as their

‘salvage and reclamation’ unit. This function has grown in importance in most firms,

however, many have expanded and sophisticated its level of activity-and have graced the

operation with a new and more appropriate little, the investment recovering department.

Doubler and Burth states that whatever the unit is called, nearly all-manufacturing firms

should have such a functional activity organized and in operation. Depending on the

quantity and value, of the salvageable material involved, the unit can operate either on a

full or part – time basis. Many small firms, unfortunately, fail to establish such an operating

unit simply because they believe their volume of surplus does not justify a full –time

operation.

Assume that an obsolete motor generator is set to be disposed of. If there were no salvage

operation, the department head would dispose of the equipment “as is”. With the existence

of salvage operation, the first determination to be made would be whether the machine

could be sold as an operating machine, either in its present condition or after some minor

repair work was done. If it could not be sold as an operating machine, the second

determination would be to decide on the economic feasibility of disassembling it and

segregation it into its component parts and/or into its various kinds of metals, such as

copper, steel, or aluminum.

In the view of Doubler and Burth the component parts of some used machines can be

valued either for stock purposes or for sale. If the decision is against disassembly, the

machine will be sold “as is” for its scrap metal value. Each of the alternatives will produce

different net revenue. Selling the machine in operating condition usually produces the

greatest return, while selling it “as is” for scrap produces the least. Some firms with high –

15
dollar value surplus include in their investment recovery department recycling or recovery

equipment, such as balers, shedders, and metal separators.

Furthermore according to Doubler and Burth, overall company salvage expenses frequently

can be reduced greatly by pre-planning and instituting simple operating procedures. For

example, sorting surplus metals by type can often be accomplished inexpensively simply

by providing suitable marked containers at the point of accumulation. This easy procedure

increases scrap value. For example, if high- carbon- steel cutting tools are mixed with less

expensive grades of metal scrap, the money realized from selling the mixed as a single lot

will be considerably less than that which will result from selling the cutting tools as one lot

and the remainder of the scrap as another. To simplify sorting of this type, barrels of

different collectors can be used for different kinds of scrap metals. Similarly, surplus paper,

cardboard and similar surplus materials should be segregated during accumulation by using

the method that will bring the highest selling price. An investment recovery unit typically

handles all three kinds of surplus: scrap, surplus stock and surplus equipment.

2.7 DISPOSAL OF SURPLUS

According to Baily, Jessop, Farmer and Jones (1994), when considering how to dispose of

scrap and other surplus materials questions to be asked include:

(a) Can the item be cannibalized for useful part prior to scraping?

(b) Can we sell the item in the market place rather than as scrap? (E.g. Back to the

supplier if redundant stock).

(c) If we are to sell materials as scrap, can we get a better price if we segregate by type

or size or by bailing into cube form or cutting into smaller sizes?

(d) Can we come into agreement with a merchant whereby he provides skips/

containers for housing the scrap prior to collection?

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Bailey, Jessop, Farmer and Jones (1996) states that, the cost associated with disposing of

materials needs to be kept in mind when examining the issues involved. It makes no sense

to install some sophisticated scrap system if the cost of doing so is greater than the money

received. The various ways in which surplus materials are disposed of influence the rate of

return. In the following paragraphs, the various disposal avenues are discussed.

2.7.1 USE WITHIN THE FIRM

According to Fearon (1996), the organization has to determine whether the material can be

reclaimed or modify for use by welding. Welding has become a very important factor in

advantageously disposing of materials. Defective and spoiled castings and fabricated metal

parts can be reclaimed at a tittle expense; short ends of bar stock, pipe, and so on can be

welded into working lengths; and worn or broken jigs, fixtures, and machine parts can be

reduced in size by either the arc or acetylene cutting process. Or, perhaps a steel washer

could be stamped out of a piece of scrap (referred to as off-fall) which is normal out put of

the production process. Precious metal scraps often is shipped to a precious metal refiner,

who processes it into its original form and returns it for use as a raw material, charging the

purchasing department a tolling charge for its services.

The institute of scrap recycling industries and the Environmental protection agency of U S

forecast that, by the mid-1990s, the United States will be recycling 50 percent of the

aluminum; 40 percent of the steel; and 20 percent of the wood, leather, textile, and rubber

needed for new product manufacturing. One of the problems faced by purchasers is the

tendency to coat, bond, or blend materials in such a way that they become non recyclable in

the future.

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2.7.2 RETURN TO SUPPLIER

In the word of Doubler and Burth (1996), if the surplus material cannot be used within the

firm, the return to supplier method of disposal is generally the next best method. Suppliers

typically allow the return of both new and used surpluses as a courtesy of good accounts.

Saleable materials returned from inventory are traditionally accepted at the original cost,

less a nominal restocking charge.

Since different firms have different level of technical requirement, suppliers can frequently

resell even obsolete inventory items at full price. Scrap metals can sometimes be retuned to

suppliers, depending on the size of the buyers’ account, the metal involved, degree of

contamination, and the current economics of the scrap market. When scrap is scarce, many

suppliers routinely require the return of scrap as a precondition of further sales. Particular

attention should be paid to the so-called exotic metals, which include most non-ferrous

metals, alloy steels, and tool steels. Usually these metals can be sold to the supplier at

prices much higher than are attainable in the open market. Supplier policies regarding the

return of used equipment to the manufacturer or dealer from whom it was purchased vary

widely with the economics of the used equipment market and the sales policies.

In the wards of Fearon (1993), return to supplier means that the item can be returned to the

manufacturer or supplier from whom it was purchased, either for cash or for credit on the

other latter purchases. Large quantity purchasers sell a great deal of steel scrap directly

back to the mills, which uses it as raw material in the steel production process. Normally,

the firm using this disposal avenue must be a large consumer. In the case of surplus (new)

inventory items, the original vendor may be willing to allow full credit on returned items.

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2.7.3 SELLING TO OTHER USERS OR FIRMS

According to Doubler and Burth (1996), some companies sell surplus materials and

equipment directly to other firms. Sales of equipment to other firms depend primarily on

the conditions of the equipment pricing conditions and the availability of similar equipment

from other sources. Equipment sales made directly to a user typically resulted in a better

price than sales made to dealers or brokers.

Sales of production surpluses are most profitable when the surplus of one company is the

raw material of another. For example, if a firm can sell its waste paper back to the paper

mill, it generally will get the highest price and cause the least pollution.

In Fearon’s view (1993), the company would have to determine whether any other

manufacturers can use the material either “as is”, or with economical modification. It

should be noted that sales can often be made direct to another user who may be able to use

a disposal item in lieu of raw material they currently are buying. Or, one firm’s surplus or

obsolete equipment may solve another firm’s equipment requirement nicely. A good

example of this is the market, which has existed for year for DC-3 aircraft, which are

obsolete for one air carrier and are bought for use by supplement or commuter airline.

In some cases and particularly prevalent in public agencies, surplus or obsolete equipment

and vehicles are sold at public auction. Some companies permit employees to buy, as part

of their employee relations programme, used equipment or surplus materials at a pre set

price. If this is than, adequate control should be established to ensure that the returns to the

firm are at a reasonable level.

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2.7.4 SALE TO INTERMEDIARIES

According to Doubler and Burth (1996), dealers or brokers are specialized intermediaries

who collect, sort and process surplus materials. Surplus dealers and brokers (referred to as

dealers) constitute an excellent outlet for surplus materials. When a firm advertises surplus

materials for sale, dealers often respond. Transactions with dealers are usually “where is, as

is”, and most of the time they are for cash. Surplus machines tool dealers, for example,

cooperate in two ways: by auction, which usually involves selling a plant’s entire

equipment inventories; or by purchase of small lots.

Doubler and Burth states furthermore that for auctions, the dealer receives a commission

and seldom does more to the equipment than show it to bidders. For small lot transactions,

however, the dealer pays the owner cash, and then often reconditions or rebuilds machine

tools before selling them. Normally, it is not profitable for the original owner to recondition

equipment before selling it.

2.7.5 DISCARD, DESTROYS OR DONATE THE ITEM OR MATERIAL.

According to Fearon (1993), if no buyer or user can be found for the item, the firm may

have to destroy or bury it. This can be very expensive because of the landfill shortage and

caution should be taken to ensure that disposal methods for dangerous materials do not

create a safety hazard to the public.

The investment Recovery Association, an international non-profit trade association of firms

with established investment recovery programmes, provides assistance in disposing of

recyclable products, capital assets and surplus materials. In some instances a firm may

decide to donate used equipment to an educational or charitable institution, taken tax

deduction. Since the tax aspect of such contribution is complex, the advice of the tax

20
counsel should be obtained as part of the decision making process. A number of non-profit

clearinghouses also distribute goods to schools and charities

2.7.6 SELLING TO EMPLOYEES

According to Doubler and Burth (1996), many firms make it a practice to sell both the

products they manufacture and their surpluses to their employees. If the surpluses are the

result of over stocking or obsolescence and the materials are new or good condition, or if

they are odds and ends of scrap desired by “do-it yourself” employees, this can be a

satisfactory method of disposal. On the other hand, if the surpluses are not in fully

satisfactory condition, such sales, regardless of their attractive prices can create resentment

in employees towards their employers. Used autobiles can be an especially dangerous item

of equipment to sell to employees.

Doubler and Burth state further that, because of the numerous potential disadvantages

involved, many sophisticated firms will not sell used surpluses (especially equipment) to

their employees. Beside possible dissatisfaction, selling to their employees often entails

excessive paper work, and it always involves an administrative burden in an effort to

ensure complete impartiality among the employees.

Also, high administrative costs have caused some firm to set minimum dollar amount for

sales to employees. Other firms, to avoid administrative cost give their employees surplus

materials having only a nominal value.

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2.7.7 SELLING BY CONTRACT

In the words of Doubler and Burth (1996), some contractual considerations apply to the

three major categories of materials that are sold as surplus. Scraps metals, depending on

existing economic conditions are best disposed of by either a short or a long-term contract

made with a local scrap dealer. The dealer getting the contract should be selected after an

investigation of at least three dealers. Because of the breadth of scrap market activities, a

purchasing department should generally experience little difficulty in interesting three or

more capable dealers who will compete vigorously for the business.

Doubler and Burth (1996) states further that; the highly competitive nature of the scrap

business usually keeps the variation in bid prices within a narrow range. Local dealers have

an operating and transportation advantage over more distant competitors; also, they can

provide more frequent pick ups and more specialized contract service. Also, publish market

prices are available for many variety of scrap, and these prices are frequently used as the

basis for long-term contract prices. Bid prices are normally used for short-term contract

prices.

Furthermore surplus stock, that cannot be return to the supplier, is best disposed of by sell

to jobbers or secondhand dealers. Such sales are most frequently made on a competitive bid

basis, and competition for these materials is usually keen.

Moreover, surplus equipment typically can be disposed of most effectively by obtaining

competitive bids from dealers. However, on occasion negotiation is used.

In addition, Doubler and Burth states that intense competition is traditionally developed

after a firm acquires a select group of dealers who are interested in bidding for its surplus

equipment on a continuing basis. Fixed prices to dealers are satisfactory when a selling

firm is sure of the equipment’s faire selling price. Auction is frequently used as a quick and

convenient method of disposing of large quantity of equipment. Occasionally,

22
advertisements in trade journals or trade papers prove effective in selling this category of

surplus.

2.7.8 A SURPLUS DISPOSAL EXAMPLE

According to Fearon (1993), disposal is still a managerial problem since most items can be

disposed of profitably by use of imagination. The following examples are from a large

forest product company, which acquired a logging –lumber- veneer -flooring operation that

was on the verge of bankruptcy.

The new manager called a meeting of all salaried personnel at which he stressed two major

points.

(a) “We don’t have any problem only opportunities to solve a few difficulties.”

(b) “There is no such thing as junk or waste because there is a buyer for everything at

the right price “.

He concluded by telling the staff he expected them to provide him with the means of

profitably disposing of all by-products within two months. The following is a partial list

of the accomplishment within three months of this meeting.

Two years before the takeover, the state department of lands and feretory of

UnitedState had insisted that some areas be “clean –cut” and reseeded to birch, balsam

fir and spruce which was just being cut and left to rot. A visit to a news print company

resulted in an offer of $26, per cord for this pulpwood delivered to their plant

contractors were hired to cut and deliver it for $22, resulting in a profit of $4 per cord to

the company, plus100% savings on the former cost of cutting the spruce and balsam fir.

A trucker had been hired to carry away veneer “cores”. A gang saw was installed to cut

then into boards, which were automatically the right length for crating veneer, saving

the veneer mill from having to buy crating materials from the sawmill. Surplus “cores”

23
were treated and sold as ornamental fence post at $1 each. A plant visit to a fine paper

manufacturer resulted in an offer of $28 per ton for hardwood chips from the veneer

and flooring mills which previously had beer damped in saw dust pit.

Cut offs from the flooring mill, which had formerly been thrown into the sawdust pit,

were shipped some distance for $40 per ton (delivered) to a manufacturer of hard wood

floor tiles.

Fearon states furthermore that, slabs from the sawmill, which had formerly been

chipped and damped in the sawdust pit, were end- cut and sold to a distributor who

stored then for a year (to air dry) and then resold them to campers for firewood over a

radius of about 50mills. He bought them for $4 per “estimated cord” (and made a

killing by selling them for about $32 per cord). This distributor initiated negotiations to

cut up the “hash” for the same purpose. This would be pure windfall profit and would

leave less debris in the logging areas.

24
 CHAPTER THREE

RESEARCH METHODOLOGY

3.0 INTRODUCTION

In the proceeding chapter which is the review of the relevant literature to the effective

management of surplus materials the researcher examined different subjects and issues as

discussed by various authors. The salient issues reviewed in that chapter included the

generation of surplus, the disposal of surpluses and how revenue is generated from

surpluses. It was observed that to reduce wastage, there is the necessity to develop the

correct specification and supply the appropriate technology.

This chapter focuses attention on the research methodology and also explains the method

employed in gathering and collecting of data. It further identified the process of arriving at

solution to the problem and this providing basis for action based on planned, systematic

collection analysis and interpretation of data.

3.1 METHODOLOGY

The methodology part comprises the research design, study area, sources of data, target

population and the sampling technique used in attaining the objective of this research.

There was as well the use of qualitative and evaluative analysis in the methodology to

assist the researcher to have a first-hand interpretation of the data collected to make

analysis more meaningful to aid the objectives of the research.

3.1.1 RESEARCH DESIGN

For the purpose of the research work, the researcher designed the research in order to suit

the objectives of the research. The researcher employed a research design that would best

answer the research questions that governs the study. The researcher then used both

25
assessment and evaluation, since the researcher need to find all facts pertaining to the study

that exist at a point in time and also make judgment about the effectiveness, relevance,

efficiency or desirability of the study.

3.1.2 STUDY POPULATION

For the purpose of the study, the researcher limited himself to employees of Metro Mass

Transport. The total population chosen for the study is fifty[50] and out of this number a

sample of thirty [30] was selected and served with questionnaires and the respondents was

made up of twelve [12] top management, ten [10] middle management and eight [8] lower

management (junior staff) mainly fromscraps department and stores department.

3.1.3 SAMPLING TECHNIQUE

Due to the nature of the research work, the researcher thus considered the use of non-

probability sampling method in the acquisition of information from selected sample of the

study population. This eased the researcher in his data collection and also assisted in the

saving of cost as a result of embarking on this research.

The researcher as well focused much on the use of purposive sampling to help the

researcher select the appropriate sample for the research. The sole objective of the use of

purposive sampling is to focus on particular characteristic of the target population that were

of interest and best motivated and enabled in the answering of the research questions.

Purposive sampling provided the researcher with several justifications to make necessary

generalization for the sample that was studied. But despite its merits, the use of purposive

sampling was prone to researchers’ bias.

26
3.1.4 SOURCE OF DATA

The data for this study were obtained from both primary and secondary source. The

primary source enabled the researcher to acquire first-hand data and materials on the issue

under study.

The primary data were acquired through the use of questionnaires, informal interviews as

well as personal observation and was complemented by secondary data from publication,

internet, etc.

The secondary source was extensively made use of in the literature review of the report.

The secondary data was of profound use to the researcher which actually enabled him to

look for and made enquires to top information for this work.

Similarly, it broadened the researcher’s slope of purpose which helped the researcher in

one way or the other.

3.1.5 DATA COLLECTION METHODS

The researcher used both the primary and secondary method of data collection to acquire

vivid response from respondents to the problem identified.

3.1.5.1 PRIMARY DATA COLLECTION

Primary data is the original and first-hand information gathered and recorded for the

purpose of the current research work embarked on by the researcher.

Due to the nature and scope of the population the researcher considered using interviews,

questionnaires and as well focused on group discussion in assembling and gathering of data

for the sample.

27
QUESTIONNAIRES

As a major source of obtaining data, set of clear questions were defined to reflect the

problem and objective of the research work. The questions consisted of closed-ended and

open-ended as well as multiple choice question for easier answers or response.

INFORMAL INTERVIEW

 In line with this, the researcher had face-to-face interviews with respondent who

completed the prepared questionnaires that the researcher used. The interaction

offered the researcher the chance to raise a whole lot of issues for clarification

where responses provided to the open-ended question stands to be ambiguous.

PERSONALOBSERVATION

Personal observation was used in recording all activities at the organization which pertains

to the research and of which seek to suit the research objectives. Employees concerning the

topic were systematically observed under disguise. This avoiding the tendency of the

observation being seen, as reflection of the interesting curiosity.

3.1.5.2 SECONDARY DATA COLLECTION

The secondary data collection placed much emphasis on the use of the literature review

which was used to capture a lot of information about the research topic. The literature

review was also considered under the secondary data since it contains detailed research

information about the procurement plan.

Also articles, books, internet, journals and other study objects that capture information to

the related problem will be considered for gathering such data for the studies.

28
3.1.6 PILOT STUDIES

A pilot study was conducted on ten employees at the stores section and scraps departments

and two (2) from the management board of Metro Mass Transport. This was done to ensure

the efficient and effective use of the data collection methods.

Questions were asked in the form of questionnaires for which respondents were given the

pace to air their views and perceptions about the project work by responding to questions

provided in the questionnaire. The questionnaires in some cases were also used as

interview guide, especially for the staff who had no time to answer questions which was

given in writings.

Interview guide was used in the pilot study to have a close relation with respondents to

explain complex questions and clarify all cumbersome issues that would pose out.

Hence, the pilot studies assisted the researcher to test, discover and solve problems before

the full implementations on the research activity and administration of the questionnaires to

target population.

3.1.7 TRIANGULATION

There was the need to ensure validity and reliability of the data. Both questionnaire and

interview employed in the research activity provided the same result. The researcher used

questionnaire to acquire detailed information from the respondents and used interviews to

clarify some unclear and imprecise responses. This ensured validity and reliability of

responses from respondents and also proved the efficient and effective use of the research

instrument employed.

29
3.1.8 DATA ANALYSIS PROCEDURES

The method used to analyze the data collected was the description approach, statistical

table were drawn based on percentage corresponding absolute figures. They were prepared

after the questionnaires had been collected and analyzed, and the analysis was based on

both qualitative and evaluative analysis.

The qualitative analysis gave detailed descriptions and explanations of the phenomenon

studied rather than providing and analysing statistics.

Evaluative analysis gave or assigned values and figures to describe the facts and data

gained and such the analysis was based on examination and judgment of the values

gathered.

The data was analyzed based on the research questions and data collected from the research

question was analyzed by the use of tables. This made the presentation concise and

accurate for anybody to decipher the interpretations. It was also used to facilitate the

understanding of complex numerical data. in addition, the analysis are intended to attract

attention to produce pleasing appearance and make them easier for readers to understand

the tables and other related statistical tool used.

30
 CHAPTER FOUR

DATA ANALYSIS AND FINDINGS

4.0 INTRODUCTION

In the preceding chapter which is scope of the study, attention was focused on the history,

activities and current state of the organization which is the subject of the research.

This chapter is a discussion of the various research tools employed for the study. The

researcher also analyses the information that was gathered from the research questions and

subsequently draws conclusions.

4.1 ANALYSIS OF QUESTIONNAIRE RESPONSES

4.1.0 DECISION RULE

Before the researcher goes out to analyze questionnaire responses, it is important to set out

the decision rule. The total population chosen for the study was 50 and out of this number a

sample of 30 was selected and served with questionnaires. This represents 60% of the total

population. And outcome of 57% and above was accepted as significant.

31
QUESTION 1

How do surplus occur in our establishment?

The rational behind this question was to ascertain the sources of surplus.

TABLE 4.1.1: surplus occurrence in the establishment

140
Number of Percentage
respondents %
120
100
80
60
Percentages
40 Number of Respondents
20
0
es ts ps ce l
ta
ag Cu cra cen To
m S
Da Off ol
es
s
ob
Damages
4 13
Off cuts
2 7
Scraps
18 60
Obsolescence
6 20
Total
30 100
Source: Author's field survey 2013

When the question asked on ''how surplus occur in our establishment?'' 4 respondents

representing 13% of the total respondents indicated that surpluses occurred through

damages, 2 respondents representing 7% indicated that surplus were through off cuts, 18

respondents representing 60% were through scraps and the remaining 20% attributed to

obsolescence respectively. This is illustrated in the diagram above

32
 QUESTION 2

What type of input do you use in your organization?

This question was asked to ascertain the types of surplus generated.

TABLE 4.1.2: Input used in the organization

Number of Percentage
140
respondents %
120
100
80
60
Percentages
40
Number of Respondents
20
0
ls s ts l
ria m ar ta
e Il te P To
at ta en
t
M pi n
Ra
w Ca po
om
C
Raw materials
5 17
Capital items
20 66
Component parts
5 17
Total
30 100
Source Author's field survey 2013

When question was asked on" what type of input do you used in your organization?"5

respondents representing 17% indicated raw materials, 20 respondents representing 66%

indicated capital items, 5 respondents representing17% of the total respondents indicated

component parts respectively. This is illustrated in the diagram above.

33
QUESTION 3

Do you have a storage point for surpluses?

This question was posed because every organization that generates surpluses especially

scraps needs to have a scraps yard.

TABLE 4.1. 3: Storage point for surpluses

Number of Percentag
140
respondent e %
120 s

100

80
Percentage
Number of respondant
60

40

20

0
Yes No Total

Yes -
-
No 1
30 00
Total
30 100
Source Author's field survey 2013

When the question was asked '' Do you have a storage point for surpluses?'' none of the

respondents answered yes but 30 respondents representing 100% of the total respondents

answered No. This entails that respondents who answered No dominated the entire survey

conducted. This is illustrated in the diagram above.

34
QUESTION 4

How do you handle items or products?

This question was asked to enquire of how fast or efficiently work is done.

Manual handling increases the rate of damages and mechanical handling reduces the rate of

damages.

TABLE 4.1.4: Handle of products

Number of Percentage
140
respondent %
120 s
100

80
Percentages
60 Number of respondant

40

20

0
Manual Mechanical Total

Manual
11 37
Mechanical 6
19 3
Total 1
30 00
Source Author's field survey 2013

When the question was asked on ''How items or products were handled?'' 11 respondents

representing 37% of the total respondents agreed to the manual option whiles 19

respondents representing 63% agreed to the mechanical option of the study respectively.

this explains that the mechanical option dominated the entire survey conducted. This is

illustrated in the diagram above.

35
QUESTION 5

Do you segregate the scrap surpluses before disposal?

This question was asked because segregated scraps often have greater money than non-

segregated scraps.

TABLE 4.1.5: Segregation of scrap surpluses

Number of Percentage
140 respondent %
120 s

100

80
Percentage
Number of respondent
60

40

20

0
Yes No Total

Yes 10
30 0
No -
-
Total 1
30 00
Source Author's field survey 2013

When it came to the issue of surplus segregation before disposal, 30 respondents

representing 100% answered Yes whiles none of the respondents answered No representing

0% of the total respondents. This explains that Yes alternative dominated the entire survey

conducted. This is illustrated in the diagram above

36
QUESTION 6

What methods of disposal are employed?

This question was asked to ascertain the method of disposal that was employed in the

organisation.

Number of Percentag
140
120 respondents (%)
100
80
60
40
20 Percentages
0 Number of respondent
rs rs s l
lie r m
ke ee ta
p e fi ro loy To
p th b p
su in or em
to th s to
rn wi ale
r
es
etu ed e u
R Us
d ss
s to eei
l e Fr
Sa
Return to suppliers
2 7
Used within the firma
10 3
Sale to dealers or brokers
10 33
Free issue to employees
8 27
Total
30 100
TABLE 4.1. 6: Methods of disposal

Source Author's field survey 2013

When the question was asked on what methods of disposal were employed? 2 respondents

representing 7% answered that it should be returned to suppliers, 10 respondents

representing 30% answered that it should be used within the firm, 10 respondents

representing 33% answered that it should be sold to dealers or brokers, 8 respondents

representing 27% answered that it should be issued free to employees respectively. This is

illustrated in the diagram above.

37
 QUESTION 7

Who is responsible for disposing of surplus?

This question was to find out the department or section that has responsibility for surplus

disposal.

TABLE 4.1. 7: Surplus disposal

Number of Percentage
140
respondents (%)
120
100
80
60
Percentage
40 Number of respondents
20
0
er r nt rs l
as ee ta
h on u lta the To
rc cti ns O
Pu Au co
p
ra
Sc

Purchaser -
-
Auctioneer -
-
Scrap consultant
10 33
Others
20 67
Total
30 100
Source Author's field survey 2013

When the question was asked on who is responsible for disposal of surplus. None of the

respondent representing 0% answered to the purchaser option, also none of the respondent

answered to the auctioneer option,10 respondents representing 33% answered to the scrap

38
consultant of the total respondents and 20 respondents representing 67% answered to others

respectively.

QUESTION 8

Does the management offer training opportunities for the employees?

This question was asked because the sort of training given will affect the way surpluses are

managed

TABLE 4.1.8 Training opportunities for employees

Number of Percentage %
140
respondents
120
100
80 Percentage %
60 Number of re-
spondents
40
20
0
Yes No Total
Yes 30 100

No - -

Total 30 100

Source Author's field survey 2013

When the question was asked on "Does management offer training opportunities?"30

respondents representing 100% answered Yes whiles none of the respondent answered No

representing 0% of the total respondents. This explains that those who answered Yes

dominated in the survey conducted.

39
QUESTION 9

What type of training is offered?

This was asked to know how equipped and capable the staff is in managing surpluses.

TABLE 4.1. 9: Training offered

Number of Percentage
100
respondents (%)
80
60
40
20
Percentage (%)
0
Number of respondents
ls ps s
eria cra ts e
m
at of
s y
fm n ngs
i
go atio rd
lin eg ec
o
nd gr r
Ha Se p er
P ro

Handling of materials
22 73
Segregation of scraps
3 10
Proper recording systems
5 17
Total
30 100
Source Author's field survey 2013

When the question was asked on" what type of training is offered?"22 respondents

representing 73% indicated handling of materials,3 respondents representing 10% indicated

segregation of scraps, 5 respondents representing 17% indicated proper recording systems

respectively. This is the illustration of the diagram above

40
 QUESTION 10

What are some of the expenses incurred on the management of surplus?

This question was asked to determine whether the expenses incurred exceed sales value of

surplus.

TABLE 4.1. 10: Expenses incurred on the management of surplus

Number of Percentage
80 respondents (%)
70
60
50
40
30 Percentage (%)
20 Number of respondents
10
0
g rt st
usin spo co
ho n on
of tra ati
st of eg
o st gr
C Co Se

Cost of housing
18 60
Cost of transport -
-
Segregation cost
2 7
Handling cost
10 33
Total
30 100
Source Author's field survey 2013

When the question was asked on "what are some of the expenses incurred in management

of supluses?18 respondents representing 60% indicated cost of housing, none of the

respondents indicated cost of transport, 2respondents representing 7% indicated

segregation cost and 10 respondents representing 33% indicated handling cost respectively.

This explains that cost of housing dominated in the survey conducted.

41
4.4 SUMMARY OF RESEARCH FINDINGS

The objective of the study was to find out how surplus materials can be managed

effectively in the transport industry. The researcher in the course of the study made some

findings. The findings have been analyzed and enumerated below. Data was obtained

through questionnaires, personal interviews, observation and informal communication.

4.5 SUMMARY

In this chapter various research tools adopted were discussed. The researcher also sort to

analyse the findings which were critical to the attainment of the stated objectives and drew

conclusion for them. The next and last chapter, the whole research work will be

summarized. Suggestions and recommendations will be made to the management of Metro

Mass Transport- Takoradi, which it is hoped will help them managed and dispose of

surpluses effectively and hence generates revenue from it.

42
 CHAPTER FIVE

SUMMARY, RECOMMENDATIONS AND CONCLUSIONS

5.0 INTRODUCTION

The previous chapter sought to analyze information that was gathered from the research

questionnaire. The researcher went further to examine ten (10) key that were critical to the

achievement of the objectives that were stated in the introduction to the study. Relevant

conclusions were drawn from the ten selected key questions. The various tools adopted for

the research were also analyzed

In this last and final chapter, the researcher presents a summary of the whole research

work. This section will move on to further make suggestions and recommendations that

will aid the management of Metro Mass Transport- Takoradi to effectively manage and

dispose of surpluses

5.1 SUMMARY

This research work is being presented in partial fulfilment of the requirement for the award

of the Higher National Diploma (HND). The study consists of five (5) chapters. The

introductory chapter deals with the statement of the problem, objectives of the study, the

scope of the study, constraints and the plan of work and the significance of the study.

The review of related literature as presented in chapter two provides details of the various

textbooks that the researcher consulted in undertaking the study. Chapter three is a

discussion of the organization which is the subject of the study.

The data gathering instrument used for carrying out this research work appears in chapter

four. It consists of the major research tools which is the primary research method and

43
secondary research method. The strength and weaknesses of these tools were also

enumerated. The chapter also contains the analysis of findings from research

questionnaires.

Here the researcher identified 10 key questions which were relevant to the objectives of the

study and conclusions drawn to them.

The final chapter is about the summary, conclusions and recommendations. The section

summarizes the whole research work and makes conclusions based on which

recommendations were made to the management of Metro Mass Transport-Takoradi on the

effective management of surplus materials

5.2 CONCLUSION

The following paragraphs deal with the conclusions that were drawn from the ten key

questions selected from the research questionnaire.

 OCCURANCE OF SURPLUS

The research questionnaire revealed that surpluses do occur in the company through

damages, obsolescence and residues of materials such as oil and lubricants. The researcher

noticed that, the major source of surplus is through scrap and obsolescence.

 STORAGE OF SURPLUS

It was revealed that the company does not have a point specifically designated to the

storage of surplus materials.

44
  HANDLING OF SURPLUS

The research questionnaire revealed that both manual and mechanical means of handling

are employed. It was however observed that the mechanical handling equipment is not for

the salvage section. And that the section relies on other department for these devices which

slows down activities at the stores and make work tedious.

 DISPOSAL OF SURPLUS

The researcher found out that, there are various means through which scrap are disposed at

Metro Mass Transport. The surpluses which result from oils are sometimes given to

workers example, dirty oil. Those that can be reused or needed by other departments are

retained. Example, dirty oil may be used to wash bolt and nuts. The rest of the surplus,

particularly scrap surplus which forms the bulk is sold to dealers or brokers. It was again

realized that certain items are given to workers free of charge. Such items include paint,

consumables among others.

The researcher observed that some user department deliberately over specify since they

have the view that the left-over will be given to them freely. It also came to the notice of

the researcher that the prices of scrap surpluses are very low as compared to the prices the

dealers and brokers charge on the items on the market.

 MANAGEMENT OF SURPLUS

A surprising observation that was made was that at Metro Mass Transport a committee is in

charge of management and disposal of surpluses. The researcher was surprised since

normally supplies staffs are put in charge of surpluses.

45
5.3 RECOMMENDATIONS

This section contains the recommendations that the researcher offers to management based

on the problems that were identified in the conclusion of the study.

 OCCURRENCE OF SURPLUS

The researcher recommends to management to recruit qualified and efficient purchasers to

put in proper requisitions for needed materials. Again, the material requirement planning

staff must also be trained well to make the right forecast in their planning to reduce

wastage. The researcher also encourages management to educate the various user

departments on the need to specify correctly to reduce wastage.

 STORAGE OF SURPLUS

The researcher suggests that management should do their possible best to put up a special

storage place so that surpluses generated can be housed to enhanced proper management

and disposal of surplus materials.

 MANAGEMENT OF SCRAP SURPLUSES

It is recommended that supplies staffs are put in charge of scrap surpluses since they are

more equipped by the nature of their work to carry out this duty more efficiently and

effectively than the committee.

 HANDLING OF SCRAPS SURPLUSES

The researcher recommended that, since a lot of surplus items at the store are priced based

on tonnage, devices such as weighbridge which will determine the exact tonnage per item

should be provided if possible since this will go a long way to increase revenue through

proper pricing of scrap surpluses. The management must also acquire material handling

equipment purposely for the handling of surplus materials.

46
  TRAINING PROGRAMS

The research questionnaire showed that management of Metro Mass Transport does

provide training for the store staff. Notable among such training programme are handling

of materials and safety procedures in handling and disposal of scrap surpluses. This is a

step in the right direction and the researcher encourages management to continue

organizing such training programme for staff that helps with the disposal and management

of scrap surpluses.

 DISPOSAL OF SURPLUS

For an effective disposal of surplus, the researcher suggests that management put proper

measures to control the occurrence of scrap surpluses and reduce it to a minimum.

It was observed that some user department deliberately over specify since they have the

view that the left-over will be given to them freely. Based on this observation, the

researcher recommends management to place a price on these items and not to give them

out freely to workers in order to reduce the rate at which over specifications are made.

It also came to the notice of the researcher that the prices of scrap items are very low when

compared with the prices the dealers and brokers charge on the items on the market. The

researcher therefore suggests that market surveys should be conducted periodically to

ascertain ruling prices so that a more appreciable value can be placed on scrap surpluses.

 MANAGEMENT OF SURPLUSES

It is recommended that supplies staffs are put in charge of scrap surpluses since they are

more equipped by the nature of their work to carry out this duty more efficiently and

effectively than the committee.

47
48