DISTRIBUTION STATEMENT A: Approved for public release; distribution is unlimited.

NONRESIDENT TRAINING COURSE

July 1986

Ship�s Serviceman

1 & C

NAVEDTRA 14237

DISTRIBUTION STATEMENT A: Approved for public release; distribution is unlimited.

Although the words �he,� �him,� and �his� are used sparingly in this course to enhance communication, they are not intended to be gender driven or to affront or discriminate against anyone.

NAVAL EDUCATION AND TRAINING PROGRAMMANAGEMENT SUPPORT ACTIVITY

PENSACOLA, FLORIDA 32509-5000

Errata # 1 August 1991

Specific Instructions and Errata forTraining Manual (TRAMAN)

Ship's Serviceman 1&C

1. No attempt has been made to issue corrections for errors in typing,punctuation, etc., which are obvious.

2. For page 3-29. See reverse.

RECOMMENDATIONS FOR SHIP'S SERVICEMAN 1&C TRAINING MANUAL

1. Page 3-29-Delete the negative sentence that starts, "Safety rules are mostly little

things. ...." in the first paragraph in the "Safety Precautions" section.Replace it with, "Safety is your most important duty as a supervisor."

Add the following at the end of the "Safety Precautions" section:

Many of the Naval Ships' Technical Manuals (NSTMs), manufacturer'stechnical manuals, and every planned Maintenance System (PMS) maintenancerequirement card (MRC) include safety precautions. Additionally,OPNAVNIST 5100.19B, Naval Occupational Safety and Health (NAVOSH) ProgramManual for Forces Afloat, provide safety and occupational healthinformation. The safety precautions are for your protection and toprotect equipment.

During preventive and corrective maintenance, the procedures may callfor personal protective equipment (PPE) such as goggles, gloves, hearingprotection, and respirators. When specified, your use of PPE ismandatory. You must select PPE appropriate for the job since theequipment is manufactured and approved for different levels of protection.

If the procedure does not specify the PPE, and you aren't sure, ask yourSafety Officer.

Most machinery, spaces, and tools requiring you to wear hearingprotection are posted with hazardous noise signs or labels. Eye hazardousareas requiring you to wear goggles or safety glasses are also posted. Inareas where corrosive chemicals are mixed or used, an emergency eye washstation must be installed.

All lubricating agents, oils, cleaning materials, chemicals used inmaintenance and routine Ship's Servicemen work are hazardous materials.Hazardous materials require careful handling, storage, and disposal. PMSdocumentation provides hazard warnings or refers the maintenance man tothe Hazardous Materials User's Guide (HMUG). Material Safety data Sheets(MSDSs) also provide safety precautions for hazardous materials. Allcommands are required to have an MSDS for each hazardous materials theyhave in their inventory. You must be familiar with the dangers associatedwith the hazardous materials you use in you work. Additional informationis available from your commands's Hazardous Material/ Hazardous WasteCoordinator.

Workers must always consider electrical safety when working around anyelectrical or electronic machinery or equipment. Procedures normallyinclude special precautions and tag-out requirements for electricalsafety. You should review you command's electrical safety programinstruction and procedures before beginning any work on electrical orelectronic equipment or before working with portable electrical tools.

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PREFACE

By enrolling in this self-study course, you have demonstrated a desire to improve yourself and the Navy.

Remember, however, this self-study course is only one part of the total Navy training program. Practical

experience, schools, selected reading, and your desire to succeed are also necessary to successfully round

out a fully meaningful training program.

COURSE OVERVIEW: In completing this nonresident training course, you will demonstrate a

knowledge of the subject matter by correctly answering questions on the following subjects: Navy Supply

System, management, procurement, receipts and expenditures, ship's store operations, records and returns,

commissaries, and retail operation management (ROM) system.

THE COURSE: This self-study course is organized into subject matter areas, each containing learning

objectives to help you determine what you should learn along with text and illustrations to help you

understand the information. The subject matter reflects day-to-day requirements and experiences of

personnel in the rating or skill area. It also reflects guidance provided by Enlisted Community Managers

(ECMs) and other senior personnel, technical references, instructions, etc., and either the occupational or

naval standards, which are listed in the Manual of Navy Enlisted Manpower Personnel Classifications and Occupational Standards, NAVPERS 18068.

THE QUESTIONS: The questions that appear in this course are designed to help you understand the

material in the text.

VALUE: In completing this course, you will improve your military and professional knowledge.

Importantly, it can also help you study for the Navy-wide advancement in rate examination. If you are

studying and discover a reference in the text to another publication for further information, look it up.

1986 Edition Prepared by SHCS Joseph W. Doucette

Published by

NAVAL EDUCATION AND TRAINING

PROFESSIONAL DEVELOPMENT

AND TECHNOLOGY CENTER

NAVSUP Logistics Tracking Number

0504-LP-026-8740

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Sailor�s Creed

�I am a United States Sailor. I will support and defend the Constitution of the United States of America and I will obey the orders of those appointed over me. I represent the fighting spirit of the Navy and those who have gone before me to defend freedom and democracy around the world. I proudly serve my country�s Navy combat team with honor, courage and commitment. I am committed to excellence and the fair treatment of all.�

CONTENTS

CHAPTER

1. Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

2. Navy Supply System . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

3. Management . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

4. Procurement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

5. Receipts and Expenditures. . . . . . . . . . . . . . . . . . . . . . . . . . . .

6. Ship’s Store Operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

7. Records and Returns . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

8. Commissaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

9. Retail Operation Management (ROM) System . . . . . . . . . . .

APPENDIX

I. Definitions of Ship’s Store Terms . . . . . . . . . . . . . . . . . . . . . .

II. Suggested Supply Management InspectionCheck-off List . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Page

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2-1

3-1

4-1

5-1

6-1

7-1

8-1

9-1

AI-1

AII-1

III. Ship’s Store Operation. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . AIII-1

IV. Document Distribution . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . AIV-1

V. Ship’s Store Management Objectives . . . . . . . . . . . . . . . . . . . AV-1

VI. References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .AVI-1

INDEX . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-I

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INSTRUCTIONS FOR TAKING THE COURSE

ASSIGNMENTS The text pages that you are to study are listed at the beginning of each assignment. Study these pages carefully before attempting to answer the questions. Pay close attention to tables and illustrations and read the learning objectives. The learning objectives state what you should be able to do after studying the material. Answering the questions correctly helps you accomplish the objectives. SELECTING YOUR ANSWERS Read each question carefully, then select the BEST answer. You may refer freely to the text. The answers must be the result of your own work and decisions. You are prohibited from referring to or copying the answers of others and from giving answers to anyone else taking the course. SUBMITTING YOUR ASSIGNMENTS To have your assignments graded, you must be enrolled in the course with the Nonresident Training Course Administration Branch at the Naval Education and Training Professional Development and Technology Center (NETPDTC). Following enrollment, there are two ways of having your assignments graded: (1) use the Internet to submit your assignments as you complete them, or (2) send all the assignments at one time by mail to NETPDTC. Grading on the Internet: Advantages to Internet grading are: • you may submit your answers as soon as

you complete an assignment, and • you get your results faster; usually by the

next working day (approximately 24 hours). In addition to receiving grade results for each assignment, you will receive course completion confirmation once you have completed all the

assignments. To submit your assignment answers via the Internet, go to:

http://courses.cnet.navy.mil

Grading by Mail: When you submit answer sheets by mail, send all of your assignments at one time. Do NOT submit individual answer sheets for grading. Mail all of your assignments in an envelope, which you either provide yourself or obtain from your nearest Educational Services Officer (ESO). Submit answer sheets to:

COMMANDING OFFICER NETPDTC N331 6490 SAUFLEY FIELD ROAD PENSACOLA FL 32559-5000

Answer Sheets: All courses include one “scannable” answer sheet for each assignment. These answer sheets are preprinted with your SSN, name, assignment number, and course number. Explanations for completing the answer sheets are on the answer sheet. Do not use answer sheet reproductions: Use only the original answer sheets that we provide—reproductions will not work with our scanning equipment and cannot be processed. Follow the instructions for marking your answers on the answer sheet. Be sure that blocks 1, 2, and 3 are filled in correctly. This information is necessary for your course to be properly processed and for you to receive credit for your work. COMPLETION TIME Courses must be completed within 12 months from the date of enrollment. This includes time required to resubmit failed assignments.

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PASS/FAIL ASSIGNMENT PROCEDURES If your overall course score is 3.2 or higher, you will pass the course and will not be required to resubmit assignments. Once your assignments have been graded you will receive course completion confirmation. If you receive less than a 3.2 on any assignment and your overall course score is below 3.2, you will be given the opportunity to resubmit failed assignments. You may resubmit failed assignments only once. Internet students will receive notification when they have failed an assignment--they may then resubmit failed assignments on the web site. Internet students may view and print results for failed assignments from the web site. Students who submit by mail will receive a failing result letter and a new answer sheet for resubmission of each failed assignment. COMPLETION CONFIRMATION After successfully completing this course, you will receive a letter of completion. ERRATA Errata are used to correct minor errors or delete obsolete information in a course. Errata may also be used to provide instructions to the student. If a course has an errata, it will be included as the first page(s) after the front cover. Errata for all courses can be accessed and viewed/downloaded at: http://www.advancement.cnet.navy.mil STUDENT FEEDBACK QUESTIONS We value your suggestions, questions, and criticisms on our courses. If you would like to communicate with us regarding this course, we encourage you, if possible, to use e-mail. If you write or fax, please use a copy of the Student Comment form that follows this page.

For subject matter questions: E-mail: n313.products@cnet.navy.mil Phone: Comm: (850) 452-1001, Ext. 2167 DSN: 922-1001, Ext. 2167 FAX: (850) 452-1370 (Do not fax answer sheets.) Address: COMMANDING OFFICER NETPDTC N313 6490 SAUFLEY FIELD ROAD PENSACOLA FL 32509-5237 For enrollment, shipping, grading, or completion letter questions E-mail: fleetservices@cnet.navy.mil Phone: Toll Free: 877-264-8583 Comm: (850) 452-1511/1181/1859 DSN: 922-1511/1181/1859 FAX: (850) 452-1370 (Do not fax answer sheets.) Address: COMMANDING OFFICER NETPDTC N331 6490 SAUFLEY FIELD ROAD PENSACOLA FL 32559-5000 NAVAL RESERVE RETIREMENT CREDIT If you are a member of the Naval Reserve, you may earn retirement points for successfully completing this course, if authorized under current directives governing retirement of Naval Reserve personnel. For Naval Reserve retirement, this course is evaluated at 9 points. (Refer to Administrative Procedures for Naval Reservists on Inactive Duty, BUPERSINST 1001.39, for more information about retirement points.)

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Student Comments Course Title: Ship’s Serviceman 1 & C

NAVEDTRA: 14237 Date: We need some information about you: Rate/Rank and Name: SSN: Command/Unit Street Address: City: State/FPO: Zip Your comments, suggestions, etc.: Privacy Act Statement: Under authority of Title 5, USC 301, information regarding your military status is requested in processing your comments and in preparing a reply. This information will not be divulged without written authorization to anyone other than those within DOD for official use in determining performance. NETPDTC 1550/41 (Rev 4-00

CHAPTER 1

INTRODUCTION

This rate training manual is designed to enablethe SH2 and SH1 to meet the occupational stand-ards for advancement to First Class Ship’s Ser-viceman and Chief Ship’s Serviceman. Fordetailed information about military requirementsfor advancement, final multiples, and trainingsources and publications, consult Military Re-quirements for Petty Officer Third Class throughChief Petty Officer and Basic Mi l i taryRequirements.

This chapter provides information on the in-creased rewards and responsibilities of advance-ment and the different career opportunities thatare available to you. It is recommended that youstudy this chapter carefully before you begin tostudy the remainder of this rate training manual.

THE SHIP’S SERVICEMAN RATING

In the Navywide enlisted rating structure, ser-vice ratings are provided to meet the need fortechnical specialization in some ratings but notin others. The Ship’s Serviceman rating is ageneral rating, with areas of specialization iden-tified by Navy enlisted classification (NEC) codes.These specialties include Barber, Navy ExchangeManager, Afloat Sales and Service Specialist,Commissary Store Manager, Laundry/DryCleaning Specialist, and Navy Exchange/Com-missary Store Specialist. Refer to the current edi-tion of the Manual of Navy Enlisted Manpowerand Personnel Classifications and OccupationalStandards, section II, NAVPERS 18068, fordescriptions of the NEC codes applicable to theShip’s Serviceman rating.

Because of the nature of the Ship’s Servicemanrating, senior Ship’s Servicemen are assigned toa variety of activities. As a senior SH, you maybe assigned to a regular sea billet where you maybe placed in supervision over the ship’s retail andservice activities. Or, you may be assigned as asupervisor of civilian or military employees in aNavy exchange or commissary store. You may

also be eligible for training at an instructor school,after which you may be sent to instruct in the SHclass A school or in one of the SH class C schools.Or, you may be assigned as a recruit instructoror a company commander at one of the recruittraining commands.

Other duty assignments that may be availableto you include those in the Naval Education andTraining Program Development Center, Pen-sacola, Florida, where the Navywide advancementexaminations are prepared and scored and whererate training manuals, correspondence courses,and other training materials are developed andprepared,

In addition to the special skills and knowledgeyou should possess for the Ship’s Servicemanrating, you must also develop your ability as aleader. You will find that your responsibilities formilitary leadership are about the same as thoseof petty officers in other ratings, since every pettyofficer is a military person as well as a specialist.Your responsibilities for leadership in the supplydepartment are considerable, especially on smallships. The ship’s store records, for example, areall-important records and it is your responsibilityto see that they are accurately maintained. Onlypeople who are highly competent and have a deepsense of personal responsibility can developleadership qualities needed to do their jobs well.The ability to lead is most apparent in supervi-sion, although it manifests itself in more subtleways in everything you do. Certain practicaldetails that relate to your responsibilities forsupervision are discussed in chapter 3 of thismanual.

REWARDS AND RESPONSIBILITIESOF ADVANCEMENT

Advancement brings both increased rewardsand increased responsibilities. The time to startlooking ahead and considering the rewards andthe responsibilities of advancement is now. Yourresponsibilities will be many and varied. By this

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time, you are probably well aware of many of theadvantages—higher pay, greater prestige, moreinteresting and challenging work, and the satisfac-tion of getting ahead in your chosen field.

The Navy also benefits by your advancement.Highly trained personnel are essential to the func-tioning of the Navy. By each advancement youincrease your value to the Navy in two ways. First,you become more valuable as a specialist in yourown rating. And second, you become morevaluable as a person who can supervise, lead, andtrain others. The extent of your contribution tothe Navy depends upon your willingness andability to accept increasingly broader respon-sibilities as you advance. When you assumed theduties of an SH3, you began to accept a certainamount of responsibility and accountability forthe work of others. With each advancement, youaccept an increasing responsibility in military mat-ters and in matters relating to the occupationalrequirements of the Ship’s Serviceman rating.

As you advance to the senior petty officerlevel, your responsibilities up and down the chainof command will change. Both officers andenlisted personnel will expect you to translate thegeneral orders given by officers into detailed,practical on-the-job language that can beunderstood and followed even by relatively inex-perienced personnel. In dealing with inexperiencedpeople, it is up to you to see that they performtheir work properly. At the same time, you mustbe able to explain to officers any important needsor problems of the enlisted personnel. This meansyou must be able to communicate clearly andeffectively. Remember, the goal of all com-munication is understanding. To lead and super-vise effectively, you must be able to speak andwrite in such a way that others can understandexactly what you mean. Chapter 3 of this manualdiscusses some techniques to help you to com-municate clearly and effectively.

As a senior Ship’s Serviceman, you will alsohave regular and continuing responsibilities fortraining. Even if you are lucky enough to havea group of subordinates who are highly skilled andwell trained, you will find that some training willstill be necessary. Some of your best workers maybe transferred, and inexperienced or poorlytrained personnel may be assigned to you; or, aparticular job may call for skills that your per-sonnel do not have. In addition, you will beresponsible for training lower rated Ship’s Ser-vicemen for advancement, These and similarsituations will require you to become a trainingspecialist who can conduct various types of

formal and informal training programs for subor-dinate personnel.

As you advance to SH1 and then to SHC, youwill find that many of your plans and decisionsaffect a large number of people, some of whomare not even in the supply department. It becomesincreasing y important, therefore, to understandthe duties and responsibilities of personnel inother ratings. Petty officers in the Navy arespecialists in their own fields. Learn as much asyou can about the work of other ratings, and planyour own work so that it will fit in with the overallmission of the organization.

As a First Class Ship’s Serviceman and evenmore so as a Chief Ship’s Serviceman, you mustkeep yourself informed about all changes and newdevelopments that might affect your rating oryour work. Practically everything in the Navy—policies, procedures, equipment, publications,systems—is subject to change and development.Some changes will be called to your attention, butyou will have to look for others. Try to developa special kind of alertness for new information.Keep up to date on all available sources oftechnical information.

IMPORTANT SOURCES OFINFORMATION FOR THE SENIORSHIP’S SERVICEMAN

As a senior Ship’s Serviceman, you will beregularly consulted for up-to-date information onthe military requirements and occupationalqualifications of the Ship’s Serviceman rating.You will also have responsibilities for the technicalleadership that will be directly related to the dailywork of your organization. No single publicationcan give you all the information you will need.It is important for you to know whereto look fordetailed, authoritative, up-to-date information onall subjects related to the occupational standardsand naval requirements for advancement in theShip’s Serviceman rating and for the successfulperformance of Ship’s Serviceman work.

To prepare for your future responsibilities asa military leader and advisor of subordinate navalpersonnel, you should become thoroughlyfamiliar with the current military requirementspublications. Since references to these publicationsare made throughout this chapter, the publicationswill not be discussed at this time. As a conscien-tious Ship’s Serviceman who is preparing to ad-vance to the senior petty officer level, you shouldtake responsibility for acquiring these publicationsand for studying them carefully.

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By now you are probably aware that there areseveral publications that are directly concernedwith Ship’s Serviceman work. In fact, you mayeven be familiar with some of the basic publica-tions. For your convenience, the following sum-maries are provided on a few of the importantpublications with which you, as a senior Ship’sServiceman, may work:

Ship’s Store Afloat, NAVSUP Publication487—The procedures contained in this publica-tion establish policy for the operation andmanagement of a ship’s store afloat. The pro-cedures are designed to assist ship’s store person-nel in the proper performance of their assignedduties and to aid them in understanding andfulfilling their responsibilities.

Afloat Supply Procedures, N A V S U PPublication 485—This publication establishespolicies for the operation and management ofafloat supply departments and activities operatingunder afloat procedures. It is designed to assistsupply personnel in the proper performance oftheir assigned duties and to aid them in under-standing and performing their individual tasksassociated with afloat supply operations.

Navy Exchange Manual, NAVRESSO In-struction 4066.17—This publication containscomprehensive instructions for operating Navy ex-changes and is designed to standardize the ad-ministration, organization, and operation of allsuch exchanges.

Navy Customer Service Manual, NAVED-TRA 10119-B—This special publication isdesigned to provide the enlisted personnel whoman the contact points—e.g., Disbursing Clerks,Ship’s Servicemen, Commissarymen, Personnel-men—with information concerning the impor-tance and improvement of customer service. Thepublication has been developed to make youaware of the importance of proper attitudes andtheir effect on everyday performance; and itdemonstrates to you how worthwhile a continuingeffort to develop positive attitudes in interpersonalrelationships can be.

In addition to basic publications associatedwith Ship’s Serviceman work, rate trainingmanuals exist to provide you with detailed infor-mation on the Ship’s Serviceman rating and tohelp you meet the occupational standards for ad-vancement to SH1 and SHC.

Ship’s Serviceman 3 & 2, modules 1 and2—The modules of this rate training manual pro-vide detailed information to help Ship’s Service-men fulfill the overall requirements of the rating.Module 1 discusses the administration of theship’s store and operations in retail and serviceactivities. Module 2 covers various ship’s storeaccounting procedures and financial returns.Satisfactory completion of these training modulesis required for advancement to SH3 and SH2. Ifyou have already met this requirement by satisfac-torily completing an earlier edition of Ship’s Ser-viceman 3 &2, you should at least review the newmodules. Much of the information presented inthis edition of Ship’s Serviceman 1 & C is basedon the assumption that you are already familiarwith the contents of the Ship’s Serviceman 3 &2, modules 1 and 2.

Ship’s Serviceman 1 & C—The informa-tion in this rate training manual is designed to helpShip’s Servicemen meet the qualifications foradvancement to First Class Ship’s Serviceman andChief Ship’s Serviceman. Leadership and manage-ment responsibilities of the senior Ship’s Service-man are stressed.

THE SCOPE OF THIS RATETRAINING MANUAL

Before you study any book, it is a good ideafor you to understand the scope and purpose ofthe book. Here are some things you should knowabout this rate training manual.

This edition of Ship’s Serviceman 1 & Cis designed to help you meet the occupationalqualifications for advancement to First ClassShip’s Serviceman and Chief Ship’s Serviceman.The information presented in this manualdiscusses the organization of the Navy supplysystem; administration of retail and serviceoperations; procurement, receipt, expenditure,and documentation procedures; the auditingof returns; and the administration of commis-saries in terms of the management and leader-ship responsibilities of the senior Ship’sServiceman.

You must complete this rate trainingmanual satisfactorily before you can advance toSH1 or SHC, whether you are in the regular Navyor the Naval Reserve.

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This rate training manual is NOT designedto give you information on the military require-ments for advancement to PO1 or CPO. For thistype of information, you should consult MilitaryRequirements for Petty Officer Third Classthrough Chief Petty Officer and Basic MilitaryRequirements.

This manual is NOT designed to give youinformation that is related primarily to thequalifications for advancement to SH3 or SH2;however, many of those qualifications are re-viewed or examined from the supervisory level.For detailed information pertaining to advance-ment to SH3 and SH2, you should consult themilitary requirements manuals and Ship’s Ser-viceman 3 & 2, modules 1 and 2.

Although this manual is based upon infor-mation that is related to the qualifications foradvancement to SH1 and SHC, no trainingmanual can really take the place of actual on-the-job experience. This manual can help you under-stand some of the whys and wherefores, but youmust combine knowledge with practical ex-perience before you can develop the requiredskills. It is important for you to obtain the cur-rent Personnel Advancement Requirement (PAR)Program (NAVPERS 1414) applicable to theShip’s Serviceman rating. In studying for ad-vancement, you should use the PAR informationin conjunction with the material in this manual.

This rate training manual is NOTspecifically designed to provide you with a listingof all the required and recommended materialsand references that you should use to prepare foradvancement in the Ship’s Serviceman rating. Forthis important information, you should consultthe current edition of the Bibliography for Ad-vancement Study, NAVEDTRA 10052.

The occupational Ship’s Servicemanqualifications that were used as a guide in the

preparation of this manual were those issuedin the Manual of Navy Enlisted Manpower andPersonnel Classifications and OccupationalStandards, NAVPERS 18068E. Therefore,changes in the Ship’s Serviceman qualificationsoccurring after this change may not be re-flected in the information given in this manual.Your major purpose in studying this manual isto help you satisfy the qualifications for advance-ment to SH1 or SHC. However, it is also impor-tant that you obtain and become familiar with themost recent Ship’s Serviceman occupationalstandards.

You should always make it your responsibilityto see that you are using the latest edition of anypublication or directive from which you areseeking information. From time to time, mostpublications are subject to change or revision,sometimes at regular intervals, other times whenthe need arises. When you are consulting apublication that is kept current by changes, youshould make certain that you are using a copy inwhich all official changes have been made. If apublication is subject to revision, you shouldcheck to see if you are using the most recentrevision or edition. Official publications anddirectives carry identifying abbreviations,numbers, and, at times, letter designations thatgive the source of the document, its subjectmatter, and its edition. For example, the iden-tification code for this rate training manual isNAVEDTRA 10287-F. The letter F designates theedition and indicates that this manual replacesNAVEDTRA 10287-E. The code NAVEDTRA10287 indicates that this is a publication of NavalEducation and Training in the rate trainingmanual series. When publications and directivesare mentioned throughout this book, the final let-ter designations will generally not be given. Theseomissions are deliberate and have been made toaccommodate future revisions of referencedpublications.

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CHAPTER 2

NAVY SUPPLY SYSTEM

As a Ship’s Serviceman, you have beeninvolved with the daily operation of the retail andservice activities of an afloat supply department.You have performed duties as a laundryman,barber, tailor, ship’s store operator, bulkstoreroom custodian, or records keeper. Now, asyou prepare to advance to a senior petty officerrate and assume the added responsibilities of asupervisory position, you must be able toidentify your role in the supply department afloatand ashore as an integral part of the Navy supplysystem.

The varied supply demands of a missile shipin the South Pacific; a Navy radio station inCutler, Maine; the naval base in Guantanamo,Cuba; and the other worldwide elements of theoperating forces and shore establishments of theNavy require a procurement, storage, anddistribution system with a scope unequaled in thecommercial world. The term supply system isused to describe collectively the field activities ofthe Naval Supply Systems Command (NAVSUP)and the Defense Logistics Agency (DLA) whichprocure, hold, and issue materials to the operatingforces or to activities of the shore establishment.The supply system also extends into the operatingforces in the form of stores issue ships andtenders.

The mission of the integrated Navy/DLAsupply system is twofold. First and alwaysforemost, the supply system must provide respon-sive support to the operating forces. Second, thesystem must achieve optimum economy. Toaccomplish both of these goals, the Navy/DLAsupply system must obtain superior managementin all of its operations. In your role as a seniorShip’s Serviceman, you must provide the type ofmanagement that will contribute directly to thesuccess of the mission and the goals of theintegrated Navy/DLA supply system.

The Navy/DLA supply system became “in-tegrated” when the critically important supplyrequirements of the operating forces began toextend beyond the scope of a single organization.

In fact, the supply system has become integratedin two significant ways. First of all, the Navysupply system itself is integrated. Before WorldWar II, technical materials were controlled by thetechnical commands and were generally providedto the fleet on a direct turnover basis fromprivate industry. The enormous quantity oftechnical materials that the highly mobile navalforces required soon surpassed the ability of thatsystem to meet the demands. As a result, thesetechnical items had to be integrated into a supplysystem where they could be managed systemwide.Second, the supply system is an integration of theDLA system and the Navy system. The integra-tion of the two systems began when the DLAstarted placing selected items of material invarious naval supply centers, depots, shipyards,and air stations. The following sections of thischapter will describe how the general organiza-tion and functions of the DLA system and theNavy system work together.

DEFENSE LOGISTICS AGENCY

The Defense Logistics Agency was establishedto procure and manage certain common itemsfor all the military services. First, each servicedetermines its own gross requirements. Next, theDLA totals the requirements for all the militaryservices and procures the required materials ona wholesale basis from commercial sources.Finally, the DLA sells the procured materials tothe military services.

DEFENSE SUPPLY CENTERS

The DLA headquarters is located at CameronStation, Alexandria, Virginia. The headquartersorganization provides leadership and manage-ment over the operational functions that aredecentralized to the DLA field activities. The fieldactivities, which are referred to as defense supply

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centers (DSCs), procure and distribute materialsas follows:

Defense Personnel Support Center,Philadelphia, Pennsylvania—Controls sub-sistence, medical supplies, and clothing.

Defense Fuel Supply Center, Washington,D.C.—Controls bulk petroleum and petroleum-based chemicals.

Defense Electronics Supply Center,Dayton, Ohio—Controls electronic and electricalequipment and repair parts.

Defense Industrial Supply Center,Philadelphia, Pennsylvania—Controls industrial-type items, such as bearings, block and tackledevices, rigging and slings, and rope cable andfittings.

Defense Construction Supply Center,Columbus, Ohio—Controls structural materialand automotive and construction equipment,components, and repair parts.

Defense General Supply Center, Rich-mond, Virginia —Controls furniture, foodpreparation equipment, recreation and athleticequipment, packaged petroleum products, officesupplies, and cleaning supplies.

The basic function of each of the defensesupply centers is inventory management. Themajor areas of responsibility of the DSCs incarrying out that function are described below.

Supply Management

The defense supply centers are responsible forthe performance of supply management functions(depending on the specific assignment), such ascataloging, standardization, determination of netrequirements, procurement, inspection andquality control, storage, distribution, redistribu-tion, disposal, transportation arrangements,maintenance and manufacturing guidance, andmobilization planning.

Replenishment Requirements

It is the responsibility of each militaryservice to determine the kinds of supplies andequipment needed and the quantity required peroperating unit. The defense supply centers

compute the replenishment requirements on allthe items under DLA management. These com-putations take into account the experience of thecenter on each item and the program informationfurnished by each service.

Ownership and Distribution

The defense supply centers control thewholesale distribution of stock among the fourmilitary services. Generally, a defense supplycenter makes use of local military facilities thatare best suited for the center to meet the re-quirements of all the military services located inthe area the center serves. These facilities areoperated with administrative support furnishedby the service that owns the facility. When a centeris the principal user of the facility, however, andhas management jurisdiction, the center providesthe administrative support to the other tenants.The defense supply centers conduct their opera-tions basically within the United States (excludingAlaska and Hawaii). The centers arrange,however, for the shipment of their stock itemsfrom continental stock points to overseas pointsas designated by military departments.

All stocks, both operating and reserve, underthe control of a defense supply center, are ownedby the center and are financed by a separate fund,the Defense Stock Fund. When necessary, stocksare rotated to maintain their quality througharrangements agreed upon between the DLA andthe military department concerned. As long as thestock items remain under direct control andownership of a defense supply center, the stockis considered to be “wholesale” stock. Once thewholesale stock is distributed, however, themilitary service that receives the stock assumesownership and the stock becomes “retail” stock.

DLA DISTRIBUTION SYSTEM

While DLA material is under the inventorymanagement of the DSCs, the actual storage anddistribution are accomplished by the distributiondepots (DDs) and the specialized support depots(SSDs).

Distribution Depots

A distribution depot is simply a storage pointfor DLA material. Issue of material from thesedepots is centrally controlled by the cognizantDSC and is based on requisitions received andprocessed centrally by the DSC. Consequently, a

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DD cannot accept requisitions directly or issuestock without the prior authorization of the DSC.The principal DDs are located in Mechanicsburg,Pennsylvania; Memphis, Tennessee; Ogden,Utah; and Tracy, California.

Specialized Support Depots

Because of the large number of afloatcustomers, the DLA has established two SSDs toprovide direct support to the Navy. The two SSDsare the Navy supply centers at Norfolk andOakland. The SSDs, unlike the DDs, have theauthority to receive requisitions directly and tomake issues locally. The inventory held at eachdepot is, however, owned and managed centrallyby the cognizant DSC.

NAVY SUPPLY SYSTEM

As was mentioned at the beginning of thechapter, the Navy supply system is integrated withthe Defense Logistics Agency system. The mis-sion, organization, and functions of the com-ponents of the Navy system are described below.Like the DLA system, there are inventorymanagers (the inventory control points), adistribution system (NSCs, NSDs), and a centralheadquarters (NAVSUP). The following diagramis a comparison of the two systems:

NAVAL SUPPLY SYSTEMSCOMMAND

The Naval Supply Systems Command (NAV-SUP) supervises the provisioning, cataloging,inventory management, distribution, materials

handling, traffic management, transportation,packaging, preservation, receipt, storage, issue,and disposal of Navy supplies and material, ex-cept for those items specifically assigned to othersystems commands or offices. Although NAV-SUP relies heavily on the other systems commandsfor technical advice concerning equipment andmaterial requirements, it also furnishes supplymanagement methods and guidance to commandsand offices that request management assistancein supply functions.

NAVSUP is also responsible for the develop-ment and supervision of the Navy supply system.It must combine all supply and distribution func-tions into one system so that the system can meetthe objective of responsive and efficient materialsupport to the operating forces. This is not asimple task. The Navy supply system must beresponsive to all levels of command and mustoperate at all levels. It is not enough to developonly those capabilities that will enable a supplysystem to meet the needs of one ship, one taskforce, or one fleet. The Navy supply system mustbe able to respond to all the needs of the operatingforces and of their related support activities.

As you read the following sections, you shouldrecognize how many supply functions are inter-related so that the Navy supply system can sup-port your ship or any other component of theoperating forces. You should also determine howyour supply department, afloat or ashore, func-tions in much the same way in meeting the needsof a ship or a station. The basic elements of supplysupport, for one ship or for the entire Navy,involve the determination of requirements, pro-curement, and distribution.

Determination of Requirements

Determining requirements for material shouldnot be new to you as you have probably alreadyhad some experience in this area aboard your ship.In performing this job, you have had two excellenttools to work with—the Coordinated ShipboardAllowance List (COSAL) and the usage data fromyour stock record cards. The COSAL is discussedlater in this rate training manual and in MilitaryRequirements for Petty Officer Third Classthrough Chief Petty Officer. The Navy supplysystem uses the COSAL and stock record cardsfor determining the requirements for replenish-ment materials. However, not all material comesunder the heading of replenishment. When newmaterial, such as the repair parts requirementfor a newly developed item of equipment, is

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introduced, long-range plans must be developedfor the adequate support of the equipment.

There is another area that calls for the deter-mination of requirements. When the plans for anoperation have been approved, logistic planningmust provide the material needed to support theoperation. Elements such as the size and durationof the operation, its distance from establishedsupport activities, and the climate to be en-countered are all factors that you must considerin order to predict, with any accuracy, answersto the questions: What? How much? When?Where? and How?

Procurement of Materials

As soon as requirements have been estab-lished, the next step is the procurement ofmaterials. Most procurement aboard ship iscarried out by requisition. However, before asupply activity can issue the material on yourrequisition, the material must first be procuredand then delivered to the location of that supplyactivity. Although some items are manufacturedin Navy facilities (such as shipyards), the vastmajority of procured material is purchased fromcommercial suppliers. The impact of procurementby the Navy on the civilian economy ranges frominsignificant for the replacement stock ofshoelaces to staggering when procurement activityincludes all the material necessary to support anall-out wartime operation.

Procurement comprises such functions asestablishing specifications for the goods required,standardizing material, cataloging and identify-ing material, inspecting material, investigatingcosts, and assigning priorities. Procurement mayalso involve the allocation of critical raw materialto a supplying manufacturer.

Distribution of Stock

The first phase of distribution is the accumula-tion of material at CONUS bases, an action thatmay be performed more readily during the pro-curement process if the location to which thematerial is to be delivered is specified. The otherphases of distribution are storage, issue, transpor-tation, and control.

The distribution system must be capable ofreacting rapidly to unexpected changes in plansand operations. The system must also be able toadapt itself to changes brought about by newdevelopments in technical areas.

A distribution system should be as economicalas possible without sacrificing effectiveness. Agood distribution system can achieve considerableeconomy by maintaining careful control of itsstock. For example, material requirements at onelocation can occasionally be met by a redistribu-tion of excess material from another locationrather than by the procurement of new material.When equipments or systems are scheduled to bephased out, the reduced demand for materialsupport can be anticipated and overall stock levelscan be reduced accordingly. On the other hand,a good distribution system must be just as effec-tive in anticipating increases in existing supplyrequirements or additional procurement demandsas new equipments are introduced to the fleet.Under all conditions, an expedient distributionsystem must ensure that material support isavailable when and where it is needed.

INVENTORY CONTROLPOINTS (ICPs)

Managing the hundreds of thousands of dif-ferent items of stock in use by the Navy today isnot an easy job. To provide the proper balancebetween supply and demand, the Navy supplysystem has established inventory control points(ICPs). In fact, the Navy’s two inventory controlpoints have been described as the “nerve centers”of the Navy supply system. They are the

Navy Aviation S u p p l y O f f i c e ,Philadelphia, Pennsylvania (ASO); and

Navy Ships Parts Control Center,Mechanicsburg, Pennsylvania (SPCC).

Although they are not ICPc, three other ac-tivities have been assigned specific inventorymanagement responsibilities. They are the

Naval Publications and Forms Center,Philadelphia, Pennsylvania;

Navy Fuel Supply Office, Alexandria,Virginia; and

Navy Resale and Services Support Office,Staten Island, New York.

Each of these activities manages a material com-modity or group of commodities.

You can identify the inventory manager forany stock item by the cognizance symbol for that

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manager. For example, ship’s store stock is 1Qcog material that is under the inventory manage-ment of the Navy Resale and Services SupportOffice. You can find the current list of cognizancesymbols and their associated responsible inven-tory managers in the NAVSUP Manual, volumeII, and NAVSUP P-485.

Within the Navy supply system, the ICPs ad-minister the material assigned to them by thesystems command having prime responsibility forthe material. Thus, an ICP is under the joint con-trol of NAVSUP and the responsible systemscommand. The ICPs do not maintain stocks ofmaterial; the ICPs simply ensure that a properbalance exists between the supply of and thedemand for the individual items of materialrequired by the Navy. This mission requires eachICP to do the following:

Ensures that activities of the Navy willreceive promptly the appropriate quantities of allrequested materials

Ensures, by control of procurement, thatlong supply or short supply of material will becurtailed by maintaining a scheduled flow ofmaterial into the Navy supply system in theproper quantities

Directs redistribution or disposal of excessstock at supply activities for any material underits cognizance

Maintains close liaison with the systemscommands for the purpose of incorporatingchanges, new requirements, obsolescence, andother planning information into the inventorycontrol of its material

Determines or assists in determining itemsto be stocked

Participates in procurement actions fortechnical equipment and material, recommendsprocurement of repair parts and components, andschedules the delivery of these parts and com-ponents as designated by the sponsoring systemscommand or office

Participates in material standardizationprograms

Carries out intensive technical researchprograms so that all stock items under its con-trol are identified, stock numbered, cataloged,and evaluated for possible interchangeability

Establishes standard unit prices

Develops methods and procedures forrecording and reporting the stock status of thematerial under its inventory control

Consolidates and reviews the periodicstock status reports rendered by its reportingactivities

The material that is managed by the ICPs isheld in a distribution system composed of supplyactivities called stock points. To make the materialavailable in the right quantity at the right place,the ICPs must maintain close control over thedistribution system. To do this, the distributionsystem of the ICPs is tied together by a highlysophisticated communications network throughwhich the ICPs report daily on the status of thestock in their locations. This information enableseach ICP to position material as required and tocompute future procurement requirements for thematerial.

In summary, the stock management respon-sibilities of the ICPs within the Navy supplysystem are to position material at the various stockpoints; to retain inventory control of this materialthrough extensive reporting systems; to providetechnical assistance to the system (and to thecustomers); and to provide a cataloging serviceto the system (and to the customers).

NAVY RETAIL OFFICES

The inventory managers for Navy-owned retailstocks of items under DLA control are the Navyretail offices (NROs). The NROs manage Navy-owned material by financial means only. Materialis bought from the DSCs with Navy Stock Fundmoney and is subsequently positioned at Navystock points. The two Navy retail offices are the

Fuel Supply Office (FSO), Washington,D.C.—Responsible for the retail management ofsolid fuels, petroleum, and related products,asphalts, and coal tars; and

Fleet Material Support Office (FMSO),Mechanicsburg, Pennsylvania—Responsible forthe retail management of Navy retail stocks ofDLA/GSA items.

NAVY DISTRIBUTION SYSTEM

There are two types of activities that makeupthe Navy’s distribution system: (1) activities in

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which the primary mission is supply and (2) ac-tivities that are components of systems commandsother than NAVSUP or naval operationalactivities.

The major activities in which the primary mis-sion is supply are (1) naval supply centers and(2) naval supply depots. These activities areresponsible for warehousing, distributing, andcontrolling Navy supply materials. In addition tothese activities, the mobile logistics support force(MLSF) ships act as afloat extensions of theNavy’s distribution system.

The other activities are strictly supply depart-ments consisting of (1) naval shipyards, (2) navalair stations, and (3) naval stations. The missionof these activities is to provide specialized supplysupport to the command at which they arelocated.

Navy Supply Centers andNaval Supply Depots

Navy supply centers (NSCs) and depots(NSDs) are command organizations that havebeen established for the centralized administra-tion of various types of supply activities. Thesesupply centers and depots furnish balanced supplysupport to fleet units, shore activities, transientships, and overseas bases. The centers have, ascomponents, several depots that stock the variouscategories of materials. In addition, a supplycenter or depot may have certain other com-ponents that perform related supply functions.

Navy supply centers are based in CONUSwhile Navy supply depots are located overseas(with the exception of NSD, Mechanicsburg,Pennsylvania). Military command and coordina-tion control is exercised by the commandingofficer of the center or depot, but primarysupport responsibility of the centers and depotsis exercised by NAVSUP. The departments of anyNSC or NSD with which the senior Ship’sServiceman would most frequently come into con-tact are the inventory control department andmaterial department.

INVENTORY CONTROL DEPART-MENT.— The inventory control departmentdetermines material requirements, manages inven-tories of assigned material, controls materialreceipts, and, when a purchase department is notwarranted or approved by NAVSUP, conductsprocurement operations. Within the inventory

control department there are several divisionsthat perform the following functions:

Requirements division—Maintains levelsof activity stocks and stock records, providesstatus information, screens and analyzes supplydocuments, and performs other related functions.

Receipt control division—Monitors alldocumentation and procedures necessary for theprompt receipt of material.

Technical division—Maintains the librarythat is used to identify material.

Purchase division—Determines themethods for purchasing material and conductsnegotiations for the purchase of supplies andequipment.

Customer services division—Provides theliaison point for fleet and shore customers onmaterial and service requirements. The customerservices division is usually established when thevolume of fleet or shore customer services is toogreat for the requirements division to handlealone. Otherwise, customer service functions areperformed within the requirements division.

MATERIAL DEPARTMENT.— Thematerial department plans and directs the storage,maintenance, issue, and disposal of materials and,when a freight terminal department is not. war-ranted, plans and directs the receiving, shipping,and shipment control operations. Within thematerial department are several divisions that per-form the following functions:

Storage division—Determines and main-tains proper stowage conditions and locations formaterial.

Disposal division—Operates disposal,scrap, and salvage yards.

Packing and preservation division—Performs the packing and marking of material fordomestic or overseas shipment.

Cold storage division—When established,performs for subsistence materials the identicalfunctions assigned to the requirements and storagedivisions.

Retailready supply,

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stores division—Operatesand self-service stores.

shop,

NAVY RESALE SYSTEM Freight terminal division—Receives, ships.delivers, and controls the movement of allmaterial.

Labor and equipment division—Maintainsa residual labor and equipment pool.

Mobile Logistics Support Force

The purpose of the MLSF is to keep the fleetsupplied with fuel, food, general stores, technicalrepair parts, and services. These materials andservices are made available through underwayreplenishment (UNREP) or in-port replenishment(INREP) in foreign harbors. Through the use ofthe MLSF, the fleet can remain at sea for pro-tracted periods of time.

Some of the ships that makeup the MLSF areas follows:

Combat stores ships (AFS)—Carry a“load” of general stores, ship’s repair parts, elec-tronic repair parts, aviation repair parts, fooditems, and ship’s store stock. The shopping guidesfor the AFS are the Afloat Shopping Guide (ASG)and Consolidated Afloat Requisitioning GuideOverseas (CARGO).

Stores ships (AF)—Carry a wide variety offrozen and dry foods items and certain items ofgeneral stores and ship’s store stock.

Oilers (AO)—Carry bulk fuels, a deckloadof bottled gas and drummed oil, and some itemsof general stores and ship’s store stock.

Ammunition ships (AE)—Carry explosivesand hazardous ammunition and related materials.

Fast combat support ships (AOE)—Ahigh-speed combination of the AE and AO.

Destroyer/submarine tenders (AD/AS)—Belong to type commanders and carry a range ofrepair parts and consumables to support a specificship type.

These ships act as extensions of the supplysystem and are actually specialized afloat supplydepots. The stores issue ships conduct businessat sea by highline or helicopter transfer, or inforeign ports. These transfers are known as under-way replenishment (UNREP), vertical replenish-ment (VERTREP), or in-port replenishment(INREP).

The overall purpose of the Navy ResaleSystem is to provide authorized patrons withquality merchandise and services at reasonableprices. By offering attractive, convenient, well-managed facilities, the Navy Resale System con-tributes to the morale of the men and women inthe naval service. The Resale System consists offour separate programs: Navy exchanges, com-missary stores, ship’s stores afloat, and MilitarySealift Command (MSC) exchanges. All of theseprograms are managed by the Navy Resale andServices Support Office (NAVRESSO) which wascreated by the Naval Supply Systems Commandas a field activity.

NAVY RESALE AND SERVICESSUPPORT OFFICE (NAVRESSO)

The Navy Resale and Services Support Officewatches over the effectiveness of the Navy Resaleand Services Support System and acts as a cen-tral manager for the system’s individual programs.

As the Navy’s Resale System’s centralmanagement activity, NAVRESSO’s mission isdefined as follows:

To provide support for resale services,clothing, and food services, afloat and ashore

To conduct clothing and textile researchand development

To perform such other functions as maybe directed by the Commander, Naval SupplySystems Command

According to the goals of the Navy ResaleSystem, the Navy Resale and Services SupportOffice directs, operates, and provides manage-ment, administrative, and technical guidance toNavy Resale and Services Support regions andcommissary stores, Navy and Military SealiftCommand exchanges, Navy ship’s stores andship’s stores activities afloat, and enlisted diningfacilities afloat and ashore. NAVRESSO alsodevelops and monitors procedures for maintainingofficers’ messes afloat and provides technical andmanagement guidance to the naval uniform pro-gram. NAVRESSO commands the Navy Clothingand Textile Research Facility (NCTRF) whichconducts clothing and textile research anddevelopment. NAVRESSO also directs the Navy

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Food Service Systems Office (NAVFSSO) whichprovides policy and administrative and technicalguidance in food and foodservice research anddevelopment.

In managing all the programs under its con-trol, NAVRESSO is subject to the guidelines setforth in the Armed Services Exchange Regula-tions, the Armed Services Commissary StoreRegulations, the Naval Supply Systems CommandManual, and other applicable official publica-tions.

SHIP’S STORES DIVISION

Of the many divisions in NAVRESSO, asenior Ship’s Serviceman in the fleet will have themost contact with the ship’s stores division (SSD).The primary purpose of the ship’s store divisionis to furnish technical direction and guidance forthe operation and design of a Navy’s ship’s storeand to assist type commanders in managing ship’sstore facilities.

Functions

The functions of the ship’s stores division areas follows:

To provide guidance to NAVSUP andindividual fleet units for the design of ship’sservices spaces and equipment aboard Navy shipsscheduled for new construction, conversion, andmajor modernizations as well as for those vesselsscheduled for SHIPALTs

To determine, issue, and review policies,procedures, and goals for retailing goods andservices aboard ships of the U.S. Navy

To develop ship’s stores contracts,merchandise offerings, and procurement resourcesin coordination with the acquisition managementdivision (AMD), the retail management division(RMD), and the services management division(SMD)

To provide technical guidance andassistance for laundry/dry cleaning, vending, andrelated services aboard ships of the U.S. Navy

To administer Ship’s Store Profits, Navy,General Fund, and the ship’s stores participationin (and/or responsibility for) the Navy Stock Fund

To develop program data to ensure logisticsupport of programs under the direction ofNAVRESSO

To maintain up-to-date fleet load lists forship’s stores in the Consolidated Afloat Requisi-tioning Guide Overseas (CARGO)

Branches

There are three branches of the SSD that you,as a senior Ship’s Serviceman, should recognize:the operations branch (SSD1 ), the fleet assistancebranch (SSD2), and the fleet habitabilityassistance branch (SSD3). You should makeyourself aware of these branches and their func-tions. As a senior petty officer, you may wish torely upon some of the services these SSD branchesprovide.

The operations branch (SSD1) providesguidance in the design of ship’s store spaces andequipment. This branch also conducts studies andsurveys to establish operational policies and pro-cedures, develops management and operationalstandards and goals, and provides the results ofall findings to fleet and type commanders. Inconjunction with the acquisition managementdivision (AMD), the retail management division(RMD), and the services management division(SMD), the operations branch develops ship’sstores contracts and merchandise offerings.

Another function of the operations branch isthe administration of Ship’s Store Profits, Navy,General Fund. This branch carries out this func-tion by providing the following services:

Publishes guidelines for Ship’s StoreProfits, Navy, General Fund, expenditure authori-zations (loans, grants, surveys, travel, andmiscellaneous charges)

Authorizes, adjusts, or cancels com-mitments and expenditures from Ship’s Store Pro-fits, Navy, General Fund, with copies to pertinentparties

Prepares the annual budget

Forwards copies of all need-to-know cor-respondence and travel orders to interesteddivisions

Maintains a commitment file for loans andgrants

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The operations branch also administers theship’s stores participation in (and responsibilityfor) the Navy Stock Fund in the following ways:

Issues policies and procedures (notices,instructions, NAVSUP Publication 487, etc.)

Provides input to the financial manage-ment group (FMG) for budgetary functions

Monitors financial operating results andprovides comments

You, as a senior Ship’s Serviceman, may findthe fleet assistance branch (SSD2) to be one ofthe most valuable resources available to youwithin the ship’s store division. For example, youmay find yourself in charge of a retail operationthat is not as efficient as you feel it could be. Yourealize that the operation needs some type of im-provement, but you do not know where to startor what to do. The fleet assistance branch willanalyze your operation and will provide thefollowing services:

Fleet assistance including technicalguidance and training in all phases of retail,operating, and accounting procedures and servicesfor ship’s stores

Fleet assistance including technicalguidance and training in service activities such aslaundry/dry cleaning and vending services inship’s stores

Recommendations for changes to ship’sstores policies and operating procedures

The fleet habitability assistance branch (SSD3)provides guidelines on habitability standards inthe design and improvement of ship’s store spaces.The functions of this branch are as follows:

To determine, under OPNAVINST 9640.1requirements, the required space and equipmentneeded for ship’s stores retail and service activitiesin regard to habitability standards for new shipdesigns

To assist NAVRESSO in making recom-mendations to the OPNAV shipboard habitabilitymanager on ship’s stores retail and serviceactivities

To assist ships in determining maximumimprovement of shipboard habitability in regardto ship’s stores retail and service activities, withinthe constraints imposed by physical configurationand other competing requirements of the ship’sresources

HOW NAVRESSO ASSISTS SHIP’SSTORES AFLOAT

There is a ship’s store on practically everysurface ship. As mentioned before, NAVRESSOhas a fleet assistance program to provide technicalassistance and guidance to ensure the efficient andeconomical achievement of all ship’s storesoperations.

Fleet assistance teams are made up of fleetassistance representatives. These representativesare master and senior chief petty officers who arepositioned in major port areas to provide technicaland management assistance to ship’s stores.Technical assistance may be provided bytelephone, by desk visits to fleet assistance offices,or by advisory visits to individual ships. Visits toships are made on an informal basis, and noformal report is made upon completion of thevisit.

Assistance is provided upon request for anyof the following areas:

Modernization planning, merchandisingpromotion assistance including layout, display,and signing

Merchandise planning, including stockcontrol review, model stock plans, and disposi-tion of excess stocks

Pricing procedures, accounting records,returns, and bill payments

Internal operating procedures includinginternal controls consisting of cash-handling pro-cedures, security of spaces, and receipt and in-spection procedures

Procurement assistance, including pur-chasing procedures, contract administrationprocedures, vendor relations, and merchandisequality assurance, and the processing of forms formerchandise ordered according to the simplifiedrequisition and purchase procedure

Training in ship’s stores afloat operationsin retail and service areas

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Periodic review of ship’s stores operationsto provide an overview or to identify potentialproblem areas

Work scheduling and control, job instruc-tion and training programs, safety and sanitation,equipment maintenance, minor repairs (asnecessary), and operations

In addition, the fleet assistance representativesmaintain liaisons with fleet and type commanders,Navy supply support activities, fleet accountingand disbursing centers, and other cognizantactivities on various ship’s stores problems.

Approximately 120 days before deployment,you should set up a predeployment briefing withthe fleet assistance representatives either at theiroffice or on your ship. During this briefing youwill receive information on CARGO cognizanceitems, foreign merchandise, vendor control, andendurance loading.

The addresses and phone numbers of fleetassistance offices are listed in the NAVSUP P-487.

NAVY ACCOUNTING ANDFINANCE

There are three types of accounting andfinance activities with which you, as a seniorShip’s Serviceman, should be familiar: the Navyregional finance centers, the fleet accounting anddisbursing centers, and the personnel supportactivity detachments. The mission and relation-ship of these finance activitiessupply system and to you, theServiceman, are discussed below.

NAVY REGIONAL FINANCECENTERS

Navy regional finance centers

to the Navysenior Ship’s

(NRFCs) arefield finance activities under the command andprimary support of the Deputy Comptroller of theNavy. Each NRFC is headed by a commandingofficer who is a Supply Corps officer. The navyregional finance centers are located in GreatLakes, Illinois, and in Washington, D.C.

The mission of an NRFC is to performregional disbursing, accounting, reporting,administrative examinations, and other relatedfinancial service functions for the geographicalarea it supports as assigned by NAVCOMPT.

The senior Ship’s Serviceman becomes in-volved with an NRFC primarily when there are

charges to a Ship’s Store Profits, Navy (SSPN)functional account. The Navy Regional FinanceCenter, Washington, D. C., will take care of someof your SSPN bills associated with vendingmachines (CONUS).

FLEET ACCOUNTING ANDDISBURSING CENTERS

Fleet accounting and disbursing centers(FAADCs) are field finance centers under thecommand and primary support of the DeputyComptroller of the Navy. There are two fleetaccounting and disbursing centers: one is in SanDiego, California; the other is in Norfolk,Virginia.

One of the FAADC’s functions is to reviewand process ship’s store returns. The Ship’sServiceman becomes involved with the FAADCwhen the 4-month ship’s store returns areprepared and forwarded to that activity. If errorsare discovered in the 4-month returns, a letter isforwarded to the command requesting adjustmentor explanation. Dealers’ bills for ship’s store stockare forwarded to an FAADC for payment. TheFMDC will reconcile the amount of the bill pro-vided by the dealer with the amount reported bythe activity. If discrepancies are discovered, aletter requesting adjustment or correction isforwarded to the commanding officer of theactivity.

PERSONNEL SUPPORTACTIVITY DETACHMENTS

Personnel support activity detachments arepaying activities that are primarily used for thepayment of dealers’ bills. The senior Ship’sServiceman becomes involved with these payingactivities when dealers’ bills are forwarded to theactivities for payment. Personnel support activitydetachments are located around the world inlocalities such as Yokosuka, Japan; Naples, Italy;Rota, Spain; and Oakland, California.

At some point in your career, you have prob-ably heard of or dealt with many of the organiza-tions and branches you have just read about inthis chapter. In fact, as you have encounteredreceipts from some of these places or orderedmaterials from others, you have probablywondered why a supply system should be so com-plicated and elaborate. Now that you have read

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the information in this chapter, you should be able be able to identify your role in the Navy/DLAto visualize how the various levels of the system supply system and how the system helps you, thework together to provide an effective supply senior Ship’s Serviceman, provide the best possi-network, not only for the Navy, but for all the ble service to the afloat or ashore operation underbranches of the armed forces. You should also your control.

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CHAPTER 3

MANAGEMENT

Until now, you have probably been a specialistin the ship’s store or in one of the service activities.But as you advance, your duties will take youinto the broader fields of management. By thetime you make chief, you should be qualified tomanage an entire resale activity. You may findyourself serving afloat on a large ship with twoor more retail stores and a complete range ofservice activities to manage, or you may beassigned to a small ship with only one retail storeand one or two service activities. You may alsobe assigned to shore duty in a Navy exchange orin a commissary store.

If you are serving aboard ship, you will mostlikely supervise all the ship’s store operations. Thischapter is primarily applicable to the afloat situa-tion. However, many of the principles discussedin this chapter will be valuable to you even if youare assigned to shore duty where you may manageonly one or two phases of an operation. For ex-ample, you may be assigned to manage the salesfloor or supervise certain office operations of aNavy exchange. You may also be placed in chargeof a warehouse or one of the service activities.Shore duty billets are similar in many respects tothose performed afloat, but you will find certaindifferences. You will read about some of themanagement responsibility differences in chapter8 of this manual.

The role of a retail store and/or serviceactivity manager involves many important dutiesand responsibilities for the senior Ship’sServiceman. You will be expected to assist theship’s store (sales) officer in making certain yourretail store or service activity provides the bestpossible level of customer service with theresources available to you. To provide the bestpossible service in any organization, you must bean effective manager.

Effective management involves organizationplanning. You should have a clear understandingof the functions that must be performed, and youmust analyze these functions to see what tasksthey require. Then, you must assign the tasks to

the personnel you have available to perform them.You must also be able to plan a physical layoutthat will meet the needs of your activity and thatwill allow your personnel to carry on their workefficiently. You should be able to establish orderlymethods for your personnel to perform theirtasks. Also, you should try to arrange the tasksin a logical sequence so that there is an efficientflow of work. In your ship’s store and serviceactivities, you should be able to analyze variouswork situation factors and to prepare an effec-tive work schedule. In addition, you must under-stand certain principles of personnel management.These principles will help you to obtain the max-imum use of manpower in the assignment of workto your personnel. They will also provide you withguidelines for delegating authority effectively,determining training program requirements, andsupervising the work of your subordinates.

As a senior Ship’s Serviceman, you may beexpected to coordinate various administrativefunctions. Administrative responsibilities involvethe initiating of correspondence and supervisingthe maintenance of files, records, and officialpublications and directives. You may even becalled upon to assist in the preparation of variousprocedural instructions for the Supply Depart-ment Organization Manual. Finally, you must beable to observe and analyze the retail and serviceoperations in detail so that you can spot problemareas that need your attention. Good managementwill help you to make certain your ship’s storeand service activities are providing the bestpossible service to your ship.

SHIP’S SERVICE ORGANIZATION

The basic organization and functions of aship’s service (sales) division are generally fairlystandard. However, creating an effective organi-zation does not stop here. You may have to takesteps to adjust an existing organizational struc-ture so that it will better serve the operational

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requirements of your particular ship’s serviceoffice or activity. You should carefully examinethe relationships that exist among the functions,the physical environment, and the personnelassociated with your own ship’s service orsales operation. Can you rearrange any of theseelements to make your operation more efficient?What sort of limitations are you absolutely stuckwith? (Can you work around them?) Wheneveryou are adapting an existing organizational struc-ture to fit the special needs of your ship’s serviceor sales operation, you should keep in mind thatplanning is always the key to good organization.

ORGANIZATION PLANNING

Organization planning is a process of identify-ing and grouping duties to be performed, definingand delegating authority, assigning respon-sibilities, and creating relationships that enableyour personnel to work together effectively to dothe best possible job for your ship. In goodorganization planning, two major factors of yourorganization are involved: (1) the mechanicalaspects and (2) the dynamic aspects. You, as amanager, must consider them both.

Mechanical Aspects

The mechanical aspects of organizationplanning deal exclusively with your organization’sstructure. They are the more or less “static”aspects of your organization which you canimmediately identify and put down on paper.First, determine what functions and tasks youneed to have performed. Now, arrange these func-tions and tasks in groups of responsibilities thatyou can assign to different individuals. Now youcan design an organization chart that will showa logical arrangement of all of your groups. Younow have a “picture” of all the mechanicalaspects of your organization for which you areresponsible.

Dynamic Aspects

The dynamic aspects of organization planningare those that deal with human relations. Theyare those aspects that give consideration to in-dividual personalities, abilities, and interests sothat the organization allows personnel to worktogether effectively and harmoniously. You cantailor human relations to your organizationalneeds by applying leadership and personnelmanagement principles. For an in-depth study

of these dynamic aspects, read Human Behavior,NAVEDTRA 10058-C.

PRINCIPLES OF ORGANIZATION

The mission assigned to an activity determinesthe functions and tasks to be performed. Inplanning your organization’s structure, youshould keep these principles in mind:

Missions, functions, and tasks should beclearly stated and understood by those responsiblefor fulfilling them.

The organizational structure shouldbe as simple as possible and the number oforganizational components should be kept to aminimum.

No organizational component should beset up unless it has a distinct job to perform.

The organizational structure should beflexible enough to meet new and changingconditions.

The following sections briefly discuss sometechniques that you can use to prepare variousorganization charts and to determine the assign-ment of functions and tasks. We will deal withthe principles of personnel management andleadership later in the chapter.

ORGANIZATION CHARTS

There are three basic types of organizationcharts: structural, functional, and billet assign-ment or position. The main purpose of preparingorganization charts is to use them as managementtools. Some of the uses of these tools are asfollows:

To provide a clear picture of what anorganization is doing

To portray lines of authority, respon-sibility, and communication

To indoctrinate and train newly assignedpersonnel

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To provide a basis for planning futuredevelopment, expansion, or reorganization

To discover organization flaws such asconfused lines of authority or duplicationof functions

Structural Chart

The structural chart should reflect the basicorganizational components. You should keep thefollowing points in mind in deciding how to ar-range the chart:

Simplicity. Arrange the major componentsalong the same horizontal plane and arrange thesubsidiary components in a vertical plane beneaththe major components.

Clarity. The lines of authority thatyou draw between the components shouldclearly indicate relationships. Avoid diagonallines or crossing of lines of authority.

Symmetry. Boxes for each level ofcomponents should be the same size andthe overall chart should present a balancedappearance.

Unity. No branch, section, or unit can existby itself—it must be related to some other uniteither by a connecting line of authority or throughother components.

Figure 3-1 illustrates a completed struc-tural organization chart for the ship’s store(S-3) division on a destroyer tender (AD).

Functional Chart

The functional organization chart (orsimply the functional chart) should reflectthe same arrangement of the components asthat shown on the structural chart. However,for a large complex activity, you can prepareone chart showing the major components andtheir major functions and then prepare sub-sidiary charts for each major component in-cluding its subsidiary components and theirfunctions.

One of the principles governing the assignmentof functions is homogeneity of assignment. Thismeans that the functions of an organizationshould be grouped by similarity. Some specific

Figure 3-1.—Structural organization chart for a ship’s store division of an AD.

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considerations you should keep in mind are asfollows:

Each significant function must be pro-vided for within the organization.

Each function should be assigned to aspecific organizational component.

Closely related or similar functions shouldbe assigned to a single component.

There should be no overlapping, duplica-tion, or conflict of functions among thecomponents.

Functions should be assigned so as tominimize cross relations among components.

Figure 3-2 shows a completed functional chartwhich is a companion to the structural chartshown in figure 3-1.

Figure 3-2.—Functional organization chart for a ship’s store division of an AD.

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Billet Assignment Chart

The billet assignment chart (or position chart)is used either to show assignments of personnelby name, title, and rank or grade within billetrequirements within each organizational compo-nent of an existing organization, or to show billetrequirements by title and rank or grade for aplanned organization. However, for organizationmanuals, personnel listings are usually used in-stead of charts and may consist of already com-piled listings such as manpower authorizations.

Combination Chart

When an organization is fairly simple, a com-bination chart can be used to depict all threeorganizational aspects. For example, figure 3-3shows a combination chart for a ship’s store divi-sion of a destroyer (DD). Notice that this chartdisplays all the organizational components, thefunctions of each component, and the names ofpersonnel assigned to each component.

PLANNING A PHYSICAL LAYOUT

Now that you have the ship’s store divisionorganized on paper, consideration must be givento arranging the physical layout of your

workspaces. Attention should be given to suchthings as mission, work flow, and use ofpersonnel.

DESIGNING A LAYOUTANALYSIS CHART

Layout analysis is a procedure designed forbetter use of space, personnel, and equipment. Itinvolves the study of the physical facilities in awork area for the purpose of improving the workflow and working conditions.

A layout chart is the principal tool for this typeof analysis. The chart consists of a floor plan ofthe workspace, usually drawn to a scale of 1/4inch to 1 foot. Features that restrict usable spacesuch as doors, windows, electrical outlets, stan-chions, and radiators are then located on the chartand identified. Next, templates of the movableequipment, drawn to the same scale as the layoutchart, are placed on the chart in their presentarrangement. The templates can be fashionedfrom pieces of cardboard or plastic. Work flowcan be identified by arrowed lines for indicatingdirection. After you have carefully analyzed thelayout chart, you can rearrange the templates totest new layouts and work flows. See the “before”and “af ter ” layout charts for a laundry

Figure 3-3.—Combination chart for a ship’s store division of a DD.

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operation in figure 3-4. (Note that obsolete equip-ment has been removed in the “after” layoutchart.)

USING LAYOUT ANALYSISCHARTS

Using the layout chart, you can apply layoutanalysis to any given service or retail activity. Asexamples, the planning for service activities anda self-service retail activity afloat will be dis-cussed here.

Layout of Service Activities

Although layouts for service activities shouldbe consistent with the broad principles of layoutanalysis, each service activity has its ownpeculiarities which you must take into account.Besides the nature and amount of equipment, youmust consider the number of people who willbe working in the shop, the volume of businessyou expect, and the amount of space that youwill require for storing incoming and outgoingwork.

Where there is a series of operations to be per-formed, the relative position of the various piecesof equipment will have an important bearing onthe efficiency of your operation. Not only shouldthe equipment be accessible, it should also bearranged to save wasted motion and to reducewalking distance. Remember, a convenient ar-rangement will enable your people to turn outmore work in a shorter time. People usuallyproduce more when their equipment is close athand.

But a good layout goes further than that. In-dividuals have learned through experience thatoperations should be planned to follow oneanother in a logical sequence through the shop.In the case of laundries, for example, spacedevoted to the area where the laundry comes inshould be close to the area where it is marked,identified, and classified. The storage bins shouldalso be located near the receiving and processingarea. Tumblers should be located close to theassembly and flatwork section. This principleapplies to all service activities. Work, whether inthe tailor shop, the laundry, or the dry-cleaningplant, must move smoothly from the time it comesin as a service request until it is picked up by thecustomer as a completed job.

Layout of a RetailSeIf-Service Activity

The first consideration in installing a self-service operation is a preconceived, well-thought-out plan. To plan an efficient and attractive layoutfor a retail service activity, you must keep threeobjectives in mind:

1. Proper and intelligent circulation ofcustomer traffic throughout the entire store.

2. Traffic-stopping, appealing displays ofconveniently placed merchandise, that will resultin sales. (Merchandise that is seen and handledis half sold.)

3. Strategically placed equipment to performa twofold function:

a. To lead the customer, after the selectionhas been made, through a convenient, rapid,efficient checkout procedure; and

b. To provide adequate store protectionfrom pilferage. All equipment should be placedto focus exits through one narrow point; thus,adequate security is provided.

You must carefully consider the entire physicalarrangement of the sales area including doors,windows, posts, and other abutments. The objec-tive is to lay out the equipment so that thecustomer will be induced to circulate around theentire store before arriving at the check-out stand.Aisle space may vary from 4 to 6 feet dependingon the confinements oft he room. Six-foot aislesshould be used when you have the space available.When you are confined to a smaller space, yourheavy traffic or main aisles should be 6 feet wide,with side aisles narrower, to provide for an easierflow of traffic.

PLANNING WORK FLOW

As a manager, you must be able to analyzethe work flow of an office or retail operation andto develop alternative flow process plans. Flowprocess analysis is a technique by which you cananalyze the flow and sequence of your operations.It involves the charting of the steps that must beperformed to complete an operation under pres-ent methods, analyzing the chart to determinewhat improvements can be made, and thencharting a new sequence of steps under proposedmethods you have developed from the analysis.

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Figure 3-4.—“Before” and “after” layout charts for a laundry operation.

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PREPARING A FLOWPROCESS CHART

A flow process chart, either a Single-ColumnFlow Process Chart, NAVPERS 594, or a localform, can help you to analyze your work flow.You can prepare a flow process chart for any pro-cess, person, or material you wish to analyze.The heading of the chart indicates what aspectof the operation you are analyzing and wherethe process begins and ends. You should thenlist the steps that are involved in the pro-cess in the sequence in which the steps occurunder your present method. (Figure 3-5 illustratesa method that is currently being used forhandling the breakout of a ship’s store stock.)Next, you should draw a line to connect thesymbols that identify what each step involves.The five symbols are explained in the followingparagraphs.

Operation—An operation rep-resents a main step in theprocess and takes place whensomething is being created,changed, added to, or pre-pared for another step. An

operation also occurs when informationis given or received. Some examples of anoperation are the preparation of a breakoutdocument (NAVSUP 973), receipt of ship’sstore stock into the bulk storeroom, or thesale of an item of merchandise in the ship’sstore.

Transportation—Transporta-tion is an auxiliary step thatoccurs when something ismoved from one place toanother, except when suchmovement is part of an opera-

tion or inspection. Some examples of transporta-tion are a document that is being carried toanother location or a person who is moving toanother area of the ship.

Inspection—An inspection isan auxiliary step that occurswhen items are checked,verified, reviewed, or ex-amined for quality or quantity.However, the items inspected

are not changed at this point. Some examplesof inspection are proofreading a letter, checkinga breakout document for proper signatures,

or verifying that a customer’s change iscorrect.

Delay—A delay is an auxiliarystep that occurs when condi-tions do not permit or requirean immediate performance ofthe next step. Some examplesof a delay are a document

that is waiting for a signature and a customerwho is waiting in line at the ship’s store.

Storage—Storage occurs whensomething remains in oneplace and is not being workedon in a regular process, oris awaiting further action ata later date. Some examples

of storage are a document that is held ina file for later forwarding with returns andship’s store stock that is stowed in a store-room.

USING FLOW PROCESS CHARTS

In analyzing a flow process chart, you candetermine the actions you must take to improvethe sequence of any operation by asking yourselfWho?, What?, When?, Where?, Why?, andHow? You should make notes relating to thesequestions on the chart that represents your pres-ent method of work flow (fig. 3-5). You will usethese notes for the development of a revised chartthat will represent a proposed method of workflow. Figure 3-6 shows a revised chart that hasbeen developed from the present method chartshown in figure 3-5. You can apply flow processcharting effectively to solve procedural problemscreated by changes in your personnel, yourorganization, or your volume of work; to reviewyour operating methods periodically; and toestablish new organizations.

A resale operation, such as the prepara-tion and processing of a breakout document,the movement of merchandise during receipt,or a cash-handling procedure are all workflow situations that you can analyze by usinga flow process chart. Even if you decideagainst using an actual chart, you can stillimprove the sequence of operations in anywork flow situation by asking yourself thequestions: Who?, What?, Where?, When?,Why?, and How?

An office operation can be analyzed in asimilar manner. To discover any possible delays

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Figure 3-5.—Flow process chart showing present method.

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Figure 3-6.—Flow process chart showing proposed revised method.

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in document flow, for example, you couldexamine the preparation and processing of a pro-curement document.

ESTABLISHING WORK SCHEDULES

In addition to analyzing and recommendingchanges in work flow, your duties will probablyinclude the establishing of a work schedule fora service operation. What factors should you usein preparing this schedule? For example, some ofthe factors that you must consider in a laundryoperation are as follows:

1. Amount of work that must be processedweekly

2. Capacity of your laundry equipmenta. Washer-extractorsb. Tumbler dryersc. Flatwork ironerd. Laundry presses

3. Number and competence of your laundrycrew

Let’s now consider these factors and find outwhy each of them has a bearing on your laundryschedule.

AMOUNT OF WORK PROCESSEDWEEKLY

Your ship’s laundry facilities should beadequate to process 24 pounds of laundry peraccommodation per week. If your ship is a sur-face ship with more than 100 accommodations(crew plus troops), then your ship should beprovided with laundry facilities that are capableof meeting the following minimum requirementswithin a 96-hour laundry operations week:

1. Provide one change of work clothing,underwear, socks and one towel per day peraccommodation.

2. Provide one change of berth linen peraccommodation and one change of officer andCPO dining facility linen per week.

3. Finish press three uniform shirts andtrousers per officer and CPO/SNCO (E7-E9)accommodation per week.

4. Finish press one dress uniform shirt andtrouser per accommodation per crew (plus troops)per week.

To get a rough idea of how much work yourlaundry may be required to process weekly, youshould obtain the total number of your ship’s crewand multiply that number by 24 (the average

number of pounds of laundry that may be ex-pected to be processed weekly for each memberof a crew). For example, if your ship has a3,000-member officer and enlisted crew assignedfor duty, your laundry workload for each weekwould be approximately 72,000 pounds (3,000x 24). You can anticipate that approximately 80%of your workload will require tumble drying,approximately 2% will require flatwork ironing,and around 18% will require pressing.

CAPACITY OF LAUNDRYEQUIPMENT

The capacity of your equipment determineshow much tumbled work, flatwork, and presswork your laundry operation can handle in 1 day.The capacity of your equipment depends not onlyon the rated capacity but also on the efficiencyand size of your laundry crew as you will learnnext. For example, if you have six centers for pro-duction and ony four people to operate thesecenters, then you will have two units that will beidle at any given time.

SIZE AND COMPETENCE OFTHE LAUNDRY CREW

Laundering is one of the shipboard jobs thatmust be done whether you have sufficient person-nel or not, For the most part, your problem willbe one of scheduling. You need to make the bestuse of your available personnel, and you shouldtry to spread the workload as fairly as possible.Keep in mind that all operations should beSUPERVISED BY TRAINED PERSONNEL,however, your trained personnel need not PER-FORM all the tasks.

BEST TYPE OF LAUNDRYSCHEDULE

The best type of laundry schedule is the onethat best fulfills the laundry requirements of yourship. Daily schedules have been successfully usedby some ship’s laundries; that is, a portion of thelaundry from each division is delivered to thelaundry each day for processing instead of onceor twice per week. The problem of stowing soiledbundles—always a troublesome one—is partiallyeliminated by a daily schedule. The amount ofwork in process is also reduced, and betterdelivery schedules can be developed. In addition,daily scheduling of division laundry eliminates badodors in living quarters from soiled clothing anddefinitely helps morale. On the other hand, thelaundry workload on some ships may not justifya daily schedule—the amount of water and

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detergents that must be used can be unnecessarily and groups to whom the lots belong, (3) the per-heavy, and equipment must often run at less sonnel who deliver the lots, (4) the day and hourthan full capacity. of delivery, and (5) the hour of pickup. Study the

SAMPLE LAUNDRY SCHEDULE sample schedule” shown in figure 3-7. A sampleset of accompanying instructions showing the

Your laundry schedule should show such typical time of pickup, method of delivery, andthings as (1) the type of lot, (2) the individuals service rendered is given in figure 3-8. In

Figure 3-7.—Sample laundry schedule.

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TIME SCHEDULES 3. FLATWORK LOTS will includebath towels and flatwork. The

Time schedules for the laundry towels will be tumbled; andoperation are as follows: flatwork, such as bed and table

1 . INDIVIDUAL WORK wi l l be linens, will be ironed or pressedpicked up from the laundry at 1500 when possible.on the day following delivery. 4. SERVICE LOTS will be ironed on

2. DIVISION LOTS presented at the t h e p r e s s e s o r t u m b l e d , a slaundry at 0800 will be picked up equipment permits. Work uniformsat 1300 on the day of delivery, lots will be the only personal apparelpresented at 1130 will be picked up included in these lots.at 1630 the day of delivery, and 5. At the discretion of the laundry, iflots presented at 1600 will be tumbler production is behind, workpicked up at 1030 the following to be tumbled will sometimes beday. run through the flatwork ironer or

3. FLATWORK lots will be picked up pressed.at 1530 the day of delivery.

4. SERVICE LOTS presented at 0900will be picked up at 1430 on the METHOD OF DELIVERY

day of delivery, lots presented at1100 will be picked up at 1600 on The method of delivery to the laundrythe day of delivery, lots presented will be as indicated below:at 1300 will be picked up at 0900 1. OFFICERS’ AND CHIEF PETTYthe fo l lowing day , and lo ts OFFICERS’ bundles will bepresented at 1500 will be picked up processed daily in accordance withat 1030 the following day. the schedules posted in the

5. Late deliveries to the laundry will wardroom and C PO quarters. Abe processed at the convenience of laundry list will accompany eachthe laundry and not under the bundle. The customer’s countschedule indicated. should be entered in the proper

column.SERVICE RENDERED 2. EACH DIVISION will deliver its

work in two groups, one containingServices rendered will be as follows: all white work and one with1 . INDIVIDUAL LOTS wi l l be dungarees and black socks. All

t u m b l e d , e x c e p t shirts and division articles will be properlyuniforms, which will be starched stenciled before delivery to theand pressed. Undershirts and laundry. Items to be pressed will behand kerchiefs will be passed placed in a separate division bag.through the flatwork ironer, or 3. FLATWORK will be delivered intumbled. bulk.

2. DIVISION LOTS will be tumbled 4. EACH SERVICE ACTIVITY willexcept shirts and uniforms which deliver its laundry in bulk.will be pressed as schedule permits.

Figure 3-8.—Sample laundry instructions.

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preparing a laundry schedule for your ship, youwill, of course, modify the schedule according toyour circumstances. A ship’s laundry scheduleshould be flexible and yet should be able to ac-commodate shipboard conditions like generalquarters, all hands working parties, and othermajor evolutions.

In association with your laundry schedule, youshould maintain certain records and logs. Therecords you maintain should be consistent withyour spaces, equipment, and available personnel.Bulk work and press deck logs should be main-tained daily, and signatures should be requiredfor pickups of completed work. The informationin these logs should provide you with a valuableresource in preparing an effective laundryschedule. Consult your NAVSUP P-487 foradditional operational requirements associatedwith the successful management of a ship’slaundry.

BARBERSHOP SCHEDULE ANDAPPOINTMENTS

The purpose of scheduling appointments in thebarbershop is to provide better service for yourpatrons who have neither the time nor the inclina-tion to wait in line a long time for a haircut.

All personnel aboard ship should receive hair-cuts every 2 weeks. This means your appointmentschedule should be designed to allow your barber-shop to accomplish all the barbering work withinthis period.

In scheduling haircuts, you should take thefollowing factors into consideration:

1. The number of personnel aboard2. The number and competency of barbers3. The daily workload of each barber4. Space available for patrons to wait

(usually no more than two patrons shouldbe waiting for one barber)

A barber can usually give a satisfactory hair-cut in 20 minutes. Therefore, if kept busy all thetime during an 8-hour period, the barber can giveup to 24 haircuts per day. The barber needs timefor personal hygiene, for sterilizing barberinginstruments, and for assisting in general shopsanitation—to say nothing of rest periods and thenoon meal.

The two systems recommended for schedul-ing appointments for the barbershop are theappointment system and the division schedule.

Appointment System

In the appointment system, appointmentschedule sheets are marked off for a definitenumber of haircuts for each barber during theday. Barbers should maintain their own sheets andshould post them either 1 day ahead of the timethe haircut is to be given or early in the morningon the day the patrons apply for haircuts. Thereshould be a space for the signature of each patronopposite the appointment time the patron hasselected.

The appointment system works fairly well,although, on occasions, patrons fail to report fortheir appointments and can throw your scheduleoff. Occasionally, an unclaimed period can beclaimed by another patron. If you experience toomuch difficulty with broken appointments, youcan report the offenders to the supply officer, whocan report their names to the cognizant divisionofficer.

Patrons who make what they think areproper appointments and then find no barber toserve them are understandably upset. Makecertain the procedures you follow are well knownby the patrons and are followed explicitly by allof your barbers.

Division Schedule

The division schedule provides a definitenumber of hours during which personnel in aparticular division may receive service in the ship’sbarbershop. The division petty officer controls thescheduling of appointments and sends a certainnumber of patrons from the division to thebarbershop at a time. This method of schedulingprevents broken appointments, but it is generallynot preferred over the appointment system.

As the barbershop supervisor, you should saveall appointment sheets for at least 2 weeks justin case someone should complain about notbeing able to get a haircut because all the appoint-ments were taken. This will also protect the barberin the case of personnel failing inspections andthen claiming that they really did receive haircutsin the ship’s barbershop when they really did not.

PERSONNEL MANAGEMENT

In your duties as a supervisor, you willdiscover that personnel management will bemainly concerned with the assignment of yourpeople on the basis of ability and interest to

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perform specific functions, duties, and tasks.Good personnel management involves yourrecognizing that every individual uses a basicknowledge, skill, or ability in performing a taskand that each person’s capacities should be fullyused. In dealing with these types of dynamicaspects in an organization, you are not expectedto be a management engineer. However, as asenior petty officer, you should be able toexercise your leadership responsibilities to dealcapably in the area of human relations, In thissense, leadership can be defined as the capacityto direct or influence the behavior of otherstoward specific goals. In carrying out thismission, you will find that your responsibilitiesdo not stop with the assignment of duties and thedelegation of authority—you must also controlthe functions and tasks performed through theproper training and supervision of your people.Accordingly, the people in your organization mustclearly recognize and understand what their dutiesand responsibilities are, what authority has beendelegated to them, and to whom they are account-able in the chain of command. In the followingsections, you will discover some of the principlesthat govern the dynamic aspects of personnelmanagement.

ASSIGNMENT OF DUTIES

Duties are the tasks an individual is requiredto perform. One of the principles of organizationyou should observe is that every duty that is tobe performed must be assigned to someone. Thismeans that the obscure or once-in-a-while jobsmust be assigned as well as the jobs that are doneeach day. When individuals are assigned jobs,they should have a thorough knowledge of all theprocedures involved, the publications or otherdirectives required, and where they can obtain thistype of information. Persons who are assigned tojobs should also know the order in which varioussteps of the jobs should be performed. In addi-tion, people should recognize that they areexpected to complete the tasks in a minimumamount of time and yet consistently demonstratea certain level of quality in workmanship.

Fair Division of Work

Another principle you should observe regard-ing the assignment of duties is the fair divisionof the workload. Don’t make the mistake—whichis very easy to do—of having your best persondo all the work. In the first place, your error will

result in penalizing the person for being a good,dependable worker. When this individual leaves,the division will be in a mild form of chaos untilsomeone else can be trained. Furthermore, byplacing the burden of the workload on oneindividual, you fail in developing the potential ofyour other workers.

Recognition of Responsibilities

The principle of unity of command states thatthe final responsibility and authority at each levelof operation must rest with one person. Thismeans that responsibility for the accomplishmentof each task should be assigned to one specificperson. While some tasks cannot be performedwithout a team, only one individual in the teamshould have the responsibility for seeing that acertain job is done. Unless your crew membersrecognize what their responsibilities are, jobs areeither not going to get done or are going to getdone haphazardly. Even though individuals aregiven special liberties, they should know they arestill responsible for seeing that the jobs assignedto them must be carried out in their absence. Thisis an important principle that you, as a supervisor,must get across to your people.

DELEGATION OF AUTHORITY

Another important principle of organizationfor you to follow is that authority must be com-mensurate with responsibility. Authority is thedelegated right to make decisions in order to fulfilla certain responsibility. Authority involves theright to require actions of others, and the rightsof individuals to discharge those obligations forwhich they are responsible. Remember, youshould delegate authority as far down the levelof command as possible without loss of controlover policy or procedures. Keep in mind, however,that delegation of authority in no way relievessuperiors in the chain of command of theiroverall responsibility. A superior is ultimatelyresponsible even though the subordinate to whomthe tasks are assigned remains accountable to thesuperior. Here are some guidelines you can usefor effective delegation of authority:

Provide clearly stated policy guidelines toyour subordinates.

Set up proper controls and procedures.

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Define job assignments and delegate suffi-cient authority to ensure that subordinatesare able to properly perform their jobs.

Select subordinates who are capable ofassuming responsibility.

Give necessary help to subordinates whenhelp is needed.

Maintain proper lines of communication.

Evaluate results.

TRAINING YOUR STAFF

Before you set up a training program for yourstaff, you must first determine what needs to betaught and then how it should be taught. Thismeans that you should find out what previoustraining and experience your people have had, andthen you should gear your training program ona level that is suitable for their needs. Naturally,since you and your personnel have assigned jobsto do, much of your program will consist of on-the-job training.

On-The-Job Training

There are many ways in which on-the-jobtraining can be done. As mentioned earlier in thischapter, you can use your organization charts asa training tool. Oral instruction, written pro-cedures, visual demonstrations, and rotation ofduties are also methods that can be used for on-the-job training. However, you also should makea genuine effort to set aside some time for for-mal types of training for your people. Individualswith little or no previous training or experienceare going to need classroom instruction. Also, youshould make certain your subordinates are pro-vided with the necessary training manuals andother study materials so that they can qualify foradvancement. It’s up to you to encourage andmotivate your people.

Rotation of Duties

Although it is customary to assign routine jobsto specific individuals on whom you can depend,you will find it is a good idea to rotate your per-sonnel from time to time. Rotation of duties isa good way for individuals to learn how each jobcontributes to the overall division function; italso prevents a breakdown in the sequence of

operations when a key person is gone. Transfers,leave, and other absences of personnel are goingto occur, but these changes should not cause apanic button situation in your division.

Another advantage that will result from therotation of duties is motivation. Some jobs aresimply monotonous and fatiguing. Sometimes, achange of pace will stimulate interest in yoursubordinates who have been assigned boring jobs.However, you should avoid the mistake ofrotating your personnel too frequently. Eachindividual should be assigned specific tasks fora period of time that is long enough for thatperson to become a proficient and productiveworker who contributes to the overall efficiencyof the operations. If you move your peoplearound too much, they could end up lacking anunderstanding of what is being done and failingto develop a sense of responsibility.

Effective Communication

The basic requirement for the training of yoursubordinates is effective communication. To lead,supervise, and train others, you must be able tospeak and write in such a way that others canunderstand exactly what you mean. An importantrequirement for effective communication in theNavy is a sound knowledge of the Navy’s waysof saying things. Some Navy terms have beenstandardized for the purpose of efficient com-munication. When a situation calls for use ofstandard Navy terminology, use it.

Still another requirement of effective com-munication is the use of technical terms. Aperson who does not understand the precisemeaning of the terms that are commonly used inconnection with the work of the rating is alreadyat a disadvantage. When trying to read officialpublications or instructions relating to the work,this person is going to experience considerablefrustration and confusion. The person will alsoexperience a decided disadvantage when thewritten examinations for advancement are given.Although it is always important for you, as asupervisor, to use technical terms correctly, it isparticularly important whenever you are dealingwith lower rated personnel. Any sloppiness youmay show in the use of technical terms is likelyto be very confusing to an inexperienced person.Remember, whatever your subordinates do notunderstand in their jobs will be very evident toyou in the work they produce. Use the correct joblanguage at all times and try to clear up anymisunderstandings first.

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It is also important for you to maintain openlines of communication with your superiors aswell as with your subordinates. Your seniors mustbe kept informed on the status of your workloads,your equipment and personnel requirements, andany problems you are having. You should seekdirection from your superiors, request the helpneeded, and offer your recommendations forchanges or improvements. At the same time, youshould always offer guidance and aid tosubordinates. You should encourage your peopleto bring both problems and ideas to you fordiscussion and solution. Of course, one of themost important facets of training you can pro-vide for your subordinates is your personalexample of how effective communication worksboth up and down the chain of command.

Formal Training Courses

In addition to publications and training films,there are now a number of training coursesavailable to personnel in the Ship’s Servicemanrating. You may have an opportunity to attendone of the training courses yourself; or, as anenlisted supervisor, you may have the occasionto recommend junior personnel for participationin such a school. At present, the following coursesare available:

Ship’s Serviceman class A school—A6-week course designed to provide training toenlisted personnel in the areas of ship’s storeadministration, retail sales, and laundryoperations.

Ship’s Serviceman barber school—A4-week course designed to provide training toenlisted personnel in the area of barbering. Thecourse covers barbershop management and opera-tion, equipment and tools, men’s and women’shaircutting, and skin diseases and their preven-tion. Upon completion, the student receives theNEC for Barber which is 3122.

Laundry/dry-cleaning school—A 2-weekcourse designed to train Navy enlisted personnelto perform various steps required in receiving,marking, cleaning, and issuing of clothing thatis processed through dry-cleaning plants. Uponcompletion, the NEC 3154 for Laundry/Dry-cleaning Specialist is awarded.

Navy exchange/commissary school—A4-week course designed to provide training to the

middle grade petty officers who are going to beassigned to a Navy exchange or commissary.Upon completion, an NEC of 3114 is awarded.

Ship’s store afloat management—A6-week course designed to provide training forpetty officers in advanced ship’s store record-keeping. The course is made up of 5 weeks ofrecords and 1 week of management administra-tion. Upon completion, an NEC of 3112 isawarded.

YOUR ABILITY AS A SUPERVISOR

You may graduate from a formal school oryou may never have an opportunity to go to one,but one thing is still the same-you will never stoplearning how to become a good supervisor.Besides the special skills and knowledge you haveworked so hard to achieve in the Ship’s Service-man rating, you must constantly strive to developyour ability as a supervisor.

In supervising the activities under your con-trol, you should not try to control every detail ofeach operation. General orders should be enough;they leave your subordinates some latitude inwhich to make adjustments for unforeseen cir-cumstances. As a result, your subordinatesdevelop a sense of responsibility which in itselfis a necessary part of effective supervision.Therefore, you should learn how to use the con-cept of general orders effectively. You will findthat when you maintain a general level of super-vision not only do you establish confidence inyour subordinates, but you also remove from yourown workload the frustrations of having to copewith the details of someone else’s job.

Because of the nature of your rating, you maybe placed in supervision over various activities.Sometimes you may have to supervise a detailedoperation about which you have very littleknowledge. For example, if you area senior SHwhose specialty is the operation of retail activitiesand you find yourself in an assignment where oneof your responsibilities is general supervision overthe ship’s laundry, you must rely on otherpeople to help you out. The person in directcharge of the laundry is a Ship’s Servicemanwhose NEC is Laundryman—this is a person withconsiderable training and experience in laundryoperation. It will be good leadership on your partto show that you respect this individual’sknowledge. Work with this person in establishinga laundry schedule to meet the requirements ofthe ship. You should also recognize that this

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person knows the equipment and its capabilitiesand the personnel. Don’t put the person in animpossible position by demanding more than canbe done. But once a schedule is established, leavethe details of meeting the schedule to your expert.Give aid in matters where you have moreknowledge and experience. Expect a high level ofperformance, but if emergencies arise, such as abreakdown of machinery, give the support yourpeople need in obtaining repairs or makingemergency arrangements. Insist that yoursubordinates take good care of the machinery, butbe certain you know the facts before you startassigning any blame for a mishap.

In supervising the barbershop, you shouldmake certain the required sanitary regulations areobserved and the haircut schedule is adequate tomeet the requirements of the commanding officer.Direct responsibility for matters such as main-taining an adequate stock of supplies and the per-formance of each barber should belong to thepetty officer who is in charge of the barbershop.Here again, unusual problems or difficultiesshould be of concern to you, as the supervisor,and these problems should receive your immediateattention. The important thing to remember isthat you must always act promptly. Never let aproblem go unsolved even if the best you can doat the moment is to provide only a temporarysolution. Follow through later on to discover thecorrect ultimate solution, and see that the solu-tion is adopted.

In your supervision of the retail activitiesunder your control, the importance of main-taining strict control over all the retail functionscannot be overemphasized. This does not meanthat you should try to supervise all the operationsdirectly, but you must impress upon your subor-dinates that they are required to follow correctprocedures. By observation and inspection, youmust ensure that proper accountability is main-tained. One of your most important controls isthat of auditing the ship’s store’s records andreturns. A thorough discussion of the auditing ofreturns will be provided to you in chapter 7 ofthis training manual.

In your duties as a supervisor, you willprobably discover that providing good customerservice is one of the most important aspects ofyour job. You will have significant responsibilitiesfor making certain the enlisted personnel who manthe points of contact with the customers—barbershop, laundry, ship’s store, tailor shop—are aware of the importance of providing thebest possible customer service, The success of

any ship’s service division in improving the generalmorale of all shipboard personnel is dependentto a considerable degree on the face-to-face rela-tionships between the custodians or operators andthe customers. You, as leading petty officer,should encourage ship’s service personnel torespond to each customer’s needs as they wouldwish others (the DK, for example) to respond totheir needs. You should always try to instill inyour people a sense of pride in performance. Amore detailed discussion of the importance ofeffective customer servicelater on in this chapter.

Maintaining a SuitableSpan of Control

to the Navy appears

In all the activities you supervise, a principleof good organization that you should use is themaintenance of a suitable span of control. Thisprinciple implies that the greater number ofpeople that one person must supervise, the moredifficult it will be for that person to superviseeffectively. A common rule you should use is thatyour immediate supervision should not extendover more than eight persons or less than fourpersons. However, the type of work being done,the capacity of a given supervisor, and therelationships between a supervisor and thesubordinates are all factors that enter thepicture. The location of subordinates in relation-ship to the supervisor is also a consideration. Yourlayout should permit you to have frequentpersonal contact with those you directly super-vise.

There is also a time element involved withsupervision. As was mentioned, you should assignresponsibilities and delegate authority as much aspossible without losing control of policy and pro-cedures. Generally, your span of control shouldallow your subordinates to perform most of theroutine work. This technique provides you wit hthe time to supervise your people, to performany work that is beyond the capacity of yoursubordinates, or to complete any work thathas been assigned to you by your seniors.

Evaluating the Work ofYour Personnel

As a supervisor, you will be expected toevaluate the quality and quantity of the work thatis performed by your personnel. Most supervisorsyou may ask will probably tell you that the fair

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evaluation of subordinate personnel is one of themost difficult aspects of any supervisor’s job.

As a supervisor, you must be able to decidewhen criticism or praise is due. A good rule foryou to follow is to criticize in private and to praisein public. Remember, criticism should be con-structive and informative. Don’t make the mistakeof using criticism as an outlet for expressingsarcastic comments, degrading your crew, ordisplaying anger. This type of action will onlycreate hostility and destroy morale. If you havethe right attitude, the crew will soon realize thatyour criticism is not to be feared but that it is givenas help and guidance.

As with criticism, there is an art to givingpraise. To be effective, praise should not be over-done. When individuals are doing a good job onroutine work, they need some words of en-couragement and appreciation. This will build uppride and self-respect-elements that are necessaryfor maintaining good morale. But save the “well-done” commendations for job performances thattruly merit public recognition.

Evaluating your people is such an importantpart of your job as a supervisor that you shouldbe especially careful to put your best effort for-ward. Try to keep the work of each of yoursubordinates in perspective, try to be fair, andalways try to express any criticism or praise in amanner that will promote growth and awarenessin your subordinates instead of resentment andbitterness. Also, you should keep in mind that ajob performance should be accurately reflectedin enlisted evaluation reports. For detailedinformation on enlisted evaluation procedures,you should consult Military Requirements forPetty Officer First Class and Military Require-ments for Chief Petty Officer.

YOUR ABILITY AS A LEADER

As most experienced supervisors will tell you,you will never stop learning how to become a goodleader. As a senior Ship’s Serviceman, you willnow be expected to apply all the training in leader-ship you have received throughout your navalcareer. You will also be expected to providetraining in leadership to all of your subordinates.There should be a constant training program inleadership going on in every ship’s servicedivision.

Your ability to lead will be most apparent inyour supervision of other people. But, you shouldkeep in mind that your ability as a leader willmanifest itself in more subtle ways in almost

everything you do. Your personal example willprobably contribute more to your success as aleader than will any other single factor. Yourattitude toward your job, your subordinates, andyour seniors is sure to be contagious. By settinga good example, you can make your job as aleader and as a supervisor a rewarding experienceand the dividends you derive will be many.

ADMINISTRATION

In any ship’s service activity, especially inany ship’s store division, there are manyadministrative matters that must be coordinatedwith the overall operation. From your study ofShip’s Serviceman 3 & 2, modules 1 and 2, youare probably familiar with some administrativematters, such as basic procedures concerning cor-respondence, files, and records. Now it is time foryou to deal with the supervisory aspects of thesematters. You are now responsible for initiatingand controlling correspondence; maintaining files,records, publications, and directives; and develop-ing procedural instructions.

CORRESPONDENCE

As a senior Ship’s Serviceman, you will beexpected to initiate routine correspondence and,on occasion, to prepare drafts of Navy directives.This means you will be responsible for originatingthe contents of letters or other types of cor-respondence and for placing all types of cor-respondence in their proper formats. At someactivities, you may be expected to prepare smoothcorrespondence from rough drafts that wereprepared by others.

The importance of correctly written andcourteous correspondence cannot be overem-phasized. Efficiency of any operation is increasedif the communications that are transmitted withinactivities of the Navy are all properly prepared.Relationships between activities of the Navy aregoverned, in a large measure, by the tone andquality of the written communications exchangedbetween them. In recognition of this, NavyRegulations states that official correspondenceshall be courteous in tone, concise, and accurate.

Writing Guides

From your study of Ship’s Serviceman 3 & 2,you are probably already familiar with thestandard formats and basic procedures for the

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preparation of official correspondence includingnaval letters, business-form letters, endorsements,speedletters, messages, memoranda, and Navydirectives. For guidelines on official cor-respondence and for more detailed informationon standard Navy correspondence practices, youshould review the material covered in chapter 3,module 1, of Ship’s Serviceman 3 & 2, and youshould consult the Department of the Navy Cor-respondence Manual, SECNAVINST 5216.5C.

Classified Information

On rare occasions, you may encounter cor-respondence that contains classified information.Under these conditions, be sure to consult theDepartment of the Navy Information and Person-nel Security Program Regulation (Navy SecurityManual), OPNAVINST 5510.1, for the properprocedures governing the handling and control ofclassified information. The Navy Security Manualis supplemented by the Guide for Handling andControl of Classified Matter, OPNAVINST5510.40, which contains guidelines for develop-ing uniform systems for the handling and controll-ing of classified information.

Principles of Letter Writing

Before you can produce an effective letter, youmust give some thought to planning and organiz-ing what you intend to say. The first step youshould take is to determine exactly what you wantyour letter to accomplish. Preparing a statementof the subject of your letter will help you to clarifythe purpose of your letter and will give you someguidelines on what you should include and whatyou should omit. Some common purposes ofnaval letters are as follows:

To request permission or authorization toact

To request that action be taken

To request information

To supply information or instructions thatwere not requested

To reply to a request for permission orauthorization to take an action

To reply to a request that an action betaken

To reply to a request for information

ORGANIZING THE LETTER.— T h evarious parts of your letter should be organizedwith the reader’s viewpoint in mind. Use only thereferences that are necessary and keep in mindthat addressees may not have access to certainreferences. Use enclosures only if you need themto clarify or explain the basic contents of yourletter in greater detail, Arrange the paragraphs ina logical order. Each paragraph should discuss anidea, or several closely related ideas, covering asingle topic, or subtopic, of the general subject.The important things for you to remember are to

envision the body of your letter as a suc-cession of units,

arrange the units in what seems to you tobe the most satisfactory order,

complete each unit before you move on tothe next one, and

maintain continuity by providing a tran-sition from one unit to another.

CHOICE OF WORDS.— Use simplelanguage. The best words are those that are precisein meaning, suited to the intended reader, and areas short, simple, and direct as possible. Avoidusing a long word merely for the sake of soundingmore important or more dignified. Usually, suchattempts will only result in your sounding preten-tious, stuffy, and hard to understand. Not onlyshould you avoid using long words where shortones would be better, but you should also avoidusing more words than you really need. Tell yourstory as briefly as possible—the reader willappreciate it.

COMPLETING THE LETTER.— Reviewyour draft before you type it in the smooth. Makesure your letter tells the story with tact, simplicity,and clarity. Make certain that sentences aregrammatically correct, and accept criticism fromyour superiors as a guide for self-improvement.When you assign a file number to your letter,select an identification code that is appropriateto both the purpose of the letter and the files inyour own office. Finally, ensure that the letter ismailed to a correct address. Correct names,addresses, and applicable ZIP Codes are con-tained in the Standard Navy Distribution List(SNDL), part I—“Operating Forces of the Navy”

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(CONFIDENTIAL), andNaval Shore Activities.”

FILES AND RECORDS

Among other duties

part II—“Catalog of

as a senior Ship’sServiceman, you may find yourself in charge ofthe ship’s store division office in which you willbe responsible for establishing and maintaininga standard Navy filing system. Your basic guideto the Navy’s system of identifying files andrecords is the Department of the Navy StandardSubject Identification Codes, SECNAVINST5210.11. The use of the numeric and name-titlecodes contained in this directive for identifyingfiles and records is discussed in chapter 3, module1, Ship’s Serviceman 3 & 2.

Organizing the Files

In your study of Ship’s Serviceman 3 & 2, youwere introduced to the basic files and records thatare required and that must be maintained in aship’s store division office. These records includethe general correspondence files, the directivesfiles, and the ship’s store records files. Additionalfiles may be required depending on your organiza-tion and the functions of your particular office.Unless you are assigned to a newly commissionedship or activity, chances are you will not be con-cerned with the initial establishment of a filingsystem. However, this does not mean your existingsystem cannot be improved. You should reviewyour office’s filing needs periodically with a viewtoward eliminating unnecessary files, con-solidating related files, and disposing of obsoletefiles. The ideal time to do this is at the time youterminate files. Correspondence files, like anyship’s stores files, should be terminated at the endof each accounting period. Exceptions should bemade only for active correspondence that isneeded for quick reference. When you are startingnew files, you should establish essential filesonly and you should avoid excessive cross-referencing.

Clearly identify correspondence file folders bythe appropriate numeric codes or name-title codesused as file numbers. Keep the file folders in thesame code sequence as that listed in the StandardSubject Identification Codes. Directives, ofcourse, should be maintained in standard three-ring binders. The binders should be marked toindicate the series oft he directives they certain.Ship’s store records files should be identified asto accounting period and accountable officer.

Maintaining the Files

Don’t let the material for the files pile up.Establish a routine that will ensure that completedcorrespondence and records are filed each day.Indoctrinate your personnel on proper filingpractices and carefully supervise the filing opera-tion. You should ensure that directives are filedaccording to the Navy Directives Issuance System.When material is removed from the files forreference or for any other action, keep a recordof the material that was removed and the nameof the person to whom it was released. Reviewthe record daily to ensure that ship’s store recordsare returned to the files at the end of the day andthat other material is returned to the files whenthe related action is completed.

Disposing of Obsolete Files

As mentioned earlier, you should properlydispose of obsolete files when the files are termi-nated. The obsolete files are those that haveoutlived their current usefulness and must bedisposed of either by local destruction or bytransfer to another activity for preservation or forlater destruction. For detailed official instructionsgoverning the proper disposal of files and records,you should consult the Disposal of Navy andMarine Corps Records, SECNAVINST 5212.5.This directive defines the categories of files andrecords, and it lists which records can be disposedof locally and which must be forwarded to federalrecords centers.

PUBLICATIONS AND DIRECTIVES

By now, you are probably familiar with thevarious publications and directives that are usedin a ship’s store division. However, as a super-visor, you must know not only the purpose anduse of these publications but also how they areprocured, issued, stowed, and maintained.

Procurement

Initial supplies of publications and directives(and changes thereto) are automatically dis-tributed to your ship or activity by centralizedsupply points. The supply points use yourdistribution code number (assigned in the SNDLto your particular activity) to determine the typeand quantities of publications and directives thatare essential to your activity’s operations. Whenyou require additional copies of publications

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and directives, you must requisition them throughthe normal Navy supply channels and accordingto your local procedures.

Issuance

Internal distribution of publications isnormally a function of the ship’s office. Oncepublications or directives are received by yourdivision, you should establish check-out andcheck-in procedures for these materials. You canuse standard IN-OUT cards which are availablethrough the supply system for this purpose.

Stowage

Aboard ship where space is a problem, youmay have to stow publications on the top of yourdesk, or in a seldom used file cabinet drawer.

The main thing is to make certain that fre-quently used publications are readily accessibleto the people who need to use them. Stowpublication-type directives with your otherpublications, but be sure to place locator sheetsin your directives binders so you will know whereto find these directives when changes are received.

Maintenance

It is important that you keep all officialpublications and directives up to date. An out-of-date or poorly maintained publication ispractically useless because of the incorrectinformation or obsolete procedures it might con-tain. This point cannot be overemphasized inregard to any of the ship’s store procurementpublications, such as the Ship’s Shore AfloatCatalog (SSAC) or the Ship’s Store ContractBulletin. Remember, out-of-date procurementinformation often leads to unnecessary delays inthe shipment of merchandise.

Thoroughly indoctrinate your personnel onthe procedures they should follow for makingchanges and corrections to publications and direc-tives. As you know, most publication changescontain a cover sheet which gives specific instruc-tions for making changes. Make sure your peopleread the cover sheet before they attempt tomake any changes, Whenever a list of effectivepages is included with a change, make sure thatthe page numbers are checked before any of theremoved pages are thrown away. Use the NavySupply Corps Newsletter to verify the accuracyof your NAVSUP publications in terms of thelatest changes. The Newsletter is distributed

monthly to all Supply Corps officers and to themaster and senior chief petty officers who areserving in the AK, DK, SK, MS, and SH ratings.

PROCEDURAL INSTRUCTIONS

As a senior petty officer, you maybe requiredto assist the supply officer in the preparation ofinstructions. Supply department instructionsshould be prepared according to the guidelinesfurnished in Shipboard Procedures (NWP-50) andthe requirements of type commanders. Supplydepartment instructions are required by NAVSUPP-487 for prescribing safety precautions andoperating instructions for equipment and sanitaryregulations for equipment and spaces. However,you do not need to prepare these instructions aslong as you have already posted plastic laminatedplacards incorporating the requirements of cogni-zant bureaus or commands. In any case, youshould post these instructions or requirements inconspicuous places where they may be readily seenby concerned personnel.

You will be required to prepare instructionscovering subjects that concern your ship’s storedivision personnel.

Hours of operation for the ship’s storesand related service activities

Regulations for the procurement, stowage,custody, inventory, and sale of tax-freecigarettes

Assignment of an authorized inspector ofship’s store material

Appointment of a cash collection agent

POLICY SIGNS

You must post various policy signs, especiallyin your sales activities. You must place a signadvertising the harmful effects of cigarette smok-ing in each area where cigarettes are sold, whetherthey are sold by the pack or by the carton.

You should post a sign to the effect that per-sonal checks and traveler’s checks will be acceptedup to the amount of the sale. You should also posta sign that explains the ship’s store’s policy forthe returning of defective merchandise that waspurchased in the ship’s store.

A notice should be posted that special orderscan be made through the ship’s store office forauthorized merchandise that is not carried in

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Figure 3-10.—Claim for loss of or damage to personal clothing.

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Procedure for Handling Claims

An original and two copies of a claim, similarto the one in figure 3-10, should be prepared bythe individual who is making the claim and shouldbe forwarded to the commanding officer via theship’s store officer. After the claim has beenapproved and the commanding officer hasauthorized and directed payment, the individual(payee) will present all copies of the claim to thedisbursing officer for payment. For cashpayments, the disbursing officer will obtain thepayee’s signature on the original claim under thespace headed Paid by Cash. The disbursingofficer will then furnish to the ship’s store officerone copy of each paid claim and two copies ofthe Reimbursement Voucher (Standard Form1129). One copy of the Standard Form 1129 willbe submitted with the ship’s store returns, and onecopy (with a copy of the approved claim attached)will be filed with the retained returns.

SAFETY PRECAUTIONS

You, as a senior Ship’s Serviceman, have theobligation to be aware of all safety rules and ship’s

instructions. You must also make certain yourtroops are aware of the rules and are complyingwith the instructions. Most safety rules are justcommon sense, but rules are often ignored if theyare not strongly enforced. Violations range fromthe laundryman’s inserting an object in a laundrypress button (so as not to have to use bothbuttons) to your troops not wearing hard hatswhile they are out on deck during an UNREP.Safety rules are mostly little things, but if theyare ignored, they can become big problems foryou as a supervisor. Be aware of your ship’s rulesand insist upon absolute compliance on the partof your people.

As you have probably recognized, a manager’sjob is not really an easy one. Being a good super-visor and leader will be the most important goalyou can achieve as a senior Ship’s Serviceman—and it will be the most difficult one. In all of yourmanagement responsibilities and duties, you cando the best possible job if you can just keep threerules in mind:

Know your job.

Know your people.

Know yourself.

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CHAPTER 4

PROCUREMENT

As a senior petty officer, you will have increas-ing responsibilities in the areas of selection, in-ventory planning, and procurement of ship’s storestock. Ship’s store stock includes all articlesintended for resale in the ship’s store, consumablematerials intended for use in related serviceactivities, and minor equipment and parts notincluded in allowance lists for related serviceactivities. In addition to ship’s store stock, youmay assist in the procurement of major equip-ment, equipment repair services, and other supplydepartment materials.

AUTHORIZED MERCHANDISE

Before you can decide what merchandise tostock, you must be aware of what items you areallowed to carry. Because of the varyingrestrictions on different types of merchandise,determining whether an item is authorized canbe somewhat confusing. Basically, however,merchandise can be divided into four categories,each of which will be discussed below.

U.S. merchandise for stock

U.S. merchandise for special order

Foreign merchandise for stock

Foreign merchandise for special order

U.S. MERCHANDISE FOR STOCK

In your procurement of ship’s store stock, youwill probably order more U.S. merchandise thanany other type of stock. Although U.S. merchan-dise is the broadest category of available stock,you must still determine which items have beenauthorized for the ship’s store. Fortunately, thereare resources you can use as guidelines.

One of the most important tools you will useis the basic list of authorized items contained in

the NAVSUP P-487 (Ship’s Store Afloat). Thislist is designed to help you provide your ship withthe necessary health, comfort, or convenienceitems to be used by shipboard personnel in theirday-to-day lives. The items are listed alpha-betically within categories. You should notice thata unit cost limitation has been established onvarious luxury items.

The Ship’s Store Afloat Catalog (SSAC),published by the Navy Resale and Services Sup-port Office (NAVRESSO), is an importantresource you can use for determining what itemsof stock you should carry. You may procure forstock any item in the SSAC that is not designatedfor special order only even though the item mayexceed the unit cost limitation or may not be onthe authorized stock list at all.

An additional procurement aid is the Ship’sStore Contract Bulletin. You may procure forstock any items included in this bulletin, but whichwere not included in the basic list of authorizeditems (NAVSUP P-487), from any of the sourceslisted. Basically, any item of U.S. merchandisethat you wish to carry in stock must be containedon the authorized stock list within the unit costlimitation or must be procured either from theSSAC or from the Contract Bulletin.

U.S. MERCHANDISE FORSPECIAL ORDER

A special order is when you place an order foran authorized patron upon the patron’s request.Immediately upon receipt, the item should be soldto the patron and should not be carried in stock.Among the procedures for placing special orders,there are some optional measures you should con-sider. For example, your commanding officer maydirect the ship’s store officer to collect for specialorders before you place the purchase order.Another step you can take is to ensure that theindividual who is placing the order is notdetaching before the expected receipt of themerchandise.

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You should always make certain that the typedcertification for any special order includes theindividual’s name, grade or rate, division, transferdate, and enlistment expiration date. If prepay-ment was required, the certificate e should alsoinclude the amount of payment that was received.

The list of authorized items in NAVSUP P-487also applies to U.S. merchandise for special order.Of course, any items that are not covered in yourSSAC must be submitted to NAVRESSO forapproval. In addition, you should observe thatsome of the items listed in the SSAC are forspecial order only. You should not order theseitems for stock.

On the other hand, there are certain items thatyour shipboard personnel may need that you canacquire only by special order. For example, youmay need to procure unusual sizes of standardNavy clothing items. Because these items are notlisted in the Afloat Shopping Guide (ASG),you must procure them by special order only.You should remember that any special order youplace for unusual sizes of standard Navy clothingmust be for individuals only and not for stock.Other examples of merchandise that You mustprocure on a special order basis only are the goldrating badges and service stripes for chief pettyofficers and other enlisted personnel below the E-7level who are entitled to wear these items.

FOREIGN MERCHANDISEFOR STOCK

You may stock foreign merchandise for resaleduring your ship’s deployment overseas, but youwill be limited to merchandise that is locallyavailable in the area of your ship’s operation.Regulations that have been established by theappropriate commands will also govern your pro-curement of foreign merchandise for stock. Shipscan procure authorized foreign merchandisethrough two programs: the Sixth Fleet ForeignMerchandise Program and the Pacific FleetForeign Merchandise Program. Foreign merchan-dise warehouses have been established at Navyexchanges in Rota, Spain, and Naples, Italy, forthe Sixth Fleet Foreign Merchandise Program andin Yokosuka, Japan, and Subic Bay, Republic ofthe Philippines, for the Pacific Fleet ForeignMerchandise Program. Both programs exist tosupport the ships that are deployed in the Mediter-ranean and the Western Pacific with a range offast-selling foreign merchandise items that havebeen authorized for stock in ship’s stores.However, there are also certain items such as

furs, autos, and wines that are prohibited forstock or for special order purchases. Items listedin overseas contract bulletins are basicallyauthorized for stock unless these items have beendesignated for special order only. You shouldremember that fleet, force, and type commandersmay prescribe additional instructions and/orlimitations that are applicable to the ordering andreceiving of authorized stock in their areas ofjurisdiction. It is important that you thoroughlyread and understand these instructions before youmake any attempt to procure foreign merchandisefor your ship. Authorized items of foreignmerchandise that you procure in the area of yourship’s operation must be received, stocked, andsold in that area; you cannot handle these itemsoutside the designated area, Ships that aredeployed to areas outside of the European or FarEastern areas may procure foreign merchandisethat is available locally in the port of call.However, merchandise that originates fromsources within communist-controlled areas can-not be procured.

Another consideration in the procurement offoreign merchandise is that you must be able todispose of all of it before your ship returns to theUnited States. Therefore, the handling of foreignmerchandise may create difficult problems andlosses of profit without your proper attention andsupervision. To avoid being stuck with an excessof unsalable foreign merchandise at the end ofa tour, you should follow the procurement stepslisted below.

Consult and use the NAVRESSO bulletinswhich contain a listing of the best quality foreignmerchandise at the lowest prices and follow theprocedures prescribed by fleet, force, and typecommanders.

Estimate carefully the potential sales forthe period your ship expects to operate in the area.Base your estimation on previous deploymentsand from your canvassing of the crew. Re-member, when your ship is operating in the areafor a period of more than 90 days, the inventoryof foreign merchandise must not exceed your 90days’ estimated sales.

Obtain merchandise early to ensure thegreatest length of time for sales. When your shipis to remain in the area for 90 days or less, pro-curement must not exceed the estimated sales forthe remaining 60 days. You should not procuremerchandise that will arrive on board 30 days or

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less before the departure of your ship from thearea. Finally, if your ship is operating in an areafor less than 30 days, you should procure foreignmerchandise by special order only.

If you provide the necessary time and atten-tion to these procurement precautions, you shouldnot be faced with the problem of excess foreignmerchandise at the end of your ship’s tour. If,for some reason, you should ever find yourselfstuck with unmarketable foreign merchandise,you must follow the appropriate disposal pro-cedures. These procedures are discussed in chapter5 of this rate training manual.

FOREIGN MERCHANDISE FORSPECIAL ORDERS

With the exception of forward deployed ships(ships homeported overseas excluding Hawaii), nospecial orders of foreign merchandise should bemade through the ship’s store. You should refercustomers to the Exchange Catalog for theMilitary Services or suggest they make directpurchases over the counter through the militaryexchange that is serving the area. In addition, con-cessionaire contract agreements may be used inareas where these agreements have been approvedby fleet, force, and type commanders.

You should also make your customers awareof the Exchange Catalog Mail Order Program bywhich your ship can receive rebates. The rebatesare based on a proportion of mail order salesgenerated by your ship in relationship to total salesas reported by the Army and Air Force ExchangeService (AAFES). Rebate checks are distributedto various ships by NAVRESSO on a triennialbasis during the months of April, August, andDecember. The rebate check for your ship will godirectly to Ship’s Store Profits, Navy, as a con-tribution. You can find details on how to acquirerebates for your ship in NAVSUP P-487.

LIMITATIONS

In addition to the various limitations alreadymentioned, NAVSUP P-487 prescribes furtherqualitative and quantitative limits on specific typesof items. Examples of some of these restrictionsare discussed below.

Qualitative Limits

You are restricted by particular qualitativelimits in your procurement of certain items, such

as sunglasses, food, books, records, magazines,and beer. For example, you may not procuresunglasses that might have harmful opticalproperties. Also, the sunglasses you stock musthave frames made of slow-burning plastic ormetal. As for food items, you cannot sell any foodin the form of short orders. In the procurementof magazines and records for the ship’s store, youare limited to materials that are not consideredto be obnoxious or offensive. You can findguidelines for judging the acceptability ofmaterials such as magazines, books, and recordsin NAVSUP P-487. As for your limitations onthe procurement of beer, you may procure beerfor recreational purposes, but you may not stockbeer for resale to the crew through the ship’s store.

Quantitative Limits

You must observe certain quantitative limitson a variety of authorized items that bear yourship’s identification, such as cigarette lighters,cups, and stationery. You should limit your stocksof these items to 90 days’ anticipated sales. Ifnecessary, however, your initial orders mayreasonably exceed this quantity if you are tryingto meet a vendor’s minimum order stipulation.You must limit your stocks of all other items bear-ing your ship’s identification to quantities that donot exceed 25 percent of your ship’s total com-plement unless you obtain NAVRESSO approvalbefore you begin any type of procurement action.

You may not order tax-free tobacco productsin excess of your anticipated sales in the ship’sstore while your ship is beyond the 3-mile limitof the United States. The procedures you shouldfollow in handling tax-free tobacco products arediscussed in chapter 6 of this manual.

There are other limitations you must observewhen you are procuring stock for your ship’sstore. As mentioned before, authorized ship’sstore stock includes any item of stock that is listedon any of the authorized stock lists. Items thatare not authorized for ship’s store stock willgenerally fall within two categories: (1) items thatare not listed on authorized stock lists and (2)items for which procurement is strictly prohibited.

Unlisted Items

In procuring ship’s store stock, you can re-quest items that are not on the authorized stocklists as long as these items are not prohibited. Youshould submit your requisitions to the NavyResale and Services Support Office (NAVRESSO).

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Consult NAVSUP P-487 for the details youshould include in these requests. You shouldremember that the restrictions that have beenimposed on you are not intended to stifle yourinitiative. If you submit a request properly, youwill normally receive approval from NAVRESSO.

Prohibited Items

You are strictly prohibited from procuringcertain merchandise for your ship’s store. Forexample, any items that bear the impression ofU.S. currency are prohibited merchandise. Youcannot procure these items for your ship’s store.You are also prohibited from procuring specialoccupational and environmental clothing andtextile (cog symbol 9D) items unless you havereceived written authorization from the Com-mander, Naval Supply Systems Command. Inaddition, you are especially prohibited frompurchasing or selling through your ship’s store anymedical items such as drugs, remedies, vitamins,or other similar products for the external orinternal treatment of diseases or conditions.

STOCK CONTROL

The ability of your ship’s store to support theneeds of your ship will largely depend upon howwell you, as a senior Ship’s Serviceman, handlethe responsibilities of stock control. To developand maintain effective stock control, you shouldreview your inventory control records and makeyour scheduled monthly review of all stock andstock records. These reviews provide fundamentalknowledge with which all responsible ship’s storepersonnel must be familiar in order to develop andmaintain effective stock control. Your efforts instock control are important because your ship’sstore does not have an unlimited amount ofmoney to invest in stock. Carrying excess stockwill cause you to waste valuable storeroom spacethat might be used for other materials. Frequently,this type of waste results in a decrease in sales.On the other hand, if an adequate supply ofmaterial is not in stock, a decrease in sales willalso occur. There is an optimum stock level youshould achieve that will minimize the loss of salesthat would result from these problems. Main-tenance of an optimum stock level is the primarypurpose for your scheduled monthly review of theinventory control records and the stock recordcards.

To appreciate the importance of effectivestock control, you must first understand how theflow of money and materials in the Navy resalesystem affects your ship’s store afloat. The follow-ing diagram represents the system.

The cycle begins with WORKING CAPITAL(Navy Stock Fund [NSF] money) which is usedto procure your ship’s store stock. PROCURE-MENT of ship’s store stock determines theamount of INVENTORY. SALES of ship’s storestock then replenish your WORKING CAPITAL.In addition to replenishing your WORKINGCAPITAL for the cost value of the items sold,SALES also generate your PROFITS. Your PRO-FITS are determined by the markup over cost thatwas applied to the various items sold in the ship’sstore.

As a ship’s store manager, you will use as youroptimum stock level an anticipated 90 days’supply of stock. If you exceed this amount, youare tying up too much Navy Stock Fund moneyin your ship’s store inventories, for only so muchNSF money is allocated on a Navy-wide basis forinventories. On the other hand, your failure tomaintain sufficient stocks on board will ultimatelyresult in decreased sales.

A sales-stock ratio is computed to determineyour efficiency in maintaining your optimumstock level over a given period of time. As statedin the NAVSUP P-487, you should maintain a1.33 to 1 ratio of sales at cost price to yourbeginning inventory (less standard clothing items)per each 4-month accounting period. In otherwords, a W-day supply of stock should “turnover” 1 1/3 times in a 120-day (or 4-month)accounting period. You can obtain your stockfigure by dividing your cumulative expendituresfor the number of months covered by thebeginning inventory. You will read more aboutthe actual calculation of your computation ofyour stock turn figure later in chapter 7. For now,however, the following example of various sales

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stock ratios may help you to understand exactlyhow stock turn ratios work.

CUMULATIVE BEGINNINGEXPENDITURES lNVENTORY STOCK TURN

$8,000 $6,000 1.33

7,400 6,200 1.19

16,000 10,400 1.54

Now, take another look at the resale cyclediagram. You should remember that the optimumstock level (INVENTORY) is defined as a 90-daysupply of stock and that the rate at which thisstock level (INVENTORY) should be turned overby SALES is defined as a ratio of 1.33 to 1. Ifa ratio of 1.33 or above is maintained, thensufficient WORKING CAPITAL should beavailable to you to initiate additional PROCURE-MENT. In ship’s store management, the inven-tory control record is the tool you should alwaysuse to maintain a running check on the amountof WORKING CAPITAL that is available to you.

AUTHORIZED INVENTORYAND INCREASES

Your initial authorized inventory representsyour ship’s allowance. Your allowance is basedon the number of officers and enlisted personnelcurrently on board including embarked staffs,embarked air groups, Marine Corps detachments,passengers, or the highest onboard personnelcount, whichever is greater. Generally, themonetary limitation for a ship’s store stock isbased on $18 per person per month and allowsfor a maximum of approximately 3 months’stock. Service ships, such as ASS, ADs, and ARs,are authorized an additional $10 per person permonth to support customers from the ships forwhich the service ships are providing support. Youshould keep in mind that you can obtainauthorized increases of your ship’s store stock ifyour ship is being deployed to overseas areas.Your ship will be authorized an additional $18 perperson per month up to an amount that will notexceed your overall stockage objective for thelength of time your ship is going to be deployed.

Foreign merchandise from fleet supportwarehouses is an authorized addition to yourinventory. To ensure proper stock control, youshould carefully monitor any foreign merchan-dise you acquire during your ship’s deployment.

You should consider the total dollar value ofcanned sodas as a separate authorized increase toyour inventory limitations whether your ship isdeployed or whether it is operating in the con-tinental United States (CONUS). Whenever yourinventory limitation is increased for deployment,you should send a letter to NAVRESSO, with acopy to the type commander, containing thefollowing information.

1. The monetary value of the increase2. The reason for the increase3. The period of time in which the increase

is taken4. The current number of personnel on board

your ship

Your total authorized inventory will be a com-bination of the original authorized inventory(which is $54 times the current number of per-sonnel on board) plus the canned sodas inventory.When your ship is deploying, you should includein your total inventory your ship’s foreign mer-chandise inventory and an additional $18 perperson per month times the months of the ship’sscheduled deployment.

INVENTORY CONTROL RECORDS

An inventory control record is a managementtool designed to help you make certain that yourship’s store meets the following objectives:

1. A stock turn of 1.33 for each accountingperiod

2. A total inventory of ship’s store andstandard Navy clothing stock that doesnot exceed the authorized limits

There are two inventory control records youmust use for the ship’s store: (1) Inventory Con-trol Record for Ship’s Store Stock and (2) Inven-tory Control Record for Standard Navy ClothingStock. Although you are normally required tomaintain a separate inventory control record forstandard Navy clothing, you can include standardNavy clothing on the Inventory Control Recordfor Ship’s Store Stock whenever you sell standardNavy clothing through the same cash registerused for ship’s store stock or when your inven-tory balance for standard Navy clothing is lessthan $300 and sales for standard Navy clothingare also less than $300 per month. In the case ofboth inventory control records, you should roundoff all money values to the nearest dollar.

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Instructions and information for maintaining both for both records. You, as a senior Ship’srecords are provided below. You should refer to Serviceman, must be able to prepare and main-figures 4-1 and 4-2 as you read this information. tain both inventory control records for your ship’sStudy the information carefully and make certain store. Even if these records are normally main-YOU understand the procedures that are required tained by the ship’s store officer, you should

Figure 4-1.—Inventory control record for ship’s store stock.

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Figure 4-2.—Inventory control record for standard Navy clothing.

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still familiarize yourself with the required pro-cedures and entries.

Inventory Control forShip’s Store Stock

The basis of the Inventory Control Record forShip’s Store Stock is your estimate of the next 90days’ cumulative expenditures. By subtracting theapproximate onboard inventory and outstandingorders from your cumulative expenditures, youcan determine at any given time the amount ofworking capital that is available to you for buy-ing. Generally, you should maintain this recordon a monthly basis. You should always make cer-tain, however, that the record is updated beforeyou initiate any procurement action. The pro-cedures for maintaining the Inventory ControlRecord for Ship’s Store Stock are discussedbelow. Refer to figure 4-1 while you review theseprocedures. Instructions for entries are discussedfor each line and caption.

Line and Caption

Date

A. AuthorizedInventory

B. AuthorizedIncreases

Instructions for Entries

Enter the period of timecovered.

Enter the value of thenumber of personnel times$54. (The same amountwill be used for eachmonth of the accountingperiod.)

For deployed ships:

1. Enter the value of thenumber of personnel times$18 times the number ofmonths remaining in thedeployment.

2. Enter the dollar value offoreign merchandise stockon hand from NEX fleetsupport warehouses.

3. Enter the dollar value ofcanned drink stock for a90-day sales period.

For service-type ships:

4. Enter the value of thetotal number of additional

Line and Caption Instructions for Entries

B. AuthorizedIncreases—Continued

C. Total Author-ized Inventory

D. BeginningInventory

E. Receipts

F. Surveys toNSF andIssues toShip’s Use

G. Other Expend-itures

personnel on the ships thatare supported by the serviceship times $10.

Enter the total of line Aplus line B.

For the first month of eachaccounting period: Enterthe actual physical inven-tory at cost price.

For the other months of theaccounting period: Enterthe value of the balanceinventory (line H) from theprevious month.

Enter the value of allreceipts of ship’s storestock for the month astaken from the Journal ofReceipts, NAVSUP 977.

Enter the value of allsurveys to the Navy StockFund and issues to ship’suse.

Enter the grand total of allof the following items:

1. The value of all otherexpenditures (except thoseincluded in line F) as takenfrom the Journal of Ex-penditures, NAVSUP 978,

2. The value of cost ofoperations issues as takenfrom the Ship’s StoreAfloat Financial ControlRecord, NAVSUP 235.

3. The value of drink vend-ing machine sales as takenfrom Cost of Sales, line R,on the Vending MachineControl, NAVSUP 236.

4. The cost of all otherretail sales, including salesfrom retail stores and snackbar sales (other than those

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Line and Caption Instructions for Entries

G. Other Expend- from drink vending ma-itures—Con- chines). Compute the valuetinued of all other retail sales by

using this formula:

Total value of all otherretail sales as taken fromfrom the Cash from Re-tail Sales on the Memo-randum Cash Sales Invoicetimes 87% equals the es-t imated cost o f re ta i lsales.

(Specific examples areincluded in your NAVSUPP-487.)

You should note that thisformula is based on astandard markup over costof 15% for a ship’s store.The estimated cost of anitem will equal the retailprice of the item times87%. For example:

Actual cost of item $100.00times 15% markup 15%equals the retailprice of the item. $115.00

Retail price of item $115.00times 87% 87%equals the estimatedcost price. $100.05

H. Balance For the first 3 months of theInventory accounting period:

Enter the value of the be-ginning inventory at costprice plus receipts minusexpenditures (line D plusline E minus line F minusline G).

For the last month of theaccounting period:

Enter the actual physicalinventory at cost price.

Line and Caption

I. Over/Under Inventory

J. OutstandingOrders

K. Monies Avail-able for NewStock

Stock Turn

Instructions for Entries

Enter the total value of thetotal authorized inventoryminus the balance inventory(line C minus line H). Thisamount indicates whether ornot your ship’s store stock isover or under authorized in-ventory levels.

Enter the total value of alloutstanding orders for ship’sstore stock, as taken fromthe Outstanding PurchaseOrder File (SSA-11A) andOutstanding Requisition File(SSA-12).

At no time should thebalance inventory plus theoutstanding orders exceedthe total authorized inven-tory.

Enter the amount over/under inventory minus theoutstanding orders (line Iminus line J). This amountrepresents the money avail-able to you to buy newship’s store stock.

The cumulative value ofother expenditures (exclud-ing surveys to the NavyStock Fund and issues toship’s use) divided by thebeginning inventory for theaccounting period equalsstock turn.

Note that the followingformula must be used for thecomputation of stock turn:

Add the amounts recordedon line G for each monthdivided by line D for the firstmonth equals stock turn.

Inventory Control Record forStandard Navy Clothing Stock

As mentioned earlier, standard Navy clothingstock in the ship’s store normally requires a

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separate inventory control record. Procedures forline and caption entries are described below. Youshould refer to figure 4-2 as you read the instruc-tions below.

Line and Caption Instructions for Entries

Date

A. AuthorizedInventory

B. AuthorizedIncreases

C. Total Author-ized Inventory

D. BeginningInventory

E. Receipts

F. Surveys toNSF andIssues toShip’s Use

G. Other Expend-itures

Enter per iod o f t imecovered.

Enter the value of the salesfor the previous fiscal yeartimes 25%.

Enter the amount necessaryfor the number of monthsremaining in the deploy-ment.

Enter the total of line Aplus line B.

For the first month of eachaccounting period:

Enter the actual physi-cal inventory at standardprice.

For the other months of theaccounting period:

Enter the value of thebalance inventory (lineH) from the previousmonth.

Enter the value of allreceipts of standard Navyclothing for the month, astaken from the Journal ofReceipts, NAVSUP 977.

Enter the value of allsurveys to the Navy StockFund and issues to ship’suse.

Enter the value of Cashfrom Standard Navy Cloth-ing Sales from your Memo-randum Cash Sales InvoiceDeposit of Cash withthe Disbursing Officer,DD 1149.

Line and Caption Instructions for Entries

H. BalanceInventory

I. Over/UnderInventory

J. OutstandingOrders

K. Monies Avail-able for NewStock

Stock Turn

For the first 3 months ofthe accounting period:

Enter the value of the be-ginning inventory at stand-ard price plus receiptsminus expenditures (lineD plus line E minus line Fminus line G).

For the last month of theaccounting period:

Enter the actual physicalinventory at standard price.

Enter the total value of thetotal authorized inventoryminus the balance inven-tory (line C minus line H).

This amount indicateswhether or not standardNavy clothing is over orunder your authorizedinventory levels.

Enter the total value of alloutstanding orders forstandard Navy clothing, astaken from the OutstandingRequisition File (SSA-12).

At no time should thebalance inventory plus theoutstanding orders exceedyour total authorized in-ventory.

Enter the amount over/under inventory minus out-standing orders (line Iminus line J). This amountrepresents the money avail-able to you to buy newstandard Navy clothingstock.

The cumulative value ofother expenditures (ex-cluding surveys to the NavyStock Fund and issues toship’s use) divided by the

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Line and Caption Instructions for Entries

Stock Turn— beginning inventory for theContinue accounting period equals

stock turn. The followingformula must be used:

Add the amounts on line Gfor each month divided bythe beginning inventory forthe accounting periodequals stock turn.

In summary, the inventory control records canprovide only a calculated approximation. Therecords can, however, help you to keep your ship’sstore inventory values within the prescribed,authorized 90-day limits.

STOCK RECORD REVIEWAND MAINTENANCE

Stock record review is the second stock con-trol tool that is available to you as a ship’s storemanager. While you will use the inventory con-trol records to ascertain the amount of workingcapital that is available to you at any one time,you will also use the Stock Record (NAVSUPForm 464) to acquire the sales history and order-ing information you will need for procuring in-dividual stock items. You must review your stockrecord cards at least once a month to determinewhat specific merchandise items you should pro-cure. For most items, your maximum stock posi-tion should be 90 days’ stock. You should stockenough deployed load items so that they will beavailable for the duration of your ship’s deploy-ment. If you discover that excesses exist incertain areas, you should dispose of the excessstock as soon as you can. The various methodsyou can use to dispose of excess stock will bediscussed later in chapter 5.

By properly maintaining a Stock Record(NAVSUP 464) for every item of ship’s storestock, you, as the ship’s store manager, shouldbe able to answer the following questions aboutany particular stock item.

What are the average 4 months’ sales?

What quantities were ordered previously?

What is the usual source of supply?

What are the current cost and retail prices?

Is there any trend in the sales pattern?

Assuming normal sales, what is theapproximate stock situation?

Since the stock record cards are so important,you must maintain them accurately and neatly.The proper maintenance of stock record cards isdiscussed in Ship’s Serviceman 3 & 2, module 2.There are two types of errors for which you, asa supervisor (or auditor), should be on the alert:mechanical and procedural. As you read aboutthese errors, you should refer to figure 4-3.

Mechanical Errors

A mechanical error results when facts andvalues have not been properly recorded. In yourcontinual review of your stock record cards, youmay be able to correct most mechanical errors byasking yourself these questions.

The low limit: Is it recorded? Is it realistic?

The cost price and the selling price: Dothey exist where applicable? (There are no sell-ing prices for cost items.) Is the cost pricerounded to the nearest cent?

Unit of issue: Is it recorded? Do cost andselling prices agree with the unit of issue?

Functional account and department: Is thecorrect information recorded?

Description: Is it complete? Does itinclude the stock number (when required), thesize, and the noun name? (For example, tax-freecigarettes; large, economy, or giant toothpaste.)

Arithmetic: Have computations been madeaccurately? Have retail sales been properlycomputed?

Format: Have lines been skipped un-necessarily? Are the correct columns being used?

Procedural Errors

Procedural errors are usually the result of badplanning and faulty judgment. You can avoidmany procedural errors by carefully analyzing theinformation on your stock record cards. You

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Figure 4-3.—Auditing the Stock Record.

should carefully consider the following possi-bilities.

Are orders being placed too frequently andfor quantities that are too small? Haveunnecessary orders been placed?

Is the store out of any item of stock?

Is there too much stock of any individualitem on hand?

Are there any unauthorized items onboard?

Is the markup too high to effect stockmovement?

Are seasonal item considerationsmade and used?

Are the stock record cardsalphabetically by category?

wisely

filed

In summary, you, as a ship’s store manager,Are there too many competing items? must skillfully use the inventory control records

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and the monthly stock record review if you aregoing to maintain effective stock control of allyour ship’s store merchandise and supplies.Remember, the goals of stock control are to main-tain an optimum stock level of 90 days’ supplyand to achieve a sales-stock ratio of 1.33 to 1.You should consult your NAVSUP P-487 andNAVRESSO P-81 for authorized stock items andtheir recommended quantities.

STOCKING THE SHIP’S STORE

When it comes to actually selecting merchan-dise for stock, you must consider several factorsso you can provide your customers with a satisfac-tory selection.

CREW PREFERENCE

As a senior Ship’s Serviceman, you shouldalways be alert to the preferences of your crewmembers. You should frequently question theship’s store operator as to the over-the-countercomments of crew members concerning the ship’sstore merchandise. But, you should also in-formally or formally (by means of a question-naire) seek the opinion of individual crewmembers.

TECHNICAL ASSISTANCE

In addition to the preferences and responsesof your customers, you also have a considerableamount of technical assistance available to youfor the selection of your ship’s store merchandise.

NAVRESSO Publication No. 81

You should use this publication to supplementthe information in your NAVSUP P-487. Itemsin NAVRESSO Publication No. 81 are basedupon consumption factors per person per month,which were derived from an analysis of actualsales for an 8-month period (deployed and in port)in ship’s stores. (These data were received fromvarious hull types which include both Atlantic andPacific Fleet ships.) Consumption data forNAVRESSO P-81 will be collected periodicallyand the results of future analyses will be shownin terms of support for 90 days for various com-plements. Multiples of quantities shown shouldbe used to arrive at the quantities to be stockedfor your individual ship.

Your NAVRESSO Publication No. 81 alsocontains the following information.

Denotes inventory limitations

Discusses the five Rs of retail merchandis-ing

Lists do’s and don’ts of sales and salespromotion

Provides popularity percentages for broadcategories of items, such as candy andshaving cream

Recommends stocking plans for ship’sstores afloat (90-day stock)

As mentioned before, the maximum dollarvalue of ship’s store stock that you carry on yourship should not exceed 54 times your currentofficer and enlisted allowance, including em-barked staffs, embarked air groups, Marine Corpsdetachments, and passengers, or the highestonboard personnel count, whichever is greater.This calculation will allow for a 90-day supply ofstock. Remember, there are items that are called“never-out” items and should be maintained instock at all times. These items are identified inyour NAVRESSO P-81. Pay close attention toyour never-out list and the recommendations inNAVRESSO P-81, and make all changes asneeded. In fact, your development and main-tenance of a basic stock list will provide you withan essential management tool you can use to pro-mote an effective ship’s store.

Many of the luxury and semiluxury types ofitems (watches, jewelry, and so forth) are listedin your Ship’s Store Afloat Catalog (SSAC). Thebuying guides contained in your SSAC will specifytypes, brands, colors, or other details you musthave to complete an order. Your SSAC is con-stantly being updated with new styles and typesof items to make it easier for you to keep yourstore updated.

Consolidated Afloat RequisitioningGuide Overseas (CARGO)

Whenever your ship is deployed, you must useyour Consolidated Afloat Requisitioning GuideOverseas (CARGO) to requisition standardlaundry chemicals and standard Navy clothingstock. You will find that the national stocknumbers are listed in chapter 2 of the CARGO.

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The CARGO also carries a list of ship’s storeitems that are of high use on ship’s store afloatstocking plans. When your ship is in CONUS, youwill use the nearest naval supply center (NSC).

NAVRESSO/Fleet AssistanceRepresentatives

Whenever you have problems in the procure-ment of certain stock items, NAVRESSO will pro-vide assistance to you upon request. You shouldsubmit a purchase order for money value only.NAVRESSO will take procurement action alongany lines you request and will forward the desiredmaterials to your ship.

You can also acquire technical guidance fromNAVRESSO’s fleet assistance representatives.Upon request, the master and senior chief pettyofficers NAVRESSO has positioned in port areaswill provide you with technical assistance for yourown procurement operations. As mentionedearlier, you can acquire NAVRESSO assistanceby telephone, by desk visits to the fleet assistanceoffice in your area, or by a written request foran advisory visit to be made to your ship.

You should consult your NAVSUP P-487 fora complete listing of fleet assistance offices andtheir locations. You should submit any writtenrequests for assistance by following the procedureslisted in NAVSUP P-487 and the instructions ofyour ship (or local command).

SHIP’S DEPLOYMENT

The next major factor you should consider instocking the ship’s store is the operationalschedule of your ship. You should carefullyanticipate the length of deployment, the area ofoperation, holiday seasons, the weather in thearea, and other considerations before your shipactually departs from its home port. Normally,you can use past experience to prepare for adeployment. A 90-day supply of stock will usuallybe adequate.

Under special operating conditions oremergency deployment, stock increases are usuallynecessary for the following categories.

Confection and food products

Fountain supplies, if applicable

Smoking products and accessories

Stationery supplies

Barber, laundry, dry-cleaning, and tailorsupplies as required

Sundries

Toiletries

Vending machine supplies

When your ship is deployed to an overseasarea, you can increase your inventory in anamount necessary to stock sufficient quantities ofdeployed load items, as listed in your Con-solidated Afloat Requisitioning Guide Overseas(CARGO).

As mentioned earlier, when your inventorylimitation is increased, as authorized by specialoperating conditions or by deployment, you mustforward a letter report to NAVRESSO, with acopy to the type commander. The report mustcontain the following information.

Monetary value of the increase

Reason for the increase

The period for which the increase is taken

Number of personnel on board

The increase should be included in the inventorycontrol records in the Authorized Increase col-umn. Remember, your inventories will generallybe maintained at the prescribed levels unless anincrease is otherwise authorized in support of theoperational needs of your ship. For additionalinformation on authorized increases, consult yourNAVSUP P-487.

PROCUREMENT RESOURCES ANDMETHODS FOR SHIP’S

STORE STOCK

In previous sections, you have read how todetermine what merchandise is authorized, howto maintain effective control of stock, and howto use various resources including technicalassistance to help you decide what to order. Onceyou have made those decisions, your problem thenbecomes one of deciding how and from whatsource you should procure the merchandisedesired.

As a senior Ship’s Serviceman, you will beexpected to assist the ship’s store officer

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to choose the appropriate source of pro-curement—the source from which the desiredmerchandise will be available and accessible.Figure 4-4 provides a chart of procurementsources along with the merchandise available fromthose sources, the documents to be used, and themethods of payment. There are three primaryprocurement sources for ship’s store items in theUnited States.

SHIP’S STORECONTRACT BULLETINS

You can use the Ship’s Store Contract Bulletinfor your area to fulfill almost all requirements forship’s store stock items for use within the con-tinental United States and Hawaii. You will findlocal sources and fixed prices for authorized itemsof ship’s store stock indicated in the Contract

SOURCE DOCUMENT MERCHANDISE BILLS PAID BY

Contract Bulletin DD 1155 Necessities; Basic FAADCLANT orDeliver Order items; Cost items. FAADCPAC as

U.S. only appropriate

Ship’s Store Afloat DD 1155 Luxury items; semi- FAADCLANT orCatalog Purchase Order luxury items. FAADCPAC as

appropriate

Ashore supply ac- DD 1348 (4 PT) Navy clothing; some No Payment—tivities (NSC/NED) cost items; some re- transfer between

cessity items (West- supply officers.Pac only).

Other ships (Excess DD 1348 (6 PT) Any items agree- No Payment—stock) DD 1149 able to both parties. Transfer between

supply officers.

Resupply sources Prescribed by SERV- Some necessity items. No Payment—(AOEs/AFs/AORs) FORCOM Transfer between

supply officers.

Overseas Contract DD 1155 Foreign merchandise As directed byBulletin SERVFORCOM.

Navy Exchange DD 1155 Any authorized items AppropriatePurchase Order when other sources FAADC

unavailable; Foreignmerchandise is West-Pac.

Civilian Market DD 1155 Any authorized item Appropriatenot avai lab le in FAADCSSAC, contract bul-letins, or ashoresupply activity.

Other Appropria- DD 1149 Any authorized items No Payment—tions Transfer between

appropriations.

Figure 4-4.—Merchandise procurement resources and methods.

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Bulletin. By using the Contract Bulletin, you canplace orders directly with a vendor. You shoulduse an Order for Supplies or Services/Request forQuotations (DD 1155) as the purchase order.

When you are placing oral orders for ship’sstore stock, the DD 1155 must be prepared andsigned before you release the purchase ordernumber to the vendor. For correct procedures oncopy distribution, check your NAVSUP P-487.Remember, Fast Pay or Certificate of Conform-ance procedures apply to orders placed under anycontract awarded by the Navy Resale and ServicesSupport Office.

SHIP’S STOREAFLOAT CATALOG

You can fill most requirements for non-necessity luxury items by using the Ship’s StoreAfloat Catalog (SSAC), This catalog, which isissued by the Navy Resale and Services SupportOffice, contains descriptions and purchase infor-mation for authorized items of ship’s store stock.The Ship’s Store Afloat Catalog is provided foruse in the purchase of stocks by ships that areoperating ship’s stores. You should use the Orderfor Supplies or Services/Request for Quotations(DD 1155) as a purchase order, and you must notexceed $10,000 per purchase order.

When you are processing merchandise throughthe SSAC, you should prepare the DD 1155 justas though you were procuring merchandisethrough the Ship’s Store Contract Bulletin. Yourpurchase orders must be issued directly to thevendors who are listed in the SSAC. When youare placing oral orders, your DD 1155s should beprepared and signed before you release the pur-chase order numbers to the vendor. Remember,any orders that exceed the specific monetary limitmust include the Defense Acquisition RegulationClause. (Refer to your NAVSUP P-487 for thecorrect notations and for the current monetarylimit.)

During the periods your ship is deployedoverseas, you will use the parcel post systems fordelivery of any merchandise you order throughthe SSAC. All merchandise will be subject toparcel post size and weight limitations. (Checkyour NAVSUP P-485 for the correct up-to-datespecifications.)

ASHORE SUPPLY ACTIVITIES

As part of the Navy supply system, ashoresupply activities exist to provide supply support

to your ship as well as to other components ofthe operating forces. You, as a senior Ship’sServiceman, will most likely come into contactwith an ashore supply activity when you are pro-curing Navy clothing, standard stock, and laundrysupplies for your ship’s service activities.

Standard Navy Clothing

Normally, Navy clothing is the only ship’sstore merchandise you will procure from anashore supply activity located in the United States.The number of requisitions that you will submitto the local naval supply center or depot for yourship’s store will depend primarily on the range anddepth of Navy clothing items that you are requiredto stock. The quantity of Navy clothing to be car-ried on your ship is usually specified by fleet ortype commander directives. The quantity may alsodepend on your ship’s schedule, its proximity toashore clothing outlets, and the desires of thecommanding officer. You should submit requisi-tions according to military standard requisition-ing and issues procedures (MILSTRIP). You canfind detailed instructions on the preparation ofa DD 1348 in your NAVSUP P-487 and also inthe Ship’s Serviceman 3 & 2, module 2. Since thistype of procurement is considered to be a transferbetween supply officers, there is no payment pro-cedure as such.

Unusual Sizes of Navy Clothing

Unusual sizes of Navy clothing items are thosesizes that are not listed in the Afloat ShoppingGuide (ASG). You should special order suchclothing or footwear from the nearest supplyactivity. The appropriate documents for this typeof procurement are the Armed Forces Measure-ment Blank (Special Sized Clothing for Men) (DD358) and the Special Measurement Blank forSpecial Measurement/Orthopedic Boots andShoes (DD 150). Your ship will receive specialordered clothing directly from the Defense Per-sonnel Support Center or the Defense OrthopedicFootwear Clinic.

In addition to the primary sources, there area number of methods and resources you can useto procure stock for your ship’s store. A few ofthese methods and sources are discussed below.

TRANSFERS

You can procure ship’s store merchandiseeither by purchase from a commercial source or

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by transfer. A transfer of stock takes placewhenever you submit a requisition to an ashoresupply activity, another naval vessel or supplyofficer, another military organization, anothergovernment agency, or another department orsection of your own ship.

From Other Supply Officers

In procuring ship’s store stock, you canrequisition authorized items of ship’s store stockfrom another supply officer. The stock may beavailable to your ship for a variety of reasons.Often, a ship may order a ship’s store item forseveral ships, including yours, to meet theminimum order requirements of the vendor or toget the lowest price offered. For example, a shipmay order 200 cigarette lighters with divisioninsignia with the intention of transferring 50 ofthe lighters to each of the other three ships in thedivision. You can accomplish a transfer of stockto your ship’s store by preparing and submittinga DD 1348 following procedures described in theMILSTRIP or a DD 1155 following proceduresdescribed in NAVSUP P-487.

From Excess Stock Lists

Afloat commanders or supply activities incertain areas publish lists of excess ship’s storestock on ships within their command or area. Ifan item you desire is on such a list, you shouldprepare a requisition against the list as your firstprocurement action. You should always try toacquire ship’s store stock from the excess stocklists before you attempt any other method of pro-curement. The procurement of excess stock isaccomplished as a transfer between supplyofficers.

From Resupply Sources

When your ship is deployed for an extendedperiod, various other sources of procurement maybe available to you. While you can use the SSACanywhere in the world for procurement of ship’sstore stock, you should remember that deliveryfrom Contract Bulletin suppliers will be limitedto the coast and zone specified by the area con-tract bulletin. Some of the items supplied fromthe contract bulletins are deployed load itemswhich are stocked in sufficient quantities to lastthe duration of the deployment before the shipactually departs for overseas. However, if addi-tional load items are needed while the ship is

deployed, the items are available from fleet issueships. You should submit requisitions to resupplyafloat sources by following fleet or force com-mander instructions. Generally, you shouldsubmit the requisitions in message format. Youcan find details on availability of various stockitems in your Consolidated Afloat Requisition-ing Guide Overseas (CARGO). The procurementaction takes place as a transfer.

From Other Appropriations

Certain items normally carried in Other Ap-propriations aboard ship are authorized for ship’sstore stock. Occasionally, you may require theseitems when normal ship’s store supply sources areunavailable. Some examples are CO2 g a s(operating target [OPTAR]), padlocks (OPTAR),and canned fruit juices (general mess). Such itemsmay be transferred to the Navy Stock Fund ona DD 1149 (Requisition and Invoice/ShippingDocument). Procurement of the stock takes placeas a transfer between appropriations. For currentdetails on the preparation and submission of theDD 1149, you should consult your NAVSUPP-487.

From Other Departments Aboard Ship

Occasionally, you may wish to procure ship’sstore stock from the enlisted dining facility. Forexample, you can obtain food items you requirefor the preparation of fountain products from theenlisted dining facility (general mess). You shoulduse a Requisition and Invoice/Shipping Document(DD 1149) for this transaction. Check your NAV-SUP P-487 for details for preparing and sub-mitting this document. The procurement actiontakes place in the form of a transfer betweendepartments.

PURCHASES

If you can not acquire ship’s store merchan-dise by transfer, you must then consider procure-ment by purchase. In addition to the resourcesdiscussed earlier in this chapter, the followingsections will provide you with some resources,methods, and considerations you may wish to usein the procurement of ship’sby purchase.

Overseas Contract Bulletins

As was mentioned earlier,tract bulletins prepared by

store merchandise

ships may use con-Navy purchasing

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offices overseas. The bulletins themselves aresimilar in appearance to the SSAC with illustra-tions and specifications shown for most of themerchandise. Orders should be prepared and sub-mitted in exactly the same manner as they are formerchandise ordered through the U.S. area con-tract bulletins. Delivery will be made by thevendor directly to the ship or pier. Dealers’ billsshould be paid according to instructions providedby the fleet or force commander.

Simplified Requisition andPurchase Procedure

Occasionally, you may find that an item youdesire for your ship is not listed in either theContract Bulletin or the SSAC. The item maybesomething that a crew member has requested ora new product that a vendor has brought to yourattention. As long as the item has been authorizedfor ship’s store stock, and the purchase value doesnot exceed $10,000 or the current unit cost limita-tion, you can procure the item for the ship’sstore.

You must prepare an Order for Supplies orServices/Request for Quotations (DD 1155)for this stock instead of the Requisition andInvoice/Shipping Document (DD 1149). (YourNAVSUP P-487 gives specific information on thepreparation and submission of the DD 1155.) Youmust then submit the DD 1155 to the nearestNavy Resale and Services Support Office fleetassistance team for screening and processing. Thepurchasing department of the supply activity willthen negotiate a contract by completing theDD 1155 and by having the merchandise shippedto your ship or made available for your pickup.You should not use this procedure if a similar andacceptable item is available to You in the officialprocurement publications.

exchanges should be taken up as Receipts fromPurchase on all applicable records. Bills renderedby the Navy exchanges must be certified as toreceipt and acceptance of material in the samemanner as commercial dealers’ bills. Refer to yourNAVSUP P-487 for details on the documentdistribution and payment procedures for this typeof purchase. You should also refer to your NAV-SUP P-487 for additional details on proceduresyou can use to procure foreign merchandisethrough your Navy exchange.

Cash Purchases

Under emergency conditions and when thesuppliers will not accept the Order for Suppliesor Services/Request for Quotations (DD 1155),the imprest fund may be used to purchase costof operations items such as buttons and zippers.Your use of the imprest fund must be in accord-ance with your NAVSUP P-485. Procurementprocedures for cash purchases are outlined in yourNAVSUP P-487. You should consult bothpublications before you take any procurementaction for this type of purchase.

Open Purchase

As a general rule, you should NEVER use thisprocurement method. Supply management inspec-tions (SMIs) are continually uncovering discrepan-cies associated with the misuse of the openpurchase method. You must avoid the openpurchase method of procurement for ship’s storestock except in cases of emergency as defined inthe NAVSUP P-487. If you attempt to use thisprocurement method outside the guidelines setforth in NAVSUP P-487, you will eventually getcaught by an SMI audit, Illegal use of the openpurchase method for procurement of ship’s storestock is simply a risk you cannot afford to take.

Navy ExchangesDealing with Sales Representatives

When the procurement sources discussedearlier are not available to you, you can purchaselimited quantities of authorized items of ship’sstore stock from Navy exchanges. You should usean Order for Supplies or Services/Request forQuotations (DD 1155) for this type of transaction.On the DD 1155, you must cite the paragraphnumber listed in your NAVSUP P-487 in theblock labeled Contract No. Purchases from Navy

Most vendors listed in the Contract Bulletin(and many who are not listed) have sales repre-sentatives who visit the various ship’s storeoffices during in-port periods. The first threepeople you will see on your quarterdeck when youreturn to port will usually be ship’s store salesrepresentatives. When, if, and how your officechooses to deal with commercial salespersons will

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be up to the ship’s store officer and often theleading Ship’s Serviceman.

Good sales representatives can assist yougreatly in the submitting of orders and the timelydelivery of merchandise. When you are gettingunderway on a few hours’ notice, having contactswith the right sales representatives can be crucial.Salespeople can also introduce you to new itemson the market that may indeed be an asset to yourship’s store.

Other commercial sales representatives,however, may not be quite so helpful. They maytry to sell you overpriced merchandise of poorquality. They may load your desk with freesamples and offer kickbacks as an inducement foryou to buy. They may even try to influence youwith name-dropping of respected persons ororganizations. Representatives may offer to wineand dine you on the beach and provide you withvarious other pleasures to create an obligation onyour part.

POLICY.— Just what can you do to avoidproblems with commercial salespersons? Well,your office could just choose to avoid salesrepresentatives. However, this would mean asacrifice of the benefits for the ship’s store thatmight have resulted if your ship’s store officer hadchosen to deal with commercial representatives.Perhaps your office should set aside a certain dateand time in which the ship’s store officer, theShip’s Serviceman in charge of procurement, oryou, the leading Ship’s Serviceman, might see thesales representatives. Make this time known to thequarterdeck and to the sales representativesthemselves. This method would prevent continualinterruptions of your other duties. Also, beparticularly careful when you are procuringmerchandise, especially luxury-type merchandise,that is unlisted in the bulletins or catalogs. Useyour official publications for determining therequirements for luxury items. Above all, don’taccept gifts or favors.

STANDARDS OF CONDUCT.— The De-partment of Defense directive that sets forth thestandards of conduct applicable to Departmentof Defense (DOD) personnel strictly prohibitsNavy personnel from accepting (either directly orindirectly) any favors, gratuities, or entertainmentfrom persons, firms, or corporations with whomthey do business whenever the favors, gratuities,

or entertainment could possibly be interpreted asan influence on objectivity and impartiality ofDOD personnel. You can find the DOD Stand-ards of Conduct in the appendixes of thisRTM, in your NAVSUP P-487, and in Ship’sServiceman 3 & 2, module 1, appendix 1.You must comply with the Standards of Conductat all times whenever you are dealing withcommercial sales representatives. In addition,firm policy should be established by your ship’sstore officer in regard to dealing with commer-cial salespersons. You should make yourself awareof this policy.

AUDITING PROCUREMENTRECORDS

As was mentioned in chapter 3 of thistraining manual, one of the primary respon-sibilities of the senior Ship’s Serviceman isassisting the ship’s store officer in an auditof the ship’s store records and returns. Itis important for you to audit periodically ratherthan just at the end of the quarter. Therefore,you should frequently review all procurementdocuments for accuracy, proper format, andcorrect distribution.

PURCHASE OPERATION REVIEWS

A review of the purchase operation of eachactivity that has been given purchase authoritymust take place at least every 18 months. Thereview should be conducted by the cognizant typecommander; the Commander, Construction Bat-talion, U.S. Atlantic Fleet; or the Commander,Construction Battalion, U.S. Pacific Fleet. Thereviewer must make certain that proper purchaseprocedures and practices have been followed. Thereviewer also provides guidance and assistance asneeded. The reviews can be a part of yourregularly scheduled supply management inspec-tions (SMIs).

PROCUREMENT DOCUMENTREVIEWS

In your career as a Ship’s Serviceman, youhave probably encountered the foul-ups that resultwhen someone fails to take the time and effortto prepare a procurement document correctly.

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Many of the errors that occur on procurementdocuments and the hassles that result fromthese errors can be avoided. However, when-ever errors do appear, you, as a senior Ship’sServiceman and as an auditor, must be ableto spot them, to correct them, or to bring themto the attention of someone else who will resolveany confusion.

As an auditor, you should establish a systemfor checking the format of the information con-tained in a procurement document with thatindicated in the procurement catalog or bulletinor in your official publications. You can find thedetailed steps for preparing procurementdocuments in the Ship’s Serviceman 3 & 2, module2, and in your current NAVSUP P-487.

Figure 4-5.—Auditing a procurement document.

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Figure 4-5 shows several of the checks youshould make when you are reviewing a standardprocurement document. In some cases, you willbe required to use a somewhat different formator an additional statement on the procurementdocument. For example, you must include aspecific statement on all special orders. Ifyou are preparing a DD 1155 and the valueof the stock is over a certain monetarylimit, you must include another statement tothat effect. You must also place specificstatements on all purchase orders coveringitems that you procure on a guaranteed salesbasis. Similarly, when you are preparing docu-ments for bonus-free items, you must makecertain that applicable statements appear onthe procurement documents. Also, when youare using the simplified requisition and pur-chase procedure, the format of the purchaseorder will be different from that of your regularDD 1155.

You, as a senior Ship’s Serviceman, must bealert for all variations in the procurementdocuments used for your ship’s store. Whenever

possible, you should also make the recordskeeperaware of these variations.

DISTRIBUTION

You can find the correct distribution of theoriginal and copies of a procurement documentin the NAVSUP P-487 and in the appendixes ofthis rate training manual. As an auditor, youshould frequently check to see if proper distribu-tion is being accomplished, especially at the timethe procurement documents are submitted to thevendor or to the supply activity. (These supplysources must have the correct number of copiesto complete your order.) One copy should alwaysbe routed to the receiving storekeeper for thestorekeeper’s incoming material file.

MAINTENANCE OF LOGS

Finally, you should guarantee that all pro-curement documents are logged to the requisitionlog (figure 4-6) or to the purchase order log

Figure 4-6.—Requisition log.

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figure 4-7). At the time of purchase, the purchaseorder log should contain the date of the order,the serial number, the source, and the approxi-mate dollar value, as shown in figure 4-7. The logsare helpful only as long as postings are madepromptly and accurately. The Amount columnwill be extremely helpful to you when you needto determine the value of outstanding orders forposting to the inventory control record. Note thedifference between the two date columns in figure4-6 and 4-7. The first date represents the date ofthe order; that is, the date the order was placedor made. The date received column represents thedate the stock was actually received by your ship.The logs will also assist you in checking out-standing and completed orders. Consult yourNAVSUP P-487 for additional examples of theseimportant logs.

PROCUREMENT OF EQUIPMENTAND OPERATING SUPPLIES

As a senior Ship’s Serviceman, you will be in-volved in the procurement of equipment andoperating supplies. Each of these areas is outlinedin your Ship’s Serviceman 3 & 2. You can alsofind detailed instructions for procurement ofship’s store equipment and supplies in the NAV-SUP P-487. The following sections are presentedonly as an overview.

MAJOR EQUIPMENT

The equipment that may be required aboardship for the resale and service activities is classifiedaccording to value as either major or minor equip-ment. Major equipment has a value greater than$100. One group of major equipment includes allmajor laundry equipment, barber chairs, cashregisters, and similar items. These are allowancelist items. They are controlled by the Naval SeaSystems Command (NAVSEA) and funded by theship’s OPTAR. Ship’s store profits should not beused for these items. The requisitions for this typeof equipment or the letter requests stating that anitem of this type be added to the allowance listshould be forwarded to NAVSEA via the typecommander, NAVRESSO, and NAVSUP.

The second group of major equipment in-cludes soft ice cream machines, vending machines,popcorn machines, amusement machines, andrelated items such as coin changers and coincounting devices. When you are ordering a newmachine of the second group of major equipment,

you must take certain preliminary steps, First, youare authorized to order only machines of the typesspecified by your fleet commander. Second, youmust request the authority from NAVSEA for theinitial installation or replacement of a machinewith a machine of a greater weight. After youreceive approval from NAVSEA, you must senda letter requesting procurement to NAVRESSO.You must make certain the letter contains thedetailed information specified in NAVSUP P-487.You should send directly to NAVRESSO any re-quests you might have for replacement machinesthat weigh the same or less than the originalmachine.

The procurement of machines in the secondgroup of major equipment is funded by Ship’sStore Profits, Navy (17X8723). If profits are con-sidered to be insufficient, you can obtain a “nointerest” loan from NAVRESSO to offset thecosts of the machine. Normally, you will be re-quired to make loan repayments within three orfive accounting periods, depending upon the sizeof your ship.

MINOR EQUIPMENT, OPERATINGSUPPLIES, AND SERVICES

As a member of the supply department, youwill be required to stand supply departmentwatches. To perform this duty properly, you mustunderstand certain functions of supply that gobeyond your rating and you must be capable ofperforming these functions. As the duty supplyrepresentative, you may be called upon inemergencies to perform a variety of jobs from theissuing of a repair part to the preparing of a re-quisition. In this section, the various methods andsources of procurement are briefly discussed. Youshould consult your NAVSUP P-485 (AfloatSupply Procedures) and the current editions ofStorekeeper 3 & 2 and Storekeeper 1 & C fordetailed information.

Procurement Methods

There are three basic methods by which a shipmay procure the supplies and services that itrequires.

1.

2.

3.

By submission of a requisition to an ashoresupply activityBy submission of a requisition to anothershipBy purchase from a commercial contractor

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Figure 4-7.—Purchase order log.

You can establish almost all of yourrequirements for operating supplies by submittinga requisition to an ashore supply activity whichwill either furnish the material or forward yourrequest to the appropriate activity for action. Inaddition, you can submit requisitions to otherships when your ship is deployed for extendedperiods at sea.

Just as in the procurement of ship’s storestock, you can also procure provisions, supplies,and services as a purchase from a commercial con-tractor. You will generally not use commercialcontractors for purchasing general stores materialand services.

You can find detailed instructions concerningMILSTRIP for the preparation of a DD 1348(DOD Single Line Item Requisition System Docu-ment) and the procedures for preparing a purchasedocument in your NAVSUP P-485 and in ratetraining manuals Storekeeper 3 & 2 and Ship’sServiceman 3 & 2, module 2.

Procurement Sources

Within United States waters, procurement ofsupplies by ships will normally be accomplishedvia the nearest naval supply center, supply depot,or supply activity. Only when there is no shoreactivity available to obtain material for immediateoperation can a supply officer obtain material(other than ship’s store stock) by purchase fromcommercial sources within U.S. waters.

When ships are deployed, the normal sourceof supply is the mobile logistics support force(MLSF). You can find specific requisitioninginformation for this procurement resource in theAtlantic and Pacific Fleet requisitioning guides.Also, you should carefully observe any instruc-tions by fleet commanders.

During visits to foreign ports, you can acquirelimited support and emergency support from thenaval activities located in that vicinity. In addi-tion, your ship’s purchase authority is expandedin foreign ports for the procurement of certainindigenous support and port services as required.

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PROCUREMENT ON SHIPS for each authorized item in the NAVSUP P-487WITHOUT SUPPLY CORPS and by conducting a monthly review of all stock

OFFICERS cards. You must stock in the ship’s store itemsof a consumable nature that are considered

If you are on a ship without a Supply Corps necessary in the day-to-day living of the crew. Ifofficer assigned, you can obtain effective stock you examine the separate authorized stock list incontrol by adhering to the stock limits prescribed the NAVSUP P-487, you should notice that ships

Figure 4-8.—Stock Tally.

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without Supply Corps officers are authorized tocarry confections, tobacco products, stationerysupplies, sundries, and toiletries. The quantityspecified opposite each item on the authorized listrepresents the maximum stock that you shouldcarry at any given time for 100 people for 90 days.You should compute the maximum stock that isauthorized for your ship based upon the numberof persons to be served by the ship’s store.

You should maintain Stock Tally (NAVSUP209) cards as shown in figure 4-8 rather than StockRecord (NAVSUP 464) cards for every item ofstock you carry. You should make a monthlyreview of all such cards. For each item, thenormal amount you should order at any time isthe difference between the balance on hand andthe carrying (high) limit plus the number on handyou estimate will be sold before the new order isdelivered. Whenever operations permit, youshould try to accomplish this type of stockreplenishment at least monthly.

If you are on an extended cruise and your shipdoes not have a Navy Postal Clerk aboard, youmay sell postage stamps in the ship’s store. Youmust sell these stamps at cost price. Procurepostage stamps only in the quantities you needto cover anticipated sales for the period of timein which your ship will not have U.S. PostalService facilities available.

On ships without Supply Corps officers,authorized items of ship’s store stock cangenerally be procured by any of the methodsused for ships with Supply Corps officers with theexception of Other Appropriations. (The categoryOther Appropriations generally involves transfersfrom the general mess, general stores, othergovernment departments, or the Marine Corps.)As mentioned previously, foreign merchandisethat appears in overseas contract bulletins maybe special ordered by the submitting of a requisi-tion to a ship carrying the desired item in stockor to the nearest purchasing activity ashore.

Requisitions for ship’s store stock should benumbered and prepared according to NAVSUPP-485. Such requisitions should be submitted ona DOD Single Line Item Requisition System Docu-ment (DD 1348) or a DOD Single Line ItemRelease/Receipt Document (DD 1348-1). Whenthe use of one of these forms as a single line itemrequisition is considered to be inappropriate, aRequisition and Invoice/Shipping Document (DD1149) should be used.

On ships without Supply Corps officers,only one file is maintained for all outstandingship’s store stock requisitions and purchaseorders. Also, only one requisition/receipt invoicelog is maintained, rather than two separate logs.Refer to figure 4-9 as an example of how this

Figure 4-9.—Requisition/receipt invoice log.

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comprehensive log is used. Refer also to yourNAVSUP P-487 for additional details.

Just as with all of the other broad respon-sibilities you will acquire as a senior Ship’sServiceman, you will find that your dutiesassociated with the procurement of merchandise,supplies, equipment, and services will be essen-tially continuous. Remember, all your procure-ment responsibilities will overlap—from themaintenance of accurate records to the orderingof stock items, supplies, and services. You mustunderstand the magnitude of these duties, for you

will be handling not only the ship’s funds but alsothe well-being of your organization and of everycrew member on board your ship. Your bestefforts to maintain optimum stock levels andaccurate records, to obtain the goods and servicesrequired by your ship’s personnel, and to providea well-organized ship’s store and service opera-tion will pay off in terms of increased customersatisfaction, greater financial accountability, andfewer hassles from discrepancies and specialaudits. You will also experience the self-satisfaction of having successfully accomplisheda very demanding and complicated job.

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CHAPTER 5

RECEIPTS AND EXPENDITURES

As a senior Ship’s Serviceman, you will haveimportant responsibilities in the areas of receipt,stowage, and expenditure of ship’s store stock.It will be your goal to plan all these proceduresso they are done efficiently and accurately.

RECEIPTS

Receiving ship’s store stock on board generallyincludes preparation, inspection, relocation,stowage, processing, posting of records, and pay-ment of dealers’ bills. Proper receipt of materialis vital in establishing and maintaining control ofthe ship’s store operation. From the time mer-chandise is ordered until it is safely stowed andshown on applicable records, you must assist theship’s store officer in making certain all propercontrol procedures are carried out.

PREPARATION FOR RECEIPT

Before the actual receipt of merchandise, thereare several matters that must be supervised.Proper attention to each of these matters will helpyou to ensure that an efficient receipt procedurewill take place.

Date and Time of Delivery

Nothing could be more embarrassing for aship’s store division than to see a truck that iscarrying the cigarette, cigar, and pipe tobaccoorder drive up the pier just as the line is beinghauled in before the ship’s departure from port.When you are selecting a day for delivery, youmust consult the ship’s operating schedule.Dates of arrival and departure from port areseldom desirable because of the increasedworkloads on other departments. You will findit difficult to get working parties and to allow forthe possible difference between the actual andplanned time of the ship’s movements. Youshould also avoid days of inspections along with

weekends and holidays. In addition, you shouldcarefully observe the daily work schedule to finda time of delivery that will not interfere with thecrew’s meal hours or liberty. Finally, you mustmake certain the supply personnel required forthe actual receipt will be available.

Authorized Inspection

Before receipt of the merchandise, anauthorized inspector, either the ship’s storeofficer or a designated representative, will beassigned. The job of the inspector will be to pro-ceed to the pier with copies of the procurementdocument from the Outstanding Purchase OrderFile or Outstanding Requisition File and to inspectthe merchandise carefully for quantity andcondition.

Working Party

Before the delivery of the merchandise, youshould notify the executive officer as to thenumber of personnel you will need for a workingparty. The number of personnel to be assignedwill be based on your estimate of the amount ofmaterial to be received and the amount ofhandling that will be needed to move the materialbelow decks. If possible, you should use person-nel from your own department. Since, in mostcases, ship’s store stock is highly pilferable, youwill be able to maintain control of the stock moreefficiently by using your own people in the work-ing party.

Routing Plan

You should design a routing plan in advanceso material can be moved to its destination asquickly as possible and with maximum security.In the case of large receipts, your own people willusually be assigned as checkers and spotters. Yourpeople should know in advance if they are to helpcheck material on the pier or to stand at key places

5-1

throughout the ship to guide the material alongthe prearranged route to the correct storeroom.

Bulk Storeroom

The storerooms should be prearranged beforethe receipt. This task includes making room forthe incoming material, general straightening andrearranging of stock into like groups, and mov-ing materials to allow for the rotation of old stock.At the actual time of receipt, the bulkroom custo-dian should be standing by at the bulk storeroom.

SUPERVISING RECEIPTS

The ship’s store officer or you, as a leadingpetty officer, must always be on hand to super-vise the unloading of ship’s store stock, whetherdelivery is being made from a truck, helicopter,or highline transfer. Although deliveries aregenerally made in a routine manner, there areoccasions when cargoes must be transferred onthe open sea during rough weather or under someother difficult circumstance. It is this type of situa-tion that will tax your skill and experience to thefullest. You will not have time to look up theanswers in the NAVSUP P-487 when you arebesieged by questions from a 20-man workingparty or when you are trying to assort a handfulof invoices on a wet, heaving deck. In cases likethese, it always pays to know your job, and toknow it well.

Receipts On Board Ship

As the ship’s store stock arrives, thequarterdeck notifies the sales office and calls awaythe working party. You, as the authorizedinspector and/or supervisor, must proceed to thepier with copies of the procurement document.

When stores are delivered in large quantities,they are usually stacked on the deck or the pieruntil the packages can be identified, counted, andchecked against the shipping papers. It is here thatyou should have the piles sorted into lots. Makecertain you direct the working party to place thematerial in a relatively quiet spot. The checkingprocess will take some time. You will not wantto deal with the complaints that you will surelyreceive if you block a busy passageway with largequantities of assorted packages. In bad weather,you should have tarpaulins on hand to protect thestock from rain and salt spray while the inspec-tion is in progress.

After you have identified the items andassorted them into the proper groups, you shouldcount them and compare the quantity receivedwith the amounts shown on the shipper’s invoiceand the file copy of the original invoice. Forreceipts from commercial sources, you shouldcheck the quantity of each item received againstthe quantity ordered in block 20 of the DD 1155.If the quantity received and quantity ordered arein agreement, just circle the quantity ordered/received. If they are not in agreement, you willhave to enter the quantity actually received andcircle it. You should then sign and date the DD1155 in block 26 and and check the appropriateblocks. The DD 1155 (Ship’s Store) does notbecome an actual receipt document until you havecompleted these actions. For merchandise receivedfrom other supply officers, you should circle thequantity received and then sign and date the docu-ment. Next, you should have the boxes numberedand struck below in numerical order. Numberingthe boxes in this manner will make it easy for youto determine if a box is missing when the stockis delivered to the storeroom. After all the materialhas left the pier or dock, you should forward thesigned documents to the ship’s store officer.

When the material reaches its final destination,it should be checked by the responsible custodianto be sure all boxes have arrived and are un-opened. The custodian must count all the mer-chandise and note the quantity received just asyou did when the stock first arrived. For receiptsfrom commercial sources, the custodian shoulduse the copy of the procurement document heldin the Incoming Material File. For receipts fromother supply officers, the custodian should use acopy of the DD 1348 or DD 1348-1 (automatedactivities) that accompanies the received material.Instead of certifying the documents, however, thecustodian must sign for responsibility by placingthe accountability stamp on the document andthen signing and dating the stamp. From this pointforward, the bulk storeroom custodian assumeslegal responsibility for proper disposition of thematerial and forwards the responsibility documentto the ship’s store officer.

Receipts Directly Into theShip’s Store

Occasionally, it may be more logical or con-venient for you to deliver a receipt of stockdirectly to the retail store or to one of the serviceactivities. (A special order is an example of a directdeli very.) You should remind the recordskeeper

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that this type of receipt should be handled justas though the merchandise had been physicallyrouted through the bulk storeroom. The onlybasic difference in the routing procedure is thatthe retail store operator or the Ship’s Servicemanin charge of that service activity shouldacknowledge receipt and custody on a copy of thereceipt document. However, the recordskeepershould post and file this copy just as though themerchandise had been received in the bulkstoreroom.

The recordskeeper should also assign anintrastore transfer number from the Number Con-trol Log (NAVSUP 980) to a second copy of thereceipt document rather than preparing anIntrastore Transfer Data (NAVSUP 973) form.The retail store operator or service activity custo-dian should then sign the second copy of thereceipt document. The recordskeeper should postthe second copy as a breakout to the FinancialControl Record (NAVSUP 235) and the StockRecord (NAVSUP 464). Then the recordskeepershould file the second copy in the ship’s storeofficer’s Accountability File. In a combinedoperation, of course, a second copy of the pro-curement document would not be required.

Short, Excess, or Damaged Shipments

As mentioned above, both you (as theauthorized inspector) and the storeroom custo-dian should carefully inspect the shipment forquantity and condition. If factory-packed casesappear to be unopened, you can accept thequantity shown on the outside of the container.However, you should always check any repackedcases and containers that have been taped shut.Both you and the storeroom custodian shouldrecord any discrepancies that appear in eitherquantity or condition on your respective copiesof the procurement document.

FROM OTHER SUPPLY OFFICERS(O.S.O.).— If the amount of merchandise receivedfrom another supply officer is short of the amountshown on the receipt document, you can sign onlyfor the quantity you have actually received. Ifmerchandise from another supply officer isdamaged, you can sign only for the quantity youactually received that was in acceptable condition.However, because the material is already in theNavy Stock Account (NSA) and your ship hasalready been charged for the amount on thereceipt document, the recordskeeper must take upthe full value of the receipt document on the ship’s

records. You should expend the shortage bysurvey from the Navy Stock Fund (NSF). Youshould then forward an information copy of thesurvey document to the issuing activity.

But what should you do when you receive ashipment of merchandise that is in excess of theamount shown on the receipt document? Again,you should sign only for the quantity of stock thatyou have actually received. To account for theexcess stock, the recordskeeper should prepareand post a DD 1149 marked Gain by ExcessReceipt. You should make certain a copy of theGain by Excess Receipt invoice is sent to theissuing activity for information and for otheraction as deemed necessary.

FROM PURCHASE.— For receipts fromcommercial sources, you should sign only for thequantity of merchandise you received that was inacceptable condition. The recordskeeper shouldpost this quantity to the ship’s records. If thereis a difference in quantity, you should notify thevendor as soon as possible and request a correcteddealer’s bill. Other arrangements can be made,such as replacements for damaged merchandiseor fills for shortages, but these arrangements mustbe done before the completion of the receipt docu-ment. If the corrected dealer’s bill is not receivedwithin 10 days or before the ship’s departure, theincorrect dealer’s bill should be processed for pay-ment. The paying office will pay only that partof the bill that agrees with the certified purchasedocument. Dealers’ bills not subject to discountswill be forwarded for payment within 10 daysfrom the date of the receipt of the material or thedealer’s bill, whichever is later.

Receipts of Partial Shipments

On occasion, you may receive a shipment ofmerchandise that will only partially complete anoutstanding order or requisition. You may alsosuspect that the remainder of the shipment willarrive at some future date. For example, theinvoice contained in the partial shipment mayshow that the remainder of the order will be sentlater. In cases like these, you should markPartial Shipment on the receipt document andshow the quantities that you received. You shouldthen process the receipt in the regular manner.You should use additional copies of the receiptdocument for processing all subsequent receiptsof the remaining items of the shipment. (Youshould use a new receiving number from theJournal of Receipts [NAVSUP 977] for each

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subsequent receipt.) Continue this process until The DD 1155 covering the merchandiseyou receive the entire shipment for the merchan- ordered and the bonus-free items must show thedisc you ordered. description, quantity, and unit cost price of the

ordered items. The form must also include a

Receipts of ShipmentsWithout Invoices

separate listing of the quantity, description, andthe no-cost value of the bonus-free items. Youmust make certain the following statement

Occasionally, you may receive stock that is notappears on the face of the procurement document:

accompanied by an invoice. In these cases, therecordskeeper should prepare a dummy invoiceon a DD 1149. You should make certain this formis plainly marked Dummy. Use the dummyinvoice in the same manner as you would use aninvoice from the issuing activity. Consequently,the recordskeeper should include all pertinentinformation on the dummy invoice that wouldhave appeared on the invoice that should haveaccompanied the shipment. If the unit price ofan item you have received is not available to you,you should use the unit price of the same orsimilar item already carried in stock.

If you receive the invoice from the issuingactivity later in the same accounting period, therecordskeeper should replace the dummy invoicewith the invoice provided by the activity. Therecordskeeper should then correct the officerecords to show any differences in the valuesshown on the dummy invoice and those on theactual invoice.

If the actual invoice is received in a subsequentaccounting period, you should make certain therecordskeeper follows another procedure. Therecordskeeper should attach the actual invoice tothe dummy invoice. The recordskeeper shouldthen file these invoices in the retained returns forthe accounting period in which the dummy invoicewas reported. If differences in value exist betweenthe two invoices, the recordskeeper should preparean adjustment on a DD 1149 to show the debitor credit amount. The records keeper should thenreport the net difference on the Journal ofReceipts (NAVSUP 977) and should include thisamount as a receipt in the next set of returns.

“The vendor will indicate on the invoicethe description, quantity, and unit costprice of ordered items. The description,quantity, and normal unit cost price of thebonus-free items will be listed separatelyon the invoice at no-cost value.”

When bonus-free items are identical, youshould post the total quantity to the applicablestock record card. But when bonus items are notidentical, you should post the total quantity ofthe ordered items only to the applicable stockrecord card. If you are currently carrying itemsin stock that are identical to the bonus-free items,you should post the bonus-free items to theapplicable stock record card. If the bonus-freeitems are new items and authorized for sale butyou do not currently have them in stock, youshould prepare a new card. You should enter thequantity and normal unit cost on the new card.Based on the normal unit cost price of the item,the ship’s store officer will establish a unitselling price for the bonus-free items. You shouldsell the bonus-free items just as though they wereregularly ordered items.

AUDITING RECEIPTS

An accurate set of ship’s store returns dependsto a large extent on the accuracy with whichreceipt files and records are kept. Thus, it isvery important that you, as the senior Ship’sServiceman, audit the processing, posting, anddistribution of receipt documents with con-siderable care. To stay abreast of procedures,remember to keep your NAVSUP P-487 current.

Receipts of Bonus-Free ItemsProcessing Receipt Documents

Beware of free items! Wherever ship’s storeitems are being ordered, vendors are alwaysoffering bonus-free items in various forms. Oneexample of a bonus-free item is when you order11 tubes of toothpaste and you are offered onefree. Another example is when you buy 500toothbrushes and you are offered a free watch ora free camera.

The inspection copy signed by the authorizedinspector and the responsibility copy signed by thecustodian must be checked for agreement on thequantities of stock received. If they do agree, thecopy signed by the custodian becomes theAccountability File copy and holds the custodianresponsible for all stocks received. The ship’s

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store officer should put all such copies under lockand key. The authorized inspector’s copy is givento the recordskeeper who will extend that copyplus all other copies in the Outstanding PurchaseOrder File or Requisition File. The recordskeepershould then detach one copy (any copy except theoriginal of the authorized inspector’s copy) to usefor posting.

Discrepancies in counting between theauthorized inspector and the bulk storeroomoperator should be rare events. When they dooccur, immediate investigative action should betaken by the ship’s store officer or the leadingpetty officer. When unresolved, differences incounting may result in items being surveyed. Ifyou try to maintain proper security throughoutthe receiving process, discrepancies should be few.

Posting

The detailed procedures for posting receiptdocuments to the Journal of Receipts, FinancialControl Record, and the Stock Record are con-tained in the NAVSUP P-487 and the Ship’sServiceman 3 &2, module 2. As an auditor, youshould establish a system by which you canexamine the receipt procedures used by therecordskeeper. You can refer to the checklists inthe appendixes of your NAVSUP P-487. Someof the questions you should ask are those thatshould be asked in any receipt audit.

Have all vouchers been extended correctlyat cost and selling price?

Does the amount posted to the Journal ofReceipts represent the basic cost of the merchan-dise plus transportation, less credit memos (ifany), less discount?

Are consecutive receiving numbersassigned to each receipt document beginning withthe number 1 each accounting period?

Are receipt amounts posted to the correctcolumn of the Journal of Receipts (NAVSUP977)?

Does the total of the Journal of Receiptscolumns agree with the cost total of the Receiptsfrom Purchase and Receipts from O.S.O. files?

Are receipts posted to the Financial Con-trol Record (NAVSUP 235) at retail price onlyin a combined operation?

Are receipt quantities posted to theapplicable stock record card?

For a separate operation, is the receiptquantity posted to the Balance in Bulkroom orWarehouse column of the stock record card?

Are changes in the unit of issue, descrip-tion, cost price, or selling price recorded on thestock record card?

Is the posting copy of the receipt documentinitialed to show all posting has been done?

Is the date received posted to the PurchaseOrder Log or to the Requisition Log?

Processing Dealers’ Bills

Normally, a dealer’s bill accompanies the pro-cured material or arrives by mail shortlythereafter. When a dealer’s bill does not comewith the merchandise, you should contact thevendor as soon as possible so payment can bemade within the prescribed time. (In most cases,the prescribed item limit is 10 days after receiptof the material.) Whenever you receive a dealer’sbill, you should check it against the original in-spection copy of the DD 1155 (Ship’s Store). Ifboth documents agree, the original and threecopies of the dealer’s bill and the original and onecopy of the DD 1155 (Ship’s Store) should be sub-mitted to the nearest paying activity for prepara-tion of the NAVCOMPT 2277. (One of thesecopies must bear the authorized inspector’soriginal certification.) Remember, the submissionof these documents must take place within 10 daysfrom the date of receipt of the merchandise orthe dealer’s bill, whichever is later.

Discounts

Whenever dealers’ bills offer discounts, youmust make certain the discounts are taken withinthe prescribed time limits. The discount usuallybegins on the date the material is delivered or onthe date a properly certified invoice is received inthe appropriate Navy activity, whichever is later.Each dealer’s invoice that offers a discount shouldbe identified by a NAVCOMPT 442 stapled in theupper left corner. You should make certain thisaction is taken even if the discount has alreadybeen lost, In fact, checking to make certain thisidentification procedure has been carried out

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properly is an important part of your internalreceipts audit.

Fast Pay Procedures

When you are ordering from the Ship’s StoreContract Bulletin, the Ship’s Store AfloatCatalog, or the Navy exchange, you may find thatfast pay procedures apply in some cases. Again,the document you must use is the DD 1155, butthe payment procedure is somewhat differentfrom the ones discussed previously. As auditor,you must make certain the appropriate proceduresare being followed.

The DD 1155 should be prepared and dis-tributed by your ship according to NAVSUPINST4200.52. This instruction authorizes the supplierto forward the dealer’s bill along with the originalpurchase order to the designated paying activity.The DD 1155 should be marked Fast Pay Pro-cedures Apply for orders of $2,500 and under andCertificate of Conformance Procedures Apply fororders in excess of $2,500.

Under fast pay procedures, the supplierassumes responsibility and risk for supplies thathave not been received, have been damaged, orare not in conformance with the Order forSupplies or Services/Request for Quotations(DD 1155). Replacements, repairs, or correctionsshould be at the supplier’s expense. This condi-tion remains in effect provided the supplier isadvised within 90 days. The 90-day period startsfrom the date the merchandise is delivered eitherto a post office or a common carrier or is placedin shipment by other means to a point where itis first received by the government. The supplierand NAVRESSO (Code SSD) must both benotified immediately concerning any supplies thatare damaged, not received, or not in conformancewith the information on the DD 1155. For easeof identification, a copy of the DD 1155 shouldbe included in the notification that is sent to thesupplier and to NAVRESSO. Also, a copy of thenotification and the DD 1155 should be sent tothe appropriate fleet accounting and disbursingcenter (FAADC). All ship’s store items that arereceived under fast pay or certificate of con-formance payment procedures should be ac-counted for in the same manner as are receiptsfrom other purchases of ship’s store stock.

Distribution to Files

Finally, as an auditor, you must check thereceipt files to determine whether documents are

being properly distributed and contain thenecessary information. You should ask yourselfthe following questions.

Are the receipts from purchase filedseparately from the receipts from other supplyofficers?

Do the complete purchase order copiescontain payment information?

Is the Outstanding Purchase Order Filechecked weekly in case a follow-up letter to thesupplier is required?

The distribution of each type of receipt documentis contained in the appendixes of this trainingmanual and in your NAVSUP P-487.

STOWAGE

As an SH1 or SHC, you will be required toplan for and supervise the stowage of ship’s storestock in the bulk storerooms. As your shipprepares for an extended deployment, you will beconsulted as to how the necessary stock can bestowed in the limited space usually available.Ship’s Serviceman 3 & 2, module 2, contains adetailed discussion of many aspects of stowagesuch as security, classification of material,principles of storeroom layout, storeroom main-tenance, and materials-handling equipment. Inaddition, the NAVSUP P-487 contains a briefdiscussion of the stowage of specific items suchas clothing, film, and tobacco. In this section,several of the most important guidelines thatshould be followed in supervising stowage will bediscussed. An obvious first consideration issecurity.

To prevent pilferage, ship’s store stock mustbe stored in locked spaces. Stock must not be keptin compartments or storerooms with othermaterials that are not in the custody of theperson responsible for ship’s store stock. Theregulations concerning custody of ship’s storestock are contained in the NAVSUP P-487.

Once a custodian is put in charge of the bulkstoreroom, that person assumes full responsibilityfor all stock in these spaces and for all stockcoming in or going out. Except in emergencies,no one should be allowed in the space when theresponsible custodian is not present. The custo-dian must be on hand when inventories are takenand must stand by the spaces during materialinspections.

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In supervising the stowage of stock in the bulkstoreroom, you must also make certain the stockis being rotated according to the first in, first out(FIFO) method. The bulk storeroom custodiancan do this by marking all cases with the monthand year of receipt and then ensuring that materialwith the earlier dates is used first. Cigarette andcandy manufacturers will help you in proper stockrotation by using codes to identify the month,year, and, at times, week that the product is made.You can consult NAVRESSOINST 4067.4 for acurrent listing of manufacturers’ age and stowagecodes. You can, at times, obtain manufacturers’codes from local vendors as well.

When stocks of items are received, the codemust be deciphered and the plain text for themanufacture date must be recorded on the case.In the receipt process, try to move out the oldstocks and put the new stocks on the bottom.

The perishable items you receive, such ascandy, cookies, tobacco, film, and fountainsupplies, require special attention. As a super-visor, you must make certain the people who havecustody of the stocks handle them with specialcare. Use dunnage, keep cases away from steampipes, and allow for maximum ventilation. Exertthe necessary effort to keep your stocks clean,fresh, and desirable. Your patrons will appreciateyour efforts.

You must enforce fire regulations at all times.Any person in charge of ship’s store stock mustbe made aware of the responsibility to protect thestock from loss by fire. Even a fire that is quicklyextinguished can cause extensive damage. Makesure everyone observes the smoking regulationsand the storeroom is kept clear of oily or dirtyrags or combustibles of any sort. Oily, dirty, orgreasy materials lend themselves to spontaneouscombustion. They may also contaminate the stockas a result of their previous usage.

You should become acquainted with the loca-tions of the fire-fighting equipment in your area.You should also be familiar with the methods usedin extinguishing fires. Information on this sub-ject may be found in the current edition of BasicMilitary Requirements, NAVEDTRA 10054.

BREAKOUTS

Considerable movement of stock occursbetween the bulk storeroom, the ship’s store, andthe service activities. When this movement ofstock affects the responsibility of one or morecustodians, it must be documented. The termintrastore transfer applies to this type of

movement of stock. There are two types ofintrastore transfers: breakouts and issues for use.Although the two types are documented in muchthe same way (Intrastore Transfer Data, NAV-SUP 973), an issue for use is actually a type ofexpenditure and will be discussed under thatsection of this chapter.

A breakout is the transfer of stock betweenresponsible custodians when the stock is intendedfor ultimate resale. The most obvious example ofa breakout would be the movement of retail itemsfrom the bulk storeroom custodian to the operatorof a retail outlet (separate operation). It wouldalso apply to the movement of cost of sales itemsfrom bulk to the operators of the vendingmachines and fountain. Such items requirefurther processing, but they are eventually stillsold for cash. In a combined operation, documen-tation is not required for a breakout since oneperson is responsible for both the resale activityand bulk. The intrastore transfer procedures aredetailed in Ship’s Serviceman 3 & 2, module 2,and in the NAVSUP P-487. As a supervisor, youshould make certain your ship’s store personnelare adhering to the step-by-step procedures forprocessing and posting the NAVSUP 973. Use theinformation on intrastore transfers in theappendixes of this rate training manual to auditthe procedures. Also, you should frequently checkto see that the proper security precautions arebeing taken for any movement of ship’s storestock about the ship. A route should be plannedand checkers and spotters should be used just aswhen you are receiving stock aboard ship. Untilstock has been sold, used, or otherwise expended,it remains the responsibility of the custodian. Youshould remind your ship’s store personnel of thisfact frequently.

RECEIPT OF STOCK ON SHIPSWITHOUT SUPPLY CORPS

OFFICERS

Except for the areas of shortages in shipment,posting, and distribution, the receipt proceduresfor ships without Supply Corps officers shouldbe quite similar to those described for ships withSupply Corps officers. You can find detailed pro-cedures in the NAVSUP P-487.

SHORTAGES IN SHIPMENT

In the case of a shortage in a shipment fromanother supply officer that is received on board

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a ship without a Supply Corps officer, therecordskeeper should list the quantity of theshortage on the original and all copies of thereceipt document. The original should then besigned by the ship’s store officer and returned tothe transferring activity. When the shortage isattributable to the commercial carrier, you shouldnote complete information concerning theshortage on the government bill of lading or othershipping document. A copy of that shipping docu-ment should be attached to the copy of the docu-ment forwarded to the appropriate paying activityalong with the transmittal of vouchers at the endof the month. A survey should also be preparedfor the amount of the shortage in shipment.

POSTING

Upon obtaining the receipt document signedby the responsible custodian, the recordskeepershould remove the additional copies that werefiled in the Requisition/Receipt Invoice File at thetime of procurement. Since the bulk storeroomand the retail store are usually the responsibilityof one Ship’s Serviceman (combined operation),the recordskeeper should enter the quantity andthe unit retail price on all copies of the receiptdocument.

Actual posting should then be done as follows.The date of receipt and the receipt invoice numbershould be entered in the Requisition/ReceiptInvoice Log that was mentioned in chapter 4. Thequantity received should be entered on theappropriate Stock Tally (NAVSUP 209) card.Any change in unit cost or selling price shouldalso be entered. On ships without Supply Corpsofficers, there is no Journal of Receipts (NAV-SUP 977) or Financial Control Record (NAVSUP235).

DISTRIBUTION

After verification, the responsible custodianshould acknowledge custody of the stock bysignature on a copy of the receipt document. Thesigned receipts should be kept under lock per-sonally by the ship’s store officer. Two copies ofthe receipt document should be forwarded to theappropriate FAADC along with the transmittalof vouchers at the end of the month. One copyof the receipt document should be signed by boththe ship’s store recordskeeper and the ship’s storeofficer. One copy of the signed receipt documentmust be retained on board for the ship’s storerecords.

EXPENDITURES

Expenditures are the legal procedures you canuse to remove ship’s store stock from the account-ability of the ship’s store officer. As a seniorShip’s Serviceman, you will be responsible formaking certain expenditures are done accordingto issued regulations. You will also be expectedto handle the miscellaneous transactionsassociated with the various types of expendituresthat you must use. The procedures you shouldfollow are discussed in detail in NAVSUP P-487and in Ship’s Serviceman 3 & 2, module 2.

SUPERVISING EXPENDITURES

There are four methods you can use to expendstock.

1. TRANSFERS—the movement of stockfrom the accountability of one sales officer to thatof another. (Accountabilities are reduced andincreased as appropriate.)

2. ISSUES—expenditures of stock for somefurther purpose, usually for shipboard use.(Accountabilities are reduced.)

3. SURVEYS—expenditures of stock forimmediate disposal. (Accountabilities arereduced.)

4. SALES—expenditures of stock for whichcash is received. (Accountabilities are unchanged.)

In addition, there are two other types ofexpenditures that do not fall under the four basicmethods.

1. Price changes (markdowns below cost)2. Claims for reimbursement for personal

property

Transfers

In chapter 4, a transfer of stock from otherships was mentioned as one of the possible pro-curement resources of ship’s store stock incertain situations. As well as being the recipientof stock from other ships, your ship might occa-sionally be the supplying activity.

Another ship might request brand X cigarettesbecause of a shortage in stock. Your ship maybethe only source in the area that can fill the request.You should be able to examine the Stock Record(NAVSUP 464) for brand X cigarettes to deter-mine how many cartons you have on board, theusage rate, and the low limit. If your supply is

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nearly at the low limit, you must determine thetime frame within which you could replenish yourstock. Are there any outstanding requisitions forbrand X cigarettes? Are you scheduled for under-way replenishment by an AFS in the near future?You must take all these things into considerationbefore completing a transfer.

Your ship might also be overstocked withsome merchandise. You should advise the ship’sstore officer to place the overstocked merchan-dise on an excess stock list. As a result, anothership may agree to relieve you of some of theexcess stock. This transaction would be done bya transfer at cost price.

In addition to the usual transfer to othersupply officers, you may have the occasion totransfer ship’s store stock to the Marine Corps,to other government departments such as theArmy and Air Force, to ships operated by theMaritime Administration, or even to foreigngovernments or vessels. In each of these cases, youshould try to negotiate a cash sale rather than atransfer. However, if a transfer is the onlyalternative, you should carefully follow the pro-cedures detailed in the NAVSUP P-487.

Issues

According to the NAVSUP P-487, there areeight individual types of issues you may use toexpend stock. By far, the most frequent type ofissue you will make is an issue for use to aservice activity. For example, an issue for useoccurs whenever you issue operating supplies(such as bleach or combs) to the laundry orbarbershop, display articles for the ship’s store,or repair parts for vending machines.

An issue for use takes place as a transfer ofstock from a responsible custodian to the operatorof another ship’s store facility whenever thestock is intended for use and there is noreimbursement for the value of the issuedstock. In other words, only stock that youissue for use in a service activity should beexpended from the operation at the time of issue.Since you will not receive cash in reimbursementfor the issued stock, you should consider any issuefor use as a cost of operations transaction. At theend of the accounting period, you must use yourprofits from the ship’s store to reimburse the NavyStock Fund for the value of the issued materials.

As a supervisor, you should make certain yourship’s store personnel recognize the differencebetween an issue for use and a breakout. Errorsin these two categories are easy to make as a

NAVSUP 973 (Intrastore Transfer Data) is usedfor both transactions. In considering whether abreakout or issue for use is required, you needonly consider the purpose of the transfer. If theitem is going to be sold either directly or afterfurther processing, then a breakout is called for(when a separate operation exists). If the item isgoing to be consumed or used in the operationof a ship’s store facility, then an issue for use iscalled for and the item should be expended as acost of operation.

Another type of issue that your ship’s storepersonnel can confuse with an issue for use to aservice activity is an issue for ship’s use. You canmake an issue for ship’s use to any departmentaboard ship and this issue will have nothing what-soever to do with costs of operation. Reimburse-ment for an issue for ship’s use should be madefrom the operating target (OPTAR) of the shipand not from ship’s store profits. An example ofan issue for ship’s use is when you issue clothingitems to the ship’s electricians to be worn by theelectricians when they are handling batteries.

Perhaps the biggest problem you will have inthe area of issues for ship’s use is controlling thenumber of these issues. Once the other depart-ments of your ship discover that they can obtaincertain stock from the ship’s store, they maydepend on the ship’s store too much. For example,other departments might try to obtain issues ofclothing for all sorts of jobs. You should be ableto help the ship’s store officer in reminding theother departments that all issues are chargedagainst their share of the OPTAR. The letter orinstruction that grants the supply officer theauthority to issue ship’s store stock for ship’s useshould outline clearly under what circumstancesthis type of issue will take place.

Other types of issue are those you will makefor health and comfort items to survivors ofmarine and aircraft disasters, to merchant shipsin distress, for burial of the dead, to Marine Corpspersonnel, to the general mess, and to first enlist-ment personnel. These will occur much less fre-quently. You should know the procedures youmust use for each type of issue. You can find thedetails for these procedures in the NAVSUPP-487. Make certain your personnel follow theseprocedures exactly.

Surveys

In spite of all your efforts to run a perfectoperation, there will be times when accidents orevents will result in loss of or damage to your

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ship’s store stock. At such times, you should beable to determine if, when, and how you can usea survey. You will use the survey method toexpend stock from your records and accountswhen stock items have been lost or damaged, havedeteriorated, or are otherwise unsuitable for useor sale. This section deals with several of thealternatives you should consider when you mustsurvey for losses in the value of your stock.

Under certain circumstances, such as loss ofstock by evident theft, you must immediatelyprepare a survey request. These circumstances arediscussed in detail in NAVSUP P-487. Underother conditions, however, you are not requiredto prepare a survey request at the time of survey.The ship’s store officer initiates a survey byrequesting that an immediate inspection of thestock involved be made by the formal surveyingofficer.

Ship’s store surveys are distinct in severalways. The most important distinction—also themost frequently abused—is that the value of aship’s store survey should be charged to one ofthree different appropriations: the Navy StockFund (17X491 1.23 10); Ship’s Store Profits, Navy(General Fund) (17X8723.23 10); or Ship’s StoreProfits, Navy (own ship) (17X8723.2301). Sincecharging a survey to the correct appropriation isso important and easy to foul up, what guidelinesshould you follow? The key to your selection ofthe correct appropriation is the manner in whichthe stock was lost or damaged.

Before you charge a survey to an appropria-tion, you must know what the appropriationcovers. The information below examines the threeappropriations, discusses the types of damage orloss each one is designed to absorb, and explainssome procedures you can follow.

NAVY STOCK FUND.— The NAVSUPP-487 is quite specific concerning the types oflosses you can survey to the Navy Stock Fund.In general, this appropriation covers any loss ordamage that does not result from negligence ormisappropriation on the part of shipboardpersonnel.

Specifically, the Navy Stock Fund pays for anyloss or damage in shipment including underwayreplenishment, except for concealed losses. TheNavy Stock Fund also covers act of God lossesor damages by fire, water, or oil. You shouldgenerally interpret these disasters to mean large-scale fire, water, or oil damage that was notincurred by negligence or willful destruction onthe part of a human being. For example, a fire

caused by faulty wiring would be properlychargeable to the Navy Stock Fund, even ifproper electrical procedures had not beenfollowed. However, if the store operator dropsa cigarette and burns a hole in a billfold, the NavyStock Fund will not cover the damages. You cancharge all clothing losses to the Navy Stock Fund,regardless of cause. This is because the handlingof clothing cannot affect ship’s store profits.

SHIP’S STORE PROFITS, NAVY (GEN-ERAL FUND).— The Navy Resale and ServicesSupport Office (NAVRESSO) maintains a fundto cover various expenses for ship’s stores in thefleet. This fund is financed by part of the assess-ment of sales paid every accounting period by eachship’s store afloat. Some of the expenses theGeneral Fund covers are certain types of surveys.Actually, you will rarely ever use the GeneralFund for a survey of ship’s store stock. You mustbe aware, however, of the specific circumstancesunder which you can charge a survey to thisappropriation. By using this fund correctly, youcan prevent losses to your own ship’s store profits.

There are two instances when you can properlycharge a survey to the General Fund (GF). Firstof all, you can charge any survey of $25 or morecovering concealed losses or damage upon receiptof stock from a Navy transshipping activity.Losses and damage to goods are considered to beconcealed when there are no visible signs ofdamage upon arrival of the shipping container.However, before initiating a General Fund survey,you should send a letter to the responsiblevendor explaining all the facts about the loss ordamage and requesting replacement or reimburse-ment. If you receive a replacement of the lost ordamaged merchandise, you can cancel the survey.If the vendor reimburses you, you should goahead and process the survey and charge it to yourown ship’s store profits. As explained in NAV-SUP P-487, you should report the amount of thereimbursement as a contribution to your ownship’s store profits.

If the vendor does not replace the merchan-dise or does not agree to a reimbursement, youshould forward the survey to NAVRESSO alongwith copies of the correspondence with thevendor. If the survey in this situation amountsto less than $25, you should charge it to your ownship’s store profits. You can charge any losses ordamage upon receipt of merchandise directly fromNavy activities to the Navy Stock Fund. Do notaccept any damaged articles that you receivedirectly from a vendor.

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The only other circumstance under which youcan request a survey to Ship’s Store Profits, Navy(General Fund) is when your own ship’s profitsare considered inadequate to absorb the cost ofa large loss and you cannot properly charge theloss to the Navy Stock Fund. The value of thesurvey must generally be larger than the expectedprofits from the accounting period. An exampleof this condition is when there is a break-in anda large amount of merchandise is lost throughtheft.

If there is a large loss of merchandise thatprofits from your ship’s store during the currentaccounting period will not cover, a DD 200(Report of Survey) should be prepared as a chargeto Ship’s Store Profits, Navy (General Fund). Theship’s store officer will usually prepare theDD 200 to report the survey. The surveyingofficer will then conduct a review of the survey.After an inventory has been made and a reviewof the DD 200 has been completed by the survey-ing officer or survey board and the DD 200 hasbeen approved by the commanding officer, theoriginal and four copies of the report should besent to NAVRESSO for approval. Until thesurvey is approved by NAVRESSO, the value ofthe loss should be carried as inventory,

If the survey is approved by NAVRESSO, thetotal approved amount should be included in theamount that is entered in the Journal ofExpenditures (NAVSUP 978) as Survey (SSPNGF). The total approved amount should also beentered on line B23 or line B27 (as applicable) onthe Ship’s Store Balance Sheet and Profit andLoss Statement (NAVCOMPT 153). At the endof the accounting period, the total money valuethat was approved by NAVRESSO to be chargedto Ship’s Store Profits, Navy (General Fund),should be included in the amount that is enteredon line C07 of the NAVCOMPT 153. If the surveyis not approved by NAVRESSO, the loss shouldbe expended to local ship’s store profits on lineB23 or line B27 (as applicable) of the NAV-COMPT 153.

SHIP’S STORE PROFITS (OWN SHIP).—The value of any surveys that you cannot properlycharge either to the Navy Stock Fund or to Ship’sStore Profits, Navy (General Fund), you mustcharge to local ship’s store profits. The mostcommon examples of a local profit survey arethose covering misappropriation and negligence.Another example is if you fail to accomplishtimely markdowns of perishable stock resultingin stock that is unfit for sale at any price.

A markdown is always preferable to a localprofits survey, since some of the original valueof the stock may be returned from sales.

Besides charging a survey to the correctappropriation, you will also be faced with otherconsiderations in your use of the survey methodto expend ship’s store stock. In your supervisionof ship’s store expenditures by survey, you mayhave to account for merchandise you receive afteryou have surveyed it as missing in shipment. Onoccasion, you may also be required to revalueship’s store stock instead of expending it totallyby survey. Both these techniques are discussed inthe information that follows.

SURVEYED MATERIAL SUBSEQUENTLYRECEIVED.— Ship’s store stock may be receivedafter it has been surveyed as missing in shipment.The receipt of the surveyed material should becovered by a Requisition and Invoice/ShippingDocument (DD 1149). The DD 1149 will creditthe appropriation that was previously charged bythe survey. No entry should be made to theJournal of Receipts (NAVSUP 977), however, acredit entry (a minus entry in red ink) should beposted to the Journal of Expenditures (NAVSUP978). The items received should be entered on theStock Record (NAVSUP 464) in the Expenditurecolumn as a minus entry in red ink. The wordSurvey should be entered in the ReceivedFrom/Expended To column of the NAVSUP 454.

REVALUATION OF STOCK.— Anotheraspect of the survey method you can use toexpend ship’s store stock is to revalue the stockso you can sell it at a reduced price. By thismethod, you are surveying only part of the moneyvalue of the stock as you are recovering a partof your expenditure through sales.

The question that may cross your mind is,Wouldn’t a markdown accomplish the same goalwith less trouble? The answer is that in many casesit would. Markdowns always charge local ship’sstore profits. If items were damaged throughnegligence or poor stock control, or for any otherreason that would properly charge local profitsin a survey situation, a markdown would be theproper course of action. However, to mark downitems that are damaged upon receipt or uninten-tionally damaged by fire, water, or oil would beimproper since damage of this sort is properlychargeable to the Navy Stock Fund.

You should never mark down Navy clothingitems. You should always revalue Navy clothingitems by survey since clothing cannot affect

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profits. To account for any gains or lossesresulting from the handling of Navy clothingitems, you should credit or charge the Navy StockFund.

You may have items of clothing that havebecome shopworn (soiled from exposure orhandling) or damaged by smoke or waterto such an extent that they cannot be sold at thestandard price. If laundering or dry cleaning willrestore wearability with a reasonable expectationthat the purchaser will obtain normal wear, youshould survey (revalue) these items and place themin stock at 25 percent of the standard price. (Pricesshould be rounded off the next higher $0.05. )

You may have items of clothing with minordefects such as split seams or missing buttons.Although you cannot sell them at standard pricein this condition, you can have them repaired.You can then sell the items at standard price aslong as wearability is restored. You should chargethe cost of the repairs to the Navy Stock Fund.

If the clothing does not meet any conditionsfor revaluation or repair, then you should expendit from the records as a loss by survey.

Sales

The fourth major type of expenditure in theship’s store is sales. Accountability is actually notreduced in this case since cash is received in placeof the stock expended. The supervision of ship’sstore sales will be discussed in chapter 6 of this ratetraining manual. The information below willdiscuss some of the techniques of retail merchan-dising you can use to expend ship’s store stock,

Price Changes

A price change is any change in the value ofan item of stocked merchandise. Price changes canoccur for a variety of reasons and are a necessityfor any effective retail operation. As a leadingShip’s Serviceman, you should not only be ableto supervise the procedures involved in ac-complishing a price change, but you must also beaware of the reasons for and causes of pricechanges. You should be able to advise the ship’sstore officer when a price change is called for.

A markon is an increase in the selling priceof an item of merchandise. A markon will causean increase in the monetary responsibility of thecustodian in charge of the retail outlet. You mayadvise a markon when there is a substantiallyincreased cost price on a new receipt of mer-chandise already carried. Since all the particular

items are carried at the new cost price, the oldselling price may be insufficient to generate thedesired profit margin. Other possible reasons fora markon might be a change in the pricing policyof the ship’s store officer or a desire on the partof the commanding officer to increase storeprofits in order to increase the ship’s recreationfund.

A markdown is a decrease in the sellingprice. A markdown causes a decrease in themonetary responsibility of the ship’s storeoperator. 1 f the retail price is marked down belowthe cost price, then there is actually a decrease inthe value of Navy Stock Fund material. Thisexpenditure from the NSF is reimbursed byprofits at the end of the accounting period.

The existence of markdowns in an operationis not necessarily bad. In fact, a reasonablenumber of markdowns during an accountingperiod is considered healthy. It is an indicationthat you are exercising some degree of stock con-trol. After all, items that you cannot sell are noasset to your store. They are tying up money youcould use to purchase more desirable stock.Although an item that is reduced in price generatesless profit or even a loss per item sold, the endresult of a timely markdown is an increase inprofits. The increase in profits will result fromlarger customer volume and interest, increasedstoreroom capacity, and a larger amount ofavailable buying capital. Of course, markdownsmust be done selectively since too manymarkdowns can only result in decreased profitsfor your store.

The following is a list of reasons for possiblemarkdown action in a ship’s store operation.

Reduction in cost price on a new receiptof merchandise already in stock

A desire to generate less in store profits andpass the savings on

A change instore officer

Excess stock

Dead stocksaturated items

Merchandise

to the customers

pricing policy of the ship’s

because of overbuying

because of unpopular or

that is going out of style

Excess seasonal merchandise after theseason has reached its peak

Perishable stock such as candy or film thathas become old and outdated

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Defective or dirty merchandise that can-not be returned to the vendor

Increase in customer interest and volumewith specials

The above reasons set up some guidelines butdo not really answer the questions when andhow much. There are no simple answer. Forexcess or dead stock, a general rule you can followis to mark an item down whenever it will not sellat its present price. Mark it down to a level thatwill stimulate sales. Mark down seasonal itemsjust before the end of the season, not after theseason is over. Trial and error is probably yourbest method of learning. You should not be afraidto experiment occasionally.

One procedure you should avoid is markingdown items progressively, such as 5 percent eachweek. Your customers will soon discover they canjust wait around until the price has reachedbottom. When you have decided an item is to bemarked down, go ahead and cut the price suffi-ciently so you can sell the item. Whether themarkdown is 5 percent or 50 percent, establishit and stick to it.

Another price change is the markdown tozero. Some ship’s store stock items that donot require a survey can be marked down to zeroand charged to ship’s store profits. You can usea markdown to zero to expend ship’s store stockitems under the following circumstances.

Stock items that are damaged or brokenand have no resale value. The total cost value perline item cannot exceed $25.

Items of stock that have deterioratedbeyond salability as a result of overage. The totalcost value should not exceed $25 per line item.

Items of stock that are shopworn and haveno resale value. The total cost value should notexceed $25 per line item.

Food or beverage items of stock that areconsidered to be unfit for human consumption,as certified by the medical department.

Concealed losses or damages. The totalcost value should not exceed $25 per line item.

Under the circumstances listed above, theitems should be marked down to zero and thenexpended as a cost to ship’s store profitsaccording to the procedures outlined in yourNAVSUP P-487. You must use a Retail PriceChange (NAVSUP 983) that has the following

certification signed by the senior Supply Corpsofficer on board. (This authority cannot bedelegated.)

“I personally have seen the merchandisehereon marked down to zero and haveordered it destroyed.”

-------------------------------------------Senior Supply Officer On Board

Price Adjustments forStandard Navy Clothing

The sale of Navy clothing in a ship’s storeafloat is handled as a service to the crew. No profitor loss is to be derived from it. Prices for Navyclothing are standard throughout the Navy.Clothing is received from supply activities andsold at the standard price. However, situationswill develop that will make it necessary for youto revalue certain clothing items in order to avoidabsorbing profit or loss.

The most common of these situations is the-.standard price adjustment. Annually, onOctober 1, and occasionally at other times.standard prices for Navy clothing are issued toall ships. They are based on existing cost pricesto the Navy, and may, of course, vary from yearto year. When a change in price occurs for anyitem stocked, you must revalue the number ofitems you have in stock (as determined by inven-tory) to the new standard price.

The other type of price adjustment for stand-ard Navy clothing is a purchase variance. Apurchase variance occurs when standard Navyclothing items are received from a commercialvendor. A purchase variance equals (1) the dif-ference that results when the unit cost price of anitem of standard Navy clothing is rounded off tothe nearest cent, or (2) the difference that existsbetween the standard price and cost price of astandard Navy clothing item.

To account for ail gains and losses resultingfrom standard price changes and purchasevariances, you must make certain that a separateoriginal and one copy of the NAVSUP 983 areprepared. (Consult the current NAVSUP P-487for detailed procedures for preparing the NAV-SUP 983.) All gains and losses must be creditedor debited to the Navy Stock Fund. The originalNAVSUP 983 should be filed in the Fiscal Gainsor Losses File (SSA-15), and the copy should befiled in the Accountability File (SSA-21).

The new unit cost of an item that results froma change in the standard price should be recorded

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on the NAVSUP 464. Receipt and expenditureadjustment entries should be made in the Ship’sStore Afloat Financial Control Record (NAVSUP235) and in the Journal of Receipts (NAVSUP977) or the Journal of Expenditures (NAVSUP978). Any adjustment entries should be made asof the effective date of the price change.

Claims for Reimbursementfor Personal Property

Occasionally, an issue in kind may be madeby the ship’s store officer to enlisted personnelfor personal property lost, destroyed, damaged,captured, or abandoned incident to service in theU.S. Navy. You should be aware that such a claimdiffers from a claim for reimbursement as a resultof loss or damage to personal apparel through theoperation of a ship’s store laundry, dry-cleaningfacility, or tailor shop. The latter type of claimis a charge against ship’s store profits and appearson the Ship’s Store Operating Statement (NAV-COMPT 153, Ship’s Store Balance and Profit andLoss Statement). This document will be discussedlater in chapter 7. The authority for reimburse-ment for personal property lost, destroyed,damaged, captured, or abandoned incident toservice is contained in Title 31, U.S. Code240-243. The regulations governing the submis-sion and adjudication of such claims are publishedin the Manual of the Judge Advocate General,chapter XXI. The procedures for completing sucha reimbursement are contained in NAVSUPP-487. Whenever enlisted personnel, includingchief petty officers, submit a claim adjudicatedby the commanding officer for loss of personalproperty, the ship’s store officer must reimbursethem in kind from available stock in the ship’sstore. Reimbursement for items that are notavailable should be made in cash. Detailed pro-cedures are contained in your NAVSUP P-487.

Disposition of Excess Stock

As a supervisor and assistant to the ship’s storeofficer, you should be able to recommend the typeof expenditure that will best accomplish thedesired effect. For example, if, as a result of amonthly stock record review, you discover thatan excess of stock exists for some items, then youshould be able to recommend a method ofdisposal for the excess items. An excess of stockexists when your monthly stock record shows thatperishable and catalog items exceed 3 months’requirements and that any other items exceed 6months’ requirements. In determining excess

stock, you should consider the normal deteriora-tion rate of the item as well as the anticipated typeof operation of your ship.

You can dispose of excess stock by any of thefollowing methods.

Reduction in price for sale on board

Transfers to other supply officers (as aresult of an excess stock list or agreement betweensupply officers)

Sales to Navy exchanges and other militaryactivities

Return to vendor for cash or credit refund(to be discussed later in this chapter)

Excess clothing stock in new unused conditionshould be transferred on a DD 1149 to any shoreactivity carrying such stock.

You should dispose of items in stock that areobsolete or shopworn by taking deep markdownsto effect rapid sale. You should dispose of bysurvey any items that are damaged or deterioratedor just not salable.

Disposal of Foreign Merchandise

You can return unsold/undamaged foreignmerchandise for refund in both the Sixth FleetForeign Merchandise Program established inRota, Spain, and Naples, Italy, and in the PacificFleet Foreign Merchandise Program established inYokosuka, Japan, and Subic Bay, Republic of thePhilippines. Foreign merchandise should NOT bereturned to CONUS except in the event of unex-pected emergency deployment and then only withthe specific permission of COMSERVFORSIXTH-FLT or COMNAVLOGPAC as appropriate.A copy of the request to COMSERVFORSIXTH-FLT or COMNAVLOGPAC (as appropriate) forreturn of foreign merchandise to CONUS mustbe forwarded to NAVRESSO. The commandingofficer is responsible for complying with allcustoms regulations in the event authority isobtained for return of an y foreign merchandise.

Miscellaneous Transactions

There are several miscellaneous transactionsthat will occur periodically. As a senior Ship’sServiceman, you should be aware of the pro-cedures involved. You must be prepared tohandle the documentation and posting.

GUARANTEED SALES.— Procurement ofitems on a guaranteed sales basis or other condi-tions permitting return for credit is restricted tomagazines, periodicals, and other printed matter;

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phonograph records; prerecorded tapes andcassettes; film; motion picture magazines(cartridges); and photo mailers. When your ship’sstore is procuring these items from vendors listedin the Ship’s Store Afloat Catalog on a guaranteedsale basis or under other conditions permittingreturn for credit, the purchase orders must con-tain the following clause: “RETURN FOREXCHANGE OR CREDIT. Any unsold itemsmay be returned prepaid to the vendor inexchange for other items or for credit memo-randum in accordance with the terms and condi-tions listed in the Ship’s Store ContractBulletin or Ship’s Store Afloat Catalog in effecton the date of this order.”

CREDIT MEMORANDUM.— Assume thatyou received stereo albums valued at $75 cost inJanuary. At the end of February, you still have

$50 worth of albums on board and sales havestopped. Since your ship’s store orders regularlyfrom the vendor, the best procedure would be toreturn the remaining albums to the vendor for acredit memorandum.

If your ship’s store is operating under separateaccountability and the albums are located in theretail store, you should prepare an IntrastoreTransfer Data (NAVSUP 973) to expend the retailvalue of the albums from the Retail Store columnof the Financial Control Record (NAVSUP 235).You should then transfer the albums to the bulkstoreroom. You should always follow this pro-cedure before returning any merchandise in aseparate operation.

The recordskeeper then should prepare aDD 1149 listing the quantity of stock returned,the unit cost prices, and the cost extensions. (Seefig. 5-1.) The quantities returned should be

Figure 5-1.—Exchange of merchandise for a credit memorandum.

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expended from the Stock Record (NAVSUP 464),and the total balance should be reduced. Noentry is made on the cost records (Journal ofReceipts and Journal of Expenditures) since theNavy’s obligation to the vendor remains un-changed. The vendor then signs the originalDD 1149 to acknowledge receipt and issues acredit memorandum to your ship.

A month later, your ship’s store may decideto order more albums—cost value $80. Thevendor can then apply the $50 credit memoran-dum to your order. You should prepare an Orderfor Supplies or Services/Request for Quotations(DD 1155) showing $30 as the net amount to bepaid. Upon receipt, the full quantities received areposted to the Stock Record (NAVSUP 464), andthe net amount is reported in the Journal ofReceipts (NAVSUP Form 977). The DD 1155 ishandled as a regular receipt from purchase. Theoriginal DD 1149 (signed by the vendor) shouldbe placed in the ship’s store officer’s Account-ability File.

At the end of the accounting period, ifexchanged items have not been received for theitems returned or if a credit memorandum hasbeen received but has not been applied towardprocurement of new items, the dollar value of thereturned items must be carried as part of theinventory. The document number, date, anddollar value of each transaction should be listedon the last page of the inventory.

CASH REFUND.— Using the same situationas above, assume that your ship’s store does notdeal with this vendor very often. In this case, youwould advise the ship’s store officer to requesta cash refund instead of a credit memorandum.

The recordskeeper prepares an IntrastoreTransfer Data (NAVSUP 973) to expend the valueof the items from the Retail Store column of theShip’s Store Afloat Financial Control Record(NAVSUP 235) and to transfer the quantity tothe bulk storeroom. A Memorandum Requisitionand Invoice/Shipping Document (DD 1149)extended at cost price should be prepared andused to expend the returned quantity from theStock Record (NAVSUP 464). The vendor willacknowledge receipt of the returned merchandiseby signature on the DD 1149. When the retailoutlet and the bulk storeroom are operated by thesame person, a DD 1149, extended at both costand retail price, should be prepared and used toexpend the quantity and value of the returneditems from the NAVSUP 464 and NAVSUP 235.The vendor will acknowledge receipt of the

merchandise by signature on the DD 1149, exceptfor any material returned to the vendor byregistered mail. (In this case, the registered receiptfrom the post office should be attached tothe accountable copy of the DD 1149 pendingreceipt of the signed copy from the vendor.) Theresponsible custodian will be provided a signedcopy of the credit memorandum for all stockreturned. Sound business practice dictates thatall credit memorandums and cash refunds beliquidated promptly. If, after a reasonable timeperiod, liquidation has not yet taken place anddifficulties are encountered, you should requestassistance from NAVRESSO. Be sure to sendcopies of all correspondence with the vendor toexpedite NAVRESSO’s assistance. The documen-tation involved is illustrated in figure 5-2. Moredetailed information is contained in your NAV-SUP P-487.

EXCHANGE FOR SIMILAR ITEMS.—Whenever you return items for new similar items,you must prepare a DD 1149 to cover the materialyou are returning to the vendor. The vendor, oran authorized representative, must sign theoriginal invoice acknowledging receipt of thematerial. You should expend any items you returnto the vendor from the appropriate NAVSUP 464unless the items exchanged are identical in allrespects. If the items to be exchanged are locatedin a retail store, you must also prepare a NAV-SUP 973.

If the items you receive are not identical inall respects to the items you have returned to thevendor, you must post the new items as a receipton the appropriate NAVSUP 464. If the new itemsare additional stock items, you should prepare aNAVSUP 464 to post the new items as receivedfor stock and resale. The DD 1149 should beassigned an expenditure number and should befiled in the Expenditure Invoice File (SSA-14). Atthe end of the accounting period, the documentnumber, date, and money value of each un-liquidated exchange should be entered on the lastpage of the inventory.

MERCHANDISE RETURNED FOR MA-TERIAL OF EQUAL VALUE.— If the moneyvalue, at cost, oft he items exchanged equals themoney value of the new similar items receivedfrom the vendor, your DD 1149 should indicatethe item, quantity, unit cost, and extension ofboth the item returned and the replacement item.You should use normal posting procedures for thistransaction.

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MERCHANDISE RETURNED FOR MA-TERIAL OF GREATER VALUE.— When themoney value of items received is greater than themoney value of items exchanged you shouldprepare a DD 1155 showing the followinginformation.

1. New item description, quantity, unit cost,and total money value.

expenditure entry on the NAVSUP 978 ratherthan a receipt entry on the NAVSUP 977. Youshould post the cost value of the receipt on theNAVSUP 978 (Journal of Expenditures) in thecolumn headed Ship’s Store—Other Expenditureswith an appropriate notation to show that it isa credit (or negative entry). You should handlethe other records in the same manner as for aregular receipt.

2. Money value of material returned.AUDITING EXPENDITURES

3. New amount to be paid (which will be thedifference between the total money value of thenew items less the money value of the returnedmerchandise less an authorized discount). Inaddition to posting the items to the appropriaterecords, you must report the net amount of thereceipt in the Journal of Receipts (NAVSUP 977).

MERCHANDISE RETURNED FOR MA-TERIAL OF LESSER VALUE.— Ship’s storeitems may not be exchanged for merchandise oflesser value. When returning material for itemsof lesser value, you should request a creditmemorandum or a cash refund. Procedures forthese transactions are contained in your NAVSUPP-487.

RECEIPTS FROM OTHER APPROPRIA-TIONS.— The ship’s store will occasionallyacquire items from shipboard sources. OtherAppropriations was mentioned earlier in chapter4 as a minor source of ship’s store stock. Thereceipt procedure for this source is unusual as youwill post the cost value of the receipt to theJournal of Expenditures (NAVSUP 978) as acredit expenditure.

Receipts from other appropriations are, ineffect, “backed” into the Navy Stock Account.Canned fruit juice, for example, would haveoriginally been procured from commercial sourcesand held at the local Navy supply center in17X4911 of the NSF. Upon requisition by yourship’s food service officer, the canned juice wastransferred to the ship’s store officer for end usein 17X1453.3140 MPN. When it is received intoship’s store stock, it is once again brought into17X4911 NSF. Rather than showing the same itembeing received into NSF twice, it is entered on therecords in such a manner that the overall receipttotals for the Navy Stock Account show the itemonly once. This is done by making a negative

As with receipts, you should audit expendituredocument preparation, posting, and distributionfrequently to make sure ship’s store returns canbe done accurately.

Preparation

Periodically, you should examine the variousexpenditure documents to find out whether therecordskeeper is observing the procedures detailedin the NAVSUP P-487.

SURVEY.— When auditing a survey docu-ment, you should check for the following items(as shown in fig. 5-3).

Is an Expenditure Invoice Log beingproperly maintained with separate series numbersprovided by the supply officer?

Are the survey items expended at costprice?

Are the retail extentions entered on theDD 200 for surveyed items that were in the retailstore?

Is the accounting data recorded correctly?Is the account in which carried always 51000NSA? Is the correct appropriation charged in theaccounting data (17X4911.2310 for Navy StockFund surveys; 17X8723.2301 for local ship’s storeprofit surveys; and 17X8723 GF for General Fundsurveys)?

Are the members of the survey board thecurrent appointees made by the commanding of-ficer in writing?

TRANSFERS.— In auditing a transfer, theDD 1149 should be checked for accuracy. You

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Figure 5-3.—Auditing a survey.

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should ask yourself questions similar to the onesbelow. (See fig. 5-4.)

Was a number assigned from the Expendi-ture Invoice Log?

Is correct accounting data being used?

Are the transfers summarized monthly ona NAVCOMPT 176?

ISSUES.— When you are auditing an issue foruse, you should examine the NAVSUP 973.

Keep the following questions in mind. (See fig.5-5.)

Are the items requested authorized forissues for use?

Does the NAVSUP 973 have all threerequired signatures?

Is a number assigned from the NumberControl Log (NAVSUP 980)?

Are price extensions and totals correct?

Figure 5-4.—Auditing a transfer.

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Figure 5-5.—Auditing an issue.

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PRICE CHANGE.— In auditing a pricechange, you should examine the NAVSUP 983.You should carefully check the form by keepingquestions such as the following in mind. (See fig.5-6.)

Was the type of price change recorded onthe NAVSUP 983?

Does the NAVSUP 983 show the dif-ference between the original cost price and the newcost price and the difference between the originalselling price and the new selling price, multipliedby the number of units on hand?

Was a number assigned from the NumberControl Log (NAVSUP 980)?

Wasentered for

Was

Posting

the reason for the price changeeach item?

correct accounting data used?

For each type of expenditure, you must alsocheck to see that quantities and totals are postedto the applicable ship’s store records. You shouldspot check the Stock Record (NAVSUP 464) cardsof various expended items to ensure that thedecrease is properly recorded. You should thencheck the Journal of Expenditures (NAVSUP 978)against expenditure documents to make certainthe total cost value of the expended items isbeing posted to the appropriate column. For anyexpenditure documents containing items that werein the retail outlet at the time of expenditure, wasthe retail total posted to the Financial ControlRecord (NAVSUP 235)? In a combined opera-tion, of course, all expenditures would be postedto the Financial Control Record.

Distribution

Finally, you should check the various expend-iture files to learn whether documents are beingproperly distributed. You should use the appen-dixes of this rate training manual as an aid. Someof the questions you should ask yourself are listedbelow.

Is a copy of each document to which anexpenditure invoice serial number has beenassigned filed in the Expenditure Invoice File?

Has a copy of each survey been forwardedto the appropr iate F A A D C L A N T o rFAADCPAC?

Are surveys to the Navy Stock Fund filedon board with the surveying officer?

EXPENDITURES OFOTHER SUPPLIES

As mentioned before, you, as duty supplyofficer, may be required to perform certainfunctions of supply that go beyond your rating.As the duty supply representative, you may berequested to expend supply material. An ex-penditure, in supply management, is one of thefollowing transactions.

Issue

Transfer

Survey

Each of these will be briefly discussed and theappropriate references for detailed coverage willbe stated.

Issues

All issues of ship’s store stock should be madeat cost price except health and comfort items.Issues of health and comfort items should be madeat prescribed retail prices. All issues of standardNavy clothing items must be made at standardissue prices. All health and comfort issues mustbe made from retail outlets and transactions mustbe posted to the Ship’s Store Afloat FinancialControl Record (NAVSUP 235). The retail andcost prices and extensions should be shown on theRequisition and Invoice/Shipping Document(DD 1149) covering retail items. Issues made fromthe ship’s store should be limited to the follow-ing circumstances or conditions:

1. For health and comfort items2. To survivors of marine and aircraft

disasters3. To merchant ships in distress4. For burial of the dead5. To Marine Corps personnel6. To the enlisted dining facility (general mess)7. For ship’s use (OPTAR)8. For use in services activities

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Figure 5-6.—Auditing a price change.

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Under all circumstances, the commandingofficer (or his delegated representative) mustapprove all issues for health and comfort itemson a Request and Receipt for Health and Com-fort Supplies (DD 504). The commanding officermust approve all issues for standard Navy clothingon a Requisition Receipt, Men’s (NAVSUP 28)or a Requisition Receipt, Women’s (NAVSUP28A). Before the forms are sent to the com-manding officer for approval, the member’sname, social security number, and pay statusshould be verified and a photostat copy of themember’s ID card should be attached to theforms.

Detailed instructions on issue procedures canbe found in the NAVSUP P-485, NAVSUPP-487, and in the rate training manual Scorekeeper3 & 2 .

Transfers

A transfer is the movement (including turn-in)of material from the custody and records ofa ship to the custody and records of another shipor shore activity.

Equipment or material cannot be transferredfrom Navy ships without the approval of the com-manding officer. Supply officers, however, mayobtain blanket authority from the commandingofficer to make transfers. Such authorization isnormally provided through the ship or supplydepartment organization manual. Under no con-ditions are stores to be transferred without theknowledge and authority of the supply officer.

In transferring material to afloat forces, youmust use a DD 1348. The detailed procedures forcarrying out such a transfer are found in theNAVSUP P-485 and in Storekeeper 3 & 2. Thebasic procedure you should follow is listed below.

1. Check stock records to be sure you havethe material on hand.

2. Get approval for the transfer.3. Prepare a DD 1348 or a DD 1348-1.4. Send a copy of the invoice to the storeroom

as authority for the transfer.5. Transfer the material to a working party

of the requesting activity, taking a receipt fromthe officer or petty officer in charge.

6. Return the transfer document to the supplyoffice for processing by the recordskeeper.

In transferring material to ashore supplyactivities, you will use a DD 1348-1 or a DD 1149.For detailed procedures concerning material

turn-in, you should consult the current NAVSUPP-485. You will normally turn material in to anashore activity for one of the following reasons.

The material is no

The quantity heldallowance or in excess oflimits.

The material is

longer required.

is in excess of youryour authorized high

in need of repair,represervation, or is being turned in for salvage.

There are various other specialized types oftransfers you may need to use, such as a transferof stock to the Marine Corps or to merchant ships.Detailed instructions for these types of unusualcircumstances are found in the NAVSUP P-487.You should consult this publication before youmake any specialized transfer of stock.

Surveys

A survey is the expenditure procedure requiredby U.S. Navy Regulations for naval material ofthe following categories.

Condemned as a result of damage,obsolescence, or deterioration

Appraised as a result of loss of utility

Acknowledged as nonexistent as a resultof loss or theft, necessitating the removal of theaccountable material from the records of theholding activity

The requirements for a survey action anddetailed procedures for carrying out a survey arefound in the NAVSUP P-485 and in Ship’sServiceman 3 & 2, module 2. You should consultthese publications for the procedures you shouldfollow for cost survey actions.

EXPENDITURES ON SHIPSWITHOUT SUPPLY CORPS

OFFICERS

All the basic types of expenditures can be doneaboard ships without Supply Corps officers.However, there are some variations with whichyou should be familiar. Detailed procedures arecontained in your NAVSUP P-487.

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If you are on a ship without a Supply Corpsofficer, you should forward the original and onecopy of each expenditure document to theappropriate FAADC at the end of the month.You should post expenditures only to anExpenditure Invoice Log and to the Stock Tally(NAVSUP 209) cards. There is no Journal ofExpenditures (NAVSUP 978) on a ship withouta Supply Corps officer.

SURVEYS

You must carry out surveys of ship’s storestock by a formal survey. You should make allsurvey expenditures of ship’s store stock at theunit cost price on the Report of Survey (DD 200).You will not prepare surveys for money valueonly.

ISSUES

Since ships without Supply Corps officersgenerally have one person in charge of both thebulk storeroom and the retail store, a breakoutdocument is not required. However, issues for useto the barbershop or laundry must be documentedon an Intrastore Transfer Data (NAVSUP 973).Other types of issues, such as gratuitous issues andissues for health and comfort items, are discussedin detail in the NAVSUP P-487,

SALES TO NAVY EXCHANGES

On a ship without a Supply Corps officerassigned, you can expend ship’s store stock bysales to Navy exchanges. Sales of stock from yourship can be made to Navy exchanges by mutualagreement except in the case of tax-free tobaccoproducts. You cannot sell tax-free tobaccoproducts to any Navy exchanges located in theUnited States.

For products other than tax-free tobacco, youcan use sales to Navy exchanges to dispose ofexcess ship’s store stock. On each invoice

concerning a sale to a Navy exchange, you mustenter the following statement.

“Make checks payable to the Treasurer ofthe United States.”

Details concerning procedures you shouldfollow for making sales to Navy exchanges froma ship without a Supply Corps officer assignedare found in the NAVSUP P-487.

Up until now, you have probably been in-volved with the routine maintenance of ship’sstore stock and sales records, invoices, dealer’sbills, and other standard records. As a seniorShip’s Serviceman, you will find that the scopeof your work will increase in terms of control,accountability, and responsibility. From the timeship’s store stock is ordered until after it isexpended from the records, you may be govern-ing the accuracy with which the stock is main-tained and accounted for in the records. Yourspan of control will increase as you begin tosupervise the work of other people as theyperform the routine receipt and expenditure tasksthat are so important for a successful ship’s storeoperation. Your responsibilities will increase asyou make certain your people are performingtheir duties correctly and an accurate accountingexists for all stock in and out of your ship’s store.Your accountability will increase as you begin toaudit the procurement, receipt, and expendituredocuments and records for your ship’s store stock.Just as you must verify the accuracy of yourrecords, you will also use this information foryour internal stock and financial reports.

In your responsibilities for the receipt andexpenditure of ship’s store stock, you mustbecome a successful auditor and supervisor. Yoursuccess at these duties will depend largely uponyour knowledge of the correct procedures andyour ability to make certain they are beingfollowed correctly. The information presented inthis chapter and in the references cited wasdesigned to help you accomplish these goals.

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CHAPTER 6

SHIP’S STORE

As a senior Ship’s Serviceman, you will haveever-increasing responsibilities for the supervisionof the retail store, vending machine, and foun-tain or snack bar operations. In each of thefollowing sections, the principal factors withwhich you, as a supervisor, should be concernedare discussed.

SALESROOM SUPERVISION

As a supervisor of the retail store operation,you will be concerned with selecting an effectivestore operator and improving the relationshipbetween the operator and the customers. You willhave the responsibility for improving theappearance of your ship’s store through effectivevisual merchandising (displays and signs). Finally,you will bean assistant to the ship’s store officerin maintaining strict financial control of the storeoperation.

THE STORE OPERATOR

As a senior Ship’s Serviceman in the sales divi-sion, you will be responsible for assisting theship’s store officer in selecting a ship’s storeoperator. Also, you will have a continuing respon-sibility for training the store operator. You musttrain the store operator to operate the retailactivity according to proper procedures. You mustalso convince the store operator of the importanceof good customer service.

Selection

The most important problem you will faceinitially is the selection of suitable and capableretail store operators. Based upon fleet experience,the best policy you can follow is to make certainthe operator of a retail activity is rotated at leastevery two accounting periods, In fact, some typecommanders make this a requirement. After 8months’ experience in the store, a retail store

OPERATIONS

operator will usually have a good knowledge ofthe retail operation and the associated controlsand records. Some individuals will be affected bythis knowledge to the extent that they may try tobeat the system. They may use various methodsthat they hope will result in the undiscovered theftof money and/or materials. Leaving one operatorin the store indefinitely also invites collusionbetween the operator and the recordskeeper asthese two people become used to working withone another.

Selection of the proper person as storeoperator greatly reduces the chance of financialloss in the store. To this end, there are some pointsthat you should keep in mind when you aremaking your recommendation to the ship’s storeofficer. The person you select should be honest,dependable, and free of excessive financialworries. While a retail store operator does nothave to be a genius, this person should at leastbe able to perform simple addition and makechange with accuracy.

Selection of the proper person can also havea great effect on sales and customer satisfaction.The operator’s personality should be basicallypleasant, or at least inoffensive and consistent.It is not necessary that the operator be a friendto everyone aboard ship or even be known tothem. In many cases, it is better to have anoperator who is somewhat unknown as this willeliminate a great deal of conversation time in thesales line and reduce special favor requests. Interms of personal habits, the store operator shouldbe clean and neat. The person selected should alsobe willing and able to learn and apply someof the principles of salesmanship and visualmerchandising.

To find such an individual aboard ship issometimes difficult. You should try, however, torecommend a person who shows as many of thesequalities as possible. Many qualities, such ashonesty, are not readily apparent. This is whereyour ability as a leader and judge of your peoplewill come into play.

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Customer Service

Once a store operator has been selected, youwill have a continuing responsibility for improv-ing customer service—the relationship between thestore operator and the customers. The success ofa ship’s store in meeting its purpose and object-ives is dependent to a great degree on the face-to-face relationships between the store operatorand the customers. Desirable merchandise andattractive displays are important; however,customer satisfaction can be assured only by aconscientious, responsive store operator. You, asa supervisor, must impress upon your operatorjust how important a retail store operator’s jobis to the general morale of shipboard personnel.

The first thing that a customer notices and usesin forming an impression of a retail store operatoris the operator’s personal appearance. (The ap-pearance of the store itself will be discussed later).It is important for the store operator to projecta correct and neat personal appearance. A ship’sstore operator who wears a Navy uniform proudlyand takes pride in personal appearance isindicating to the customer that this operator haspride in the job. Thus, you should try to instillthis pride in the store operator by personalexample and constructive criticism.

The second thing that is important to customerservice is the attitude of the store operator towardthe job and the customers. In most cases, the storeoperator’s billet is strongly desired by Ship’sServicemen in the division. So, a poor attitudetoward the job will usually not be a problem.However, as a leading Ship’s Serviceman, youshould encourage the store operator to do morethan just an adequate job. You should persuadethe operator to continue to improve the store byworking on visual merchandising and to passalong requests of the crew.

You will discover that most problems occurin the area of the store operator’s attitude towardthe customer. Too often, the operator may besmug and conceited with the job or the busyschedule. You should inform the operator thatsuch an attitude only shows lack of concern forthe customer. Displaying a negative attitudeand using offensive language undermines thecustomer’s confidence in the store operator’sability to be of assistance.

Also, you should encourage the store operatorto be responsive to the customer’s needs eventhough the needs may at times appear to be unim-portant. For example, a customer may considera question about the possibility of returning a

newly purchased watch for a refund to beimportant because the customer has saved up themoney to pay for it and now the watch doesn’twork. The operator should not ridicule such arequest by saying, “Everybody knows all sales arefinal!” The customer obviously thought theproblem was important enough to bring it to theattention of the operator. A courteous explana-tion of how the customer might be able toexchange the watch should be offered.

In summary, you should encourage the storeoperator to be as responsive and helpful to thecustomer as the operator would personally desireto be treated. A more detailed discussion of theimportance of effective customer services ispresented in the Navy Customer Service Manual,NAVEDTRA 10119-B.

VISUAL MERCHANDISING

The basic purpose of any ship’s store is to givemaximum service to patrons. Effective displaysare essential to the rendering of maximum service.Effective displays ensure that all personnel aboardare afforded the utmost shopping conveniencewith a minimum of effort and time. Effectivedisplays also allow the merchandise to bepresented in an attractive and pleasant setting.Displays have the task of informing, educating,and impressing the patrons of the quality, price,and use of the items. Displays let patrons knowwhat is available and help them to make goodselections.

A secondary purpose of good displays is tosell merchandise and to produce the profits thatwill be turned over to the ship’s recreation fund.If properly used, an attractive store front can sellmerchandise 24 hours a day, 7 days a week. Per-sonnel engaged in their duties and coming andgoing to meals, movies, and living compartmentsmay pass the retail store several times each day.The displays in the store should be able to turnthis traffic into shoppers, and shoppers intobuyers. Imagine the loss in sales you would haveif the store front amounted to nothing more thana rusty expanded metal screen covering a dirty,poorly lighted display of cigarettes andtoothpaste.

Principles

To be effective, displays must meet certainrequirements. You, as the senior Ship’s Service-man, should help and encourage the ship’s storeoperator to attain these requirements. The

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following principles apply to the entire store, notjust the showcase or store front.

Attractive—The display should enhance thebeauty of the merchandise and reveal itsusefulness and qualities. The area in which themerchandise is displayed must be clean. You mustnot allow finger smudges to remain on fixturesor on the Plexiglas. Decorations always add tothe attractiveness of a display. They change theatmosphere of the store, remind the patrons ofthe seasons, and may very well give a newappearance to merchandise that has been in stockfor some time. The use of color is also animportant asset. You can use color on the shelves,on the showcase backing, and throughout thestore. The merchandise must always look new,clean, fresh, and inviting. The most meticulousdisplay will not persuade patrons to purchasejunk. On the other hand, top-quality merchan-dise will suffer a visual markdown if it is displayedcarelessly.

Easily seen—The best area in the ship’s storefrom the patron’s point of view is eye level. Thisis called the golden area of retail display. Smallitems that would be otherwise overlooked shouldbe displayed in this area. The golden area is alsothe best location for unknown or new items. Thetype of response a new item featured at this levelreceives may indicate future sales potential of theitem. Larger items should be placed on the lowershelves. Labels on larger items are easier forcustomers to see because the size of an item com-pensates for its distance from the customers’ eyes.Keep in mind that the major concern is themerchandise itself. The merchandise must neverbe hidden by signs, labels, or decorations.

You can use brightly lighted display cases tomake the merchandise more easily seen. If youuse fluorescent lights, make certain they are in-stalled vertically so there is an even distributionof light to all parts of the case. Replace all burned-out lights immediately. Normally, it is best tocover the back of the showcase with opaquesliding doors or curtains. This will prevent thecustomer’s eyes from wandering through thedisplay into the interior of the store.

Quickly identified—The use of signs or ticketshelps good customer shopping and speeds up thebuying process. Before preparing signs of yourown, consider what already has been prepared foryou. Most items have labels or informative copyon the packaging. Place this information in sucha manner as to make reading easier. You can alsouse newspaper or magazine advertisements. Visualmerchandising support services are available to

you from almost all Navy exchanges. You canobtain these services in connection with ship’sstore merchandising. The services can be providedduring in-port periods from a Navy exchangeserving the local area. For this reason, travelorders will not be needed. Remember the costsof support services from the local Navy exchangeare reimbursable. The costs will usually includepayroll charges for the visual merchandisingspecialist and the cost of materials.

Display the item to illustrate its purpose anduse. The customer deserves to know why themerchandise is a good buy. The seller shouldsupply the store operator with information aboutthe item. The store operator should then pass onthis information to the patrons. The types andcharacteristics of an effective sign will be discussedlater in this chapter.

Neatly arranged—Merchandise must alwaysbe neatly arranged. When you are using shelvesdirectly behind the selling area of the store, youshould arrange merchandise to fill as much cubicspace as possible. You can stack certain items twoor three deep wherever practical. Display high-priced and pilferable merchandise where theoperator can keep an eye on it.

Accessible—Make displayed material readilyaccessible to the store operator and the customer.By doing so, you will avoid long lines ofimpatient shoppers. You can give better serviceand the patron is less likely to waste time.Merchandise should be arranged to minimize theoperator’s trips or steps away from the saleswindow. Besides speeding up customer sales, thisstrategy also reduces pilferage. Display the fastestmoving items (as determined by available purchas-ing and selling history) where they can be conven-iently reached and handed to the customer. Tryto place this merchandise in an area that is easyto restock. Cigarettes, for example, should beplaced on a lower shelf because they are bulkyitems and must be restocked frequently. Avoidany tendency to place warehouse merchandise inthe display case.

Correlated—Items should be shown togetherif they are related in use or purpose. One itemfrequently suggests another. Usually somecharacteristic in common causes items to becorrelated. The importance of this principlecannot be overemphasized. If necessary, move awhole shelf to achieve proper correlation. Forexample, shoelaces and shoe polish, toothbrushesand toothpaste, and cigarettes and tobacco shouldbe arranged together. Separate areas should beset aside for categories of merchandise that are

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distinctly different, such as jewelry, toiletries, andconfections. In addition to one item sellinganother, correlated display practices help remindthe customer to buy items needed that might beotherwise forgotten. Failure to achieve proper cor-relation in displays makes shopping an annoyingproject. For example, safety razors should bedisplayed on one shelf rather than in several dif-ferent locations. However, this general rule shouldnot discourage you from using vertical displays.When there is a significant range to be displayed,it is wiser to occupy 4 feet of space on three shelvesrather than to use one 12-foot section of shelfspace. A vertical arrangement allows the customerto view the entire range of merchandise in oneglance instead of having to scan a wide horizontaldisplay. Displays should be primarily influencedby the customer’s ease in shopping. Maximize onthe impression the customer gets. Make thecustomer aware of your entire range of merchan-dise and your obvious effort to keep the customerin mind.

Equipment and Facilities

With the above principles in mind, you, as theship’s store supervisor, should always be lookingat possible ways to improve or modernize yourship’s store facility. You should consider the loca-tion, layout, and condition of the on-hand equip-ment. The most desirable location for a ship’sstore would be adjacent to the general mess,recreational area, or other high-traffic spot. Thearea in front of the store should be adequate topermit a free flow of traffic without disturbingshoppers. The layout of equipment both insideand outside the store should be planned for theconvenience of both the patron and the operator.The equipment, whether old or new, should bekept in good working order. Recommendnecessary replacement or repairs without delay.

Modernization

If you find that your ship’s store does not meetthe standards discussed above because of equip-ment that is outdated, unattractive, or nonfunc-tional, you may decide to recommend to the salesofficer that your ship modernize its facility. If youfeel that your ship’s store needs modernization,first sit down and take a good hard look at theareas that need improvements. Then, you canbegin to take the necessary steps to acquire theseimprovements.

Your first step is to complete a letter requestto the Navy Resale and Services Support Office(NAVRESSO) for permission to modernize. (Theletter should state the purpose of the request.) Youshould include a rough sketch of the area to bemodernized. Show the exact dimensions in yoursketches. Note the height between decks, anypermanent piping, ventilation. and the locationand size of any other fixtures that cannot bealtered. Take photographs of the area, if you can.Then, submit your letter request, descriptions,sketches, and photographs to the Director, Ship’sStore Division, NAVRESSO, for review andadvice.

Before taking any action on your request, theNaval Resale and Services Support Office(NAVRESSO), through the Naval Supply SystemsCommand (NAVSUP), will work with the ap-propriate ship logistics manager in the Naval SeaSystems Command (NAVSEA) to make certainthat all space reservations, utility requirements,weight requirements, and other considerations aretaken into account. All these important considera-tions are required by NAVSEA/NAVSUP In-struction 9665.1. NAVRESSO will then preparea recommended layout of the area to be improved.NAVRESSO will also provide cost estimates andprocurement information. Remember, no im-provements can be made to your ship’s storewithout the written approval of NAVRESSO.Also any authorization you receive fromNAVRESSO for improvements should not beinterpreted as a permit for you to expand orenlarge the ship’s store at the expense of adjacentspaces.

A further consideration for your store’s plansis interior shelving. Store shelving is widely usedin Navy exchanges and is recommended byNAVRESSO for ship’s stores. The steel shelvesare easily assembled and are available with orwithout backings. The shelves have steel ticketstrips for price displays. Shelving units may beordered through NAVRESSO.

For the modernized store front, it is recom-mended that you have translucent corrugated fiberglass panels installed in the space between the topof the store front and the overhead. A framedbulletin board with a Plexiglas front that can belocked should be installed in a conspicuous spotnear the store. Price lists, special offers, flyersannouncing merchandise, and notices should beplaced on the bulletin board so they will not clutterthe store front. A sign or decal designating thehours of operation should also be posted whereit can be seen but where it will not obstruct the

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view of any merchandise. Finally, an attractiveSHIP’S STORE sign should be posted where itcan catch the eye of any passing member, for thissign very definitely establishes the location of theship’s store.

What is to be gained by modernizing yourship’s store? The benefits that will accrue aftermodernization are many. They usually includeimproved and more complete displays, increasedrange and depth of stock, increased sales (andtherefore increased profits for the recreationfund), and increased and improved service to thecrew. Finally, and perhaps most importantly,these benefits promote higher morale in the crew.

Accessories

There are many and varied accessoriesavailable to ship’s stores that add to theattractiveness and effectiveness of a display andof the store itself. You should consider the sizeof the store front and the shelving before decidingon the fixtures to buy. Some items that would beappropriate for shipboard use include sock forms,glove hands, and hat forms. Additionally, neckforms and counter pads are available for displaysof ladies’ jewelry and gift items. Fixtures that areconsidered basic for most ship’s stores are shownin the Ship’s Store Afloat Display Guide Supple-ment. Various types of price tickets and holdersmay be obtained. You can also purchase Dymotapewriters and a Mini Press sign machine formaking signs.

Decorations that arouse customer interest andadd to the appearance of merchandise on displayare available to ship’s stores. The All SeasonDisplay kits include display material suitable foralerting customers to all major seasons and specialevents. Plastic cherubs, garlands, and foil heartstrings are provided for St. Valentine’s Day; for-sythia sprays and honeycomb bunnies for Easter;carnations and ferns for Mother’s Day; oak leavesand sprays for fall; holly, poinsettias, and bellsfor Christmas; and ivy and plastic ferns forgeneral use. The decorations are listed in the NRSVisual Merchandising Supplement for Ship’sStores Afloat.

A homosote or cellotex panel may also be usedin many displays. It is an inexpensive insulationboard that may be easily covered with colorfuldisplay fabric and pinned or taped. Whencovered, the shelf offers an attractive displayarea that will enhance the high quality of themerchandise.

Charging of Display Aids andMajor and Minor Equipment

Minor equipment and supplies for displaypurposes are procured as a charge to Ship’s StoreProfits, Navy. Major modernization equipment,such as store fronts and extensive shelving, shouldbe financed by the local ship’s OPTAR since thistype of equipment involves alteration of the ship’sstructure. However, if the type commander willnot approve funding for these items, you maycharge your own profits for the material. Inthis event, you must request authority fromNAVRESSO to charge the cost of modernizationto Ship’s Store Profits, Navy. Upon writtenapproval from NAVRESSO, the cost of materialsfor improvements can be charged to Ship’s StoreProfits, Navy, functional account 75400. Uponrequest, NAVRESSO may also provide a loan toyour ship’s store to cover the costs of im-provements for a maximum of 3 years.

If properly handled, modernized facilities canmore than pay for themselves with a resultingincrease in sales. There is rarely a valid reason fornot improving ship’s store facilities because ofcost considerations.

Signs

You can enhance your ship’s store displays bythe effective use of signs. Signs are the silent voiceof the store operator. They tell the customer wherethe store is, what is or will be on sale, what theitem is, and its price. Any other information,descriptive or explanatory, that would help thecustomer to shop more easily and quickly shouldalso be included.

In many cases the first and most importantcontact is made with the customer through adisplay. If that display does not convey all thefacts to the customer, it has failed in its purpose.The customer can usually see the shape andcolor of the item but there are many features thatare not so obvious, such as the content of thefabric or product or the size or number of piecesincluded in the package. The sign should conveythis type of information. Careful attention givento sign preparation will very often speed up salesand reduce the amount of time required to serveeach customer.

Store operators concerned with the buying andselling operations should acquaint themselves withthe merchandise and its qualities and features.Then they should condense this information onthe most practical size and type of sign. Signs

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should say something strongly enough to getsomeone to do something.

There are four basic components in thedevelopment of signs that include the importantelements mentioned above. Refer to figure 6-1.

1. The lead line attracts the patron’s attention.a. It can be one word or a phrase.

(NEW!) (GREAT GIFT IDEA!)b. It should be in bold type if it denotes

SPECIAL EVENT, CLEARANCE, or SALE.c. It should be printed in red for greater

emphasis when i t denotes REDUCED,CLEARANCE, or SPECIAL merchandise.

d. It should contain a lighter type face forgeneral or regular information.

2. The head line names or identifies the item.a. It should be in bold face or large type.b. It should be the largest type on the sign.c. It should use as few words as possible.

3. The descriptive information (or copy)inspires a patron’s desire to buy the merchan-dise.

a. It should be set in a different typefrom that used in the lead line.

b. It should be set in type that is thesame weight as the type in the lead line.

c. It should be no longer than two linesof type.

d. It can use bullets to eliminatewordiness.

e. It should not compete with the head linefor prominence.

4. The price information should complete thesale.

a. It should be clearly stated in bold type—as bold or bolder than the head line with no dollarsign ($) when cents are included in price (print 1.75not $1.75).

b. Print $25—not $25.00 when no centsare used.

c. Be specific (print 1.95 to 5.95 not 1.95and up).

d. Use the symbol for cents (¢), not thedecimal, when the price is less than one dollar(print 80¢ not $.80; print 70¢ to 1.25). (Alwaysprint the lowest price first.)

e. Include the unit of measurement (gal.,qt., dz., ea.) with the price to avoid confusion.

f. Avoid broad spreads in the price ranges(print 1.95 to 5.95 not 80¢ to 8.95).

g. Use the phrase priced as marked whena range is very broad.

In summary, if you and the other ship’s storepersonnel are conscientious about trying to im-prove the visual impression of your ship’s store,there are a variety of possible sources of infor-mation and materials that you can use.

SHIP’S STORE OPERATION

The proper and effective operation of theretail outlet(s) of your ship’s store operation isan extremely important job. As a senior Ship’sServiceman, you must not only maintain propercontrol of the operation but you must also

Figure 6-1.—An effective selling sign.

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achieve the purposes of the ship’s store. You willhave the responsibility for making certain thatship’s store personnel follow the necessary regula-tions and procedures. You must maintain yourship’s store operation on a legal basis as well ason a sound financial one.

Authorized Patrons

According to guidelines set forth in the NAV-SUP P-487, ship’s store and clothing stock maybe sold for cash to the following persons:

Officers and enlisted personnel on boardfor duty as ship’s company

Officers and enlisted personnel on boardfor active duty for training or passage en routeto duty that includes Air Force, Army, CoastGuard, Navy, and Marine Corps

Passengers, including foreign servicepersonnel of the United States en route to duty,National Oceanographic and Atmospheric Ad-ministration personnel, and Public Health Servicepersonnel

Accredited United States technicians(military or civilian) who are actually embarkedor assigned on board in an official capacity

Sales to members of the armed services and otherpersons listed in the last two paragraphs above,who are not actually on board, are authorized inremote areas provided there is no armed servicesexchange in the area. All authorized patrons maybuy items for themselves, for their dependents,or for gifts, but they cannot buy for resale orexchange in barter with other persons. Only per-sonnel authorized to wear the Navy uniform maybuy distinctive items of the uniform.

You should make certain the above regulationsare contained on the price list posted at the store.Also, the regulations (the authorized patron sign)should be posted in a conspicuous place near thecash register. With the regulations posted, it iseasier for the store operator to explain the situa-tion. You must see that regulations concerningauthorized customers are strictly followed. Theship’s store and Navy exchange privileges arevaluable and must be protected. The regulationsconcerning various miscellaneous types ofauthorized sales, such as to survivors of marinedisasters, official government organizations,foreign governments, and merchant ships, are

contained in the NAVSUP P-487 and are dis-cussed in the Ship’s Serviceman 3 & 2, module2. You should consult these publications fordetails.

Hours of Operation

To accomplish the purposes of the ship’s store,you should try to have the store open the max-imum amount of time possible. Generally, youshould try to provide at least 42 sales hours perweek when the ship is underway and 20 sales hoursper week while the ship is in port. Within theserecommendations you should still have enoughtime to get breakouts done.

To provide good service, the store must beopen the maximum amount of time possible tomake sure all personnel have an opportunity tomake their purchases. Of course, it is the com-manding officer who has the final approval of theship’s store hours. As a leading Ship’sServiceman, however, you should examine thehours of operation of the retail outlet. Aftercareful observation, decide if the hours aresatisfactory and desirable. If they are not,recommend a change to the ship’s store officer.The approved hours should be written and signedby the commanding officer and posted promi-nently. Use the hours of operation decals so theoperating hours are visible from the outside ofthe store.

Pricing and Marking of Merchandise

Besides helping the ship’s store officer con-cerning the hours of operation, you may also becalled upon to help decide on a pricing policy.Here again the wishes of the commanding officermust be known, as the commanding officer mayhave some strong personal opinions.

The NAVSUP P-487 does not prescribe anymaximum or minimum markup on individualitems of stock. Profits must be sufficient to covermarkdowns below cost, surveys, costs incurredin operating the service activities, and otheroperating expenses. However, there is a ceilingplaced on net profits—they cannot exceed 15 per-cent of the cost of retail sales. Any profitgenerated above this limit is considered to beexcess. You must turn excess profit over to theGeneral Fund. The use of the 15 percent markupis recommended by NAVRESSO.

You should consider the profit objectives ofthe ship’s store. How much money does the com-manding officer expect for welfare and recreation

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each accounting period? If planned programs arelimited, profits can be minimal. If an extensiveprogram is planned, profits must be near the max-imum. Once the markup percentage has beendetermined, it must be applied to the items. Thereare various methods of applying the markup. Asingle markup may be applied across the board.A higher markup maybe applied to luxury items.There is some merit in each of these methods.Another consideration should be the ease inmaking change. Whenever possible, prices shouldbe rounded to the nearest nickel.

Each item of ship’s store merchandise in theretail outlet should be individually marked withthe selling price. (The exceptions to this rule arelisted in the NAVSUP P-487.) In marking eachitem with the selling price, you will promotegreater efficiency in selling, merchandising, andinventorying. This method will also help you toprevent price manipulations. You can orderadhesive-backed, machine-marked tickets that youcan place on each item without damaging ordefacing the merchandise. These tickets aredesigned so they will not detract from salabilityof the item. Attach the price tickets uniformly forsimilar types of items so the items can be readilyvisible with as little handling as possible. Do notuse crayon or grease pencils to price-markindividual items. You can find procurement in-formation on hand-held labelers and price ticketsby consulting the NRS Visual MerchandisingSupplement for Ship’s Stores Afloat. You canprocure hand-held labelers and price tickets bysubmitting an Order for Supplies or Services/Request for Quotations (DD 1155) to the NavyResale and Services Support Office, Staten Island,New York.

As part of the ship’s store’s policy on pric-ing, a price list should be available as a readyreference for the ship’s store operator to use toverify prices. A copy of the ship’s store Inven-tory Count Sheet (NAVSUP 238) should be usedfor this purpose. Any changes to the price list willbe made in ink or indelible pencil. Fountain orsnack bar items should be priced in the samemanner as other resale items discussed earlier inthis chapter except that a sign should be con-spicuously posted at the activity to display pricesof finished fountain products. Upon receipt ofmerchandise in the retail store, the retail storeoperator should price the merchandise accordingto the retail price listed on the transfer document.Merchandise can be re-marked only by authorityof a Retail Price Change (NAVSUP 983). In theevent of revaluation of standard Navy clothing,

merchandise can be re-marked on authority of aReport of Survey (DD 200).

Cash Handling

As a leading Ship’s Serviceman, you may havethe responsibility of ensuring that ship’s store per-sonnel adhere to the regulations governing cashhandling. As you maybe assisting the ship’s storeofficer in maintaining financial accountability, itwill be important that you be thoroughly familiarwith cash-changing procedures.

The first thing you should remember is thatall sales in the ship’s store must be made on a cashbasis. The only exception to this rule is when salesof fountain products are made to private messeson a credit basis. Even then, sales such as thesecan be made only on a one-time basis and pay-ment must be received before the end of theaccounting period.

Only the following items can be accepted ascash for sales made in the ship’s store:

1. U.S. currency—All U.S. currency can beaccepted as cash for ship’s store items.

2. Traveler’s checks—To be accepted as cashfor sales in ship’s stores, traveler’s checks drawnin favor of the purchaser must not exceed thecurrent designated amount over the amount of thepurchase.

3. Personal checks—To be accepted as cashfor sales in ship’s stores, personal checks drawnby the purchaser must be on a U.S. bank accountand stated in terms of U.S. currency. Also, per-sonal checks must be inscribed with the printedname of the purchaser and magnetic ink routingnumbers.

For personal and traveler’s checks to be usedas cash for sales of ship’s store merchandise, ad-ditional information must be placed on thechecks. Generally, personal and traveler’s checksmust bear the signature, social security accountnumber, and duty station of the purchaser. Theship’s store operator must witness the purchaser’sendorsement of the check and must positivelyidentify the purchaser and the purchaser’ssignature by checking the purchaser’s ID card.You should remember that the additional infor-mation is required and necessary for the ship’sstore to be able to collect on uncollectible checks.You should consult the P-487 for details on theinformation that is currently required before acheck can be accepted as cash for ship’s store retailitems.

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As required by the NAVSUP P-487, all cashfrom sales made in the retail store must be clearedthrough cash registers at the time of the sales. Inaddition, all sales must be recorded daily in theCash Register Record (NAVSUP 469) and theCash Receipt Book (NAVSUP 470) according toguidelines set forth in the NAVSUP P-487. Thetypes of cash registers that are considered to besatisfactory and acceptable for use in ship’s storesare discussed in detail in the NAVSUP P-487.

You will need a change fund—usually a max-imum of $50—to open the store. Until you receivesufficient cash from sales to start the change fund,the disbursing officer will advance an amount ofchange to the operator in exchange for a NAV-COMPT 211. You can increase the change fundfor special occasions, such as paydays. All changefunds must be authorized in writing and approvedby the commanding officer. The advance forthe change fund is not a sale and must not be runginto the register.

On ships operating multiple retail sales outlets,the disbursing officer may entrust change fundsto the custody of the ship’s store officer, adesignated assistant, or a collection agent. Thedisbursing officer must have the written approvalof the commanding officer before assigning thecustody of the change fund. In fact, you may becharged with the responsibility of advancing fundsto the retail store operators.

The ship’s store officer is responsible forcollecting the cash from the retail store anddepositing it with the disbursing officer. (Thisresponsibility rests with the ship’s store officeralthough you might be designated as the collec-tion agent.) Cash must be collected from the storedaily. Cash not to exceed $50 may be left in theregister overnight except when more than one shiftis operated. (Type commanders may authorize upto $100 if they feel it necessary.)

All cash must be collected at the end of theaccounting period. Cash must also be collectedif the store will be closed longer than 72 hours,if the ship’s store officer is relieved, or if the retailstore operator is relieved. This rule minimizes anylosses that could occur if someone were to breakinto the store. Mandatory cash collections willsave you the burden of advancing change fundsdaily and exchanging receipts.

Normally, the ship’s store officer (or you, asthe collection agent) will go to the store at the closeof business each day to make the collection, tak-ing the Cash Register Record (NAVSUP 469)along. The ship’s store officer or the designatedcollection agent who has the only key to the

register will record the ending register reading inthe appropriate column of the NAVSUP 469. Bysubtracting the day’s beginning reading from theending reading, the ship’s store officer or agentcan determine the value of cash received duringthe day. This total is added to the amount ofmoney that was left in the register for change atthe close of business on the previous day. Theresult is the actual amount of cash that shouldbe in the register. Any shortages or overages inexcess of $5 that are not substantiated byoverring or refund vouchers must be examinedand initialed. Such differences would most likelyresult from errors that occurred when change wasmade to customers. It is possible, however, forover- or underrings to be made. If the operatordiscovers the fact at the time, the operator shouldmark the register tape accordingly and make upan Overring/Refund Voucher (NAVSUP 972).Primarily to make the postings easier and to pre-vent errors, you should see that collections aremade to the nearest dollar value. For example,if the actual cash in the register was $173.38, theship’s store officer or the designated collectionagent would leave $49.38 for change and collect$124. The ship’s store officer or agent would thensign the store operator’s Cash Receipt Book(NAVSUP 470) as a receipt for the $124.

You should also remember there are severaloptional procedures for the collecting of cash,such as the use of moneybags and night depositorysafes. If the conditions warrant (as they do onmany larger ships), these procedures should befollowed according to instructions in the NAV-SUP P-487.

As in any other retail operation, there are cir-cumstances when a customer is justified in ask-ing for a refund of cash that was previously paidout for merchandise. The NAVSUP P-487authorizes the ship’s store officer to grant arefund in two cases:

1. When merchandise is guaranteed by themanufacturer and returned within the warrantyperiod

2. When merchandise can be reasonablyassumed to have been defective at the time of saleand is returned within 30 days of such a sale

When a refund is desired and proper, anOverring/Refund Voucher (NAVSUP 972) mustbe completed and approved by the ship’s storeofficer. When cash is collected at the close ofbusiness, the cash should be short by the amountof the refund. A special entry should then be

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made in the Cash Register Record (NAVSUP 469)and Cash Receipt Book (NAVSUP 470), and theNAVSUP 972 should be attached to the applicablepage of the NAVSUP 469.

Defective merchandise that is returned for arefund and that is covered by a guarantee shouldbe returned to the vendor for an adjustment orreplacement according to the terms of theguarantee. Repairs to other merchandise can beprocured from commercial sources if attempts tosecure replacement or repairs from the vendor areunsuccessful. In some cases, defects may be suchthat the merchandise may be sold on board atreduced prices or surveyed as a charge to ship’sstore profits.

Whenever possible, cash received from salesmust be deposited daily with the disbursingofficer. There may be occasions when it will beimpractical for you to deposit the cash daily. Forexample, the disbursing officer or agent cashiermay both be unavailable to receive the deposits.On these occasions all cash on hand, except thecash left in the cash register overnight, should beretained in a safe under the personal custody ofthe ship’s store officer or designated collectionagent.

On small ships when the ship’s store officerand the disbursing officer are the same person,no receipt is required for the daily deposit of cashreceived from sales in the ship’s store. However,if a collection agent is appointed or if the ship’sstore officer is not the disbursing officer,then the disbursing officer must give the ship’sstore officer (or the collection agent) a receipt forship’s store cash deposits. The receipt is made ona separate Cash Receipt Book (NAVSUP 470).

At the end of the month, all NAVSUP 469sand NAVSUP 470s must be totaled. A Memo-randum Cash Sales Invoice (DD 1149) should thenbe prepared to include the totals. These pro-cedures are discussed in greater detail in the NAV-SUP P-487 and in Ship’s Serviceman 3 & 2,module 2.

If you area collection agent, your NAVSUP469 and NAVSUP 470 (covering deposits with thedisbursing officer) should be submitted daily, ifpossible, or at least twice weekly to the ship’s storeofficer. The ship’s store officer will review cashsales information entries, check amountsdeposited with the disbursing officer, and initialthe entries to show they have been checked. Atthe end of the accounting period, the ship’s storeofficer will verify entries of sales in the FinancialControl Record (NAVSUP 235).

Cash-handling procedures are not com-plicated, yet supply management inspections(SMIs) reveal repeated errors in this area. You,as the leading Ship’s Serviceman, should takeparticular care in this area to observe your per-sonnel and to conduct adequate training. Youmust ensure strict adherence to the prescribedprocedures.

Tax-Free Tobacco Products

As mentioned in chapter 4, you must carefullycontrol the procurement of tax-free tobacco pro-ducts. Also, you must see that other proceduresare being properly followed in the handling ofsuch products. You cannot sell or transfer tax-free tobacco products, regardless of the manu-facturer (domestic or foreign). These productsmust not be sold or transferred while your shipis within the 3-mile limit of the United States. Sucha sale to individuals on Navy ships without entryand payment of duty is illegal. Also, individualsaboard your ship may not carry tax-free tobaccoproducts ashore within the United States. Anexception to this rule is when your ship loads tax-free cigarettes in the United States and then goesbeyond the 3-mile limit (on maneuvers or other-wise) but does not touch any port outside thecustoms territory of the United States beforereturning to port in the United States. Under theseconditions, U.S. naval authorities may permit amember to take ashore two opened packs ofcigarettes for personal use while that member ison liberty. The member can use these cigaretteswithout duty or tax liability and without customsentry.

Miscellaneous Sales

Besides the usual types of individual sales ofmerchandise, your ship’s store may occasionallyconduct the following types of sales.

GROUP SALES.— Group sales of ship’s storestock are generally used in activities that carry orserve individual units of personnel, such asArmy troops, Marine Corps troops, and largedetachments of Navy and Coast Guard person-nel. Group sales are used most frequently aboardtransport ships. Because of limited space for theretail store and the inconvenient hours of opera-tion, the ship’s store on a transport ship may notbe able to serve all the crew members and trooppersonnel. In these cases, a representative froma crew or troop unit can gather individual orders.

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The representative then presents the order to theretail store operator. The store operator assemblesthe required stock and the representative makesthe purchase. This method is convenient aboarda transport as the representative can purchaseship’s store stock at times other than the regularhours of operation.

BULK SALES.— Bulk sales can be made toany activity that is authorized to buy ship’s storestock at cost price. Normally, bulk sales are madeto Navy exchanges, Military Sealift Commandexchanges, and other ships that do not operateship’s stores. Bulk sales can be made to otherships whenever these ships are not providedwith a composite recreation fund. For example,submarines are normally provided with recrea-tion funds by a submarine tender (AS). Thecrew on a submarine must buy stock at retail

from the ship’s store aboard their owntender.

Generally, a representative of the activitydesiring to buy stock at cost will notify the ship’sstore officer a day or two in advance. The advancenotice allows the ship’s store officer to checkavailable stocks and ready them for sale. Therepresentative then presents a DD 1149, as shownin figure 6-2, listing the items desired andquantities requested to the ship’s store officer. Therecordkeeper adds the unit cost prices and costextensions. The statements Approved (signed bythe ship’s store officer), Payment Received (signedby the store operator), and Material Received(signed by the receiver) are added to the DD 1149.Refer to figure 6-2.

Bulk sales are normally made through theresale outlet since cash is being received.Therefore, any items that carry a markup must

Figure 6-2.—Documentation for a bulk sale.

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be marked down to cost price. The price thatresults will cover the loss in financial responsibilityof the operator, since the operator will receivecash for only the cost value of the merchandise.The store operator can then receive the cash forthe stock sold and can be fully compensated forthe loss in material from the operator’s custody.The money received is rung into the cash registerjust as it is for any other sale. However, each bulksale requires a separate entry to be made in boththe NAVSUP 469 and the NAVSUP 470.

At this time, the value of the DD 1149 is notposted to any of the records. One copy is filedin the Cash Sales File, one copy goes to the storeoperator, and the remaining copy becomes partof the Accountability File. The original andremaining copies are returned to the receivingship. At the end of the accounting period, thevalue of all bulk sales documents in the Cash SalesFile is obtained and posted to the Journal ofExpenditures (NAVSUP 978). Keeping bulk salesseparate from the regular cost of sales is anecessary task. By keeping your bulk salesseparate, you avoid payment of the NAVRESSOassessment on sales that by regulation can generateno profit.

An optional procedure exists for separateoperations that normally have a large volume ofbulk sales. Such bulk sales may be made directlyfrom the bulk storeroom. This procedure requiresa portion of the storeroom to be maintained asa bulk salesroom. You must maintain financialcontrol at cost (on a NAVSUP 235) over the bulkstoreroom custodian for stocks in this area of thestoreroom. Breakouts for bulk sales should bemade in the same manner as a breakout of stocksto any other resale facility would be made. Sincethe bulkroom custodian is held responsible at cost,the need for a markdown before bulk sales iseliminated.

Security for Ship’s Store Spaces

As a leading Ship’s Serviceman, you shouldconstantly remind your ship’s store personnel ofthe need for maintaining tight security. Securityprecautions to be followed during receipts andbreakouts have already been discussed. However,you should also impress upon the retail storeoperator the importance of locking the store com-pletely whenever the store is left for any reason.Locking the store completely simply means usingthe complete security system that is installed inyour store.

All ship’s store spaces require dual lockingprocedures. A dual locking system includes akeyless padlock and a dead bolt-type lock. If adead bolt-type lock is not practical, a high securitylock must be installed. Both locks must be usedat all times whenever the store is unattended bythe ship’s store operator. The regulationsgoverning the security of ship’s store spaces andthe use of locks are briefly discussed below.

There are two security groups assigned to allsales operations. These security groups are GroupIII and Group IV. Group III spaces consist of theship’s store retail and clothing outlets, thefountain or the snack bar areas, the vendingmachines, and the bulk storeroom. All Group IIIspaces must be secured according to guidelines setforth in the NAVSUP P-487.

Keyless padlocks must be used to secure allGroup 111 spaces. Each keyless padlock is pro-vided with a. setting-in key and instructions forsetting the combination. The combination foreach keyless padlock should be placed in aseparate envelope with the name of the spaceannotated on the outside. The custodian of thespace must set the combination, record it on asheet of paper, and place the paper and thesetting key in an opaque envelope. The custodianmust then seal the envelope and sign the flap inthe presence of the ship’s store officer. Theresponsible custodian must not record the com-bination anywhere other than on the paperturned over to the ship’s store officer. In addi-tion, the custodian must never disclose the com-bination to any other person. Upon receipt of thesealed envelope, the ship’s store officer will signhis name and the date over the flap in the presenceof the custodian. The ship’s store officer will thenaffix transparent tape over the flap and retain thesealed envelope in his safe.

Whenever the keyless padlocks are notavailable under stock number 5340-00-285-6523,you should use the key-type padlocks under stocknumber 5340-00-682-1508, along with a numberedlead or car seal. Make sure the seal number isrecorded in the car seal number log. The key-typepadlock should be used only until the keyless-typelocks become available. Duplicate keys for locksto Group 111 spaces should be handled accordingto methods prescribed in the NAVSUP P-487.

In addition to a keyless padlock, a dead boltdoor lock should be installed on all doors leading

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into Group III retail and bulk storeroom spaces.Where this is impractical, a high security key-typepadlock with a shrouded shackle should be in-stalled. Stock numbers for procurement of theseitems are available in the Afloat Shopping Guide,NAVSUP P-4400.

Remember, your ship’s damage control pro-cedures must be considered whenever additionallocks are installed on doors leading to Group IIIspaces. Hinges must be installed on the doors sothat the hinges will not be exposed. Hinge pinsthat are exposed should be tack-welded so anyattempt at removal will be thwarted. For regula-tions covering emergency entry into Group IIIspaces, consult your NAVSUP P-487.

Group IV spaces consist of all service activitiesincluding the barbershop, the tailor shop, and thelaundry and dry-cleaning service areas. Thesespaces are classified as Group IV spaces providedno cash sales or other cash transactions are madethrough these service facilities or no materialintended for ultimate cash sale is stored in thesespaces. (Otherwise, the spaces must be placedunder Group III security.)

Each of the Group IV spaces must be pro-vided with its own lock. The original key to thelock of each Group IV space must be differentfrom the keys to any of the other Group IVspaces. The person who is in charge of the spaceduring working hours should retain possession ofthe key to that space. After working hours, thekey should be turned over to the duty pettyofficer who will place the key in the general keylocker in the supply office. Any duplicate keyswill be kept in the supply office key locker, in aspecial duplicate key locker, or in the supplyofficer’s safe. A master key, an original, whichwill pass all locks in Group IV spaces, may beretained in the custody of the supply officer orhis designated assistant. The duplicate master keyshould be retained in the custody of the supplyofficer. The use of car seals is discussed in yourNAVSUP P-487. Consult this publication for fur-ther details.

Sanitation

Sanitary regulations approved by the seniormember of the medical department must beposted prominently in all service activitiesoperated under the ship’s store. These regulations

must be enforced rigidly. As senior petty officer,you must carry out your responsibility for ensur-ing that your people are complying with thesanitary regulations posted in their spaces. Sanita-tion is even more important in the ship’s store,since the obvious observance of proper sanitationcreates a favorable impression with the customers.For detailed information on mandatoryregulations governing sanitation, refer to NavalMedical Command publication 5010 (NAVMEDP-5010).

SALESROOM SUPERVISION ONSHIPS WITHOUT SUPPLYCORPS OFFICERS

You can apply much of the information youhave already read in this chapter to salesroomoperations on ships without Supply Corps of-ficers. However, there are some variations in thecash-handling procedures that you should know.The next paragraphs should provide you withsome of the basic information you will need forsupervising salesroom operations on ships withoutSupply Corps officers.

Cash received from sales in the ship’s storemust, at the time of sale, be cleared through a cashregister. (The paid out key should be blocked toprevent its use.) Cash should be recorded in theCash Receipt Book (NAVSUP 470) according todirections in the NAVSUP P-487. Collectionsfrom the ship’s store should be made at thefollowing times:

When the total amount in the register isin excess of the change fund by $25 or more

When the retail store is to be closed fora period of more than 72 hours

At least once a week

On the last day of the month that the storeis open

When there is a change of ship’s storeofficer or ship’s store operator

In addition to the Cash Register Record(NAVSUP 469), the ship’s store officer shouldmaintain a cashbook as a record of the amount

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of cash collected or transferred. A samplecashbook is shown in figure 6-3.

Whenever practical, the ship’s store officershould deliver the funds (in the ship’s storeofficer’s custody) to a disbursing officer on aweekly basis. The document that should be used totransfer such funds is a cash sale Requisition andInvoice/Shipping Document (DD 1149) that mustbe prepared in an original and minimum of fourcopies. The format for the DD 1149 is shown infigure 6-4. The original and three copies of theDD 1149 are sent to the disbursing officer. Thedisbursing officer completes the certification on

the original of the DD 1149 and returns it to theship’s store officer.

The signed original and one copy of the cashsale invoice (DD 1149) for each deposit made withthe disbursing officer should be forwardedmonthly along with the Financial Control Record(NAVSUP 1099) to the Fleet Accounting andDisbursing Center, Atlantic (FAADCLANT) orPacific (FAADCPAC), as appropriate. (See yourcurrent NAVSUP P-487 for additional details.)

When it is not possible to turn in all funds toa disbursing officer on the last day of the month,the ship’s store officer should forward a certifica-tion along with the monthly transmittal of

Figure 6-3.—Ship’s store officer’s cashbook.

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6 - 1 5

documents to the appropriate FAADC. The certi-fication should be in the form shown in table 6-1and must be signed by the ship’s store officer andby members of the cash verification audit board.

Weekly, the ship’s store officer must count allthe cash and receipts for cash and then must checkthe total figure against the figure shown in theBalance On Hand column in the cashbook. Afterverification, the ship’s store officer certifies theamount and signs in the cashbook that:

“A money count has been made. Thebalance on hand agrees with the cashbookfigures.”

(Ship’s Store Officer)

At the end of the month (after the ship’sstore officer closes out the cashbook with thiscertification), the Statement of Disposition ofCash Sales and Funds Carried Forward shouldbe prepared in an original and two copies, asshown in figure 6-5. As mentioned previously,the original and one copy is forwarded to theappropriate FAADC by certified mail withthe original and one copy of each cash saleinvoice for the period. The procedure forclosing out the records at the end of anaccounting period and submitting vouchers tothe appropriate FAADC is contained in chapter7. For further information concerning theprocedures discussed above, you should consultthe NAVSUP P-487.

Table 6-1.—Certification Statement

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Figure 6-5.—Statement of disposition of cash sales and funds carried forward.

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VENDING MACHINE SUPERVISION

In most ships, vending machines area valuableasset to any ship’s store operation because theygenerate a substantial part of the ship’s storeprofits. The high-profit capability of vendingmachines makes it possible for your ship’s storeto sell necessity items with a low markup to thecrew. At the same time, you can still obtain theprofit objectives set up by the commandingofficer. In the cup-type soft drink vendingmachine, the processing of the syrup, water, andCO2 gas is done by the machine. In the other typeof machine, the product—whether it is a canneddrink, candy bar, or package of cigarettes—requires no further processing. Consequently, themachines with finished products are merely ex-tensions of the retail store operation. You, as aleading Ship’s Serviceman, will be responsible forsupervising the operation of the vendingmachines. The areas with which you will be con-cerned are discussed below.

MECHANICAL PROBLEMS

Vending machines are usually not built to thestandards of most shipboard equipment. Theerratic movement of some ships may triggermechanical problems in some types of vendingmachines. The usual abuse inflicted on themachines by irate patrons will also contribute tomechanical failure. When you are supervising theoperation of vending machines, you can expecta certain amount of mechanical failure to occur.

Whenever your machines need repairing, youcan procure the services you need through a com-mercial or Navy exchange repair service. Youmust use an Order for Supplies or Services/Re-quest for Quotations (DD 1155) to procure theseservices. The services should be a direct chargeto Ship’s Store Profits, Navy (SSPN), functionalaccount 75400.

On some ships, you may find vending machinerepair parts already in stock. On the other hand,because of the variety of problems suffered byvending machines aboard ship, you may not beable to anticipate all the repair parts yourmachines will need. The vending machine partsyour ship should carry in stock are coin changers,name labels, and bulbs. You should rely upon therepair service representative to furnish items suchas springs, latches, bolts, and nuts.

Although you may have a wealth of technicaltalent in the personnel aboard your ship, you willhave no guarantee that even one of your members

will be able to repair a broken vending machine.Some of the soda contractors for soda vendingmachines may be aware of your need to havetrained people on hand. For this reason, somecontractors will occasionally hold vendingmachine repair schools in various home ports. TheNAVRESSO fleet assistance team in your area willannounce when these schools are available. Tryto schedule your Ship’s Serviceman in charge ofvending machines for these training sessions. Mostof the repair parts representatives at the sessionswill furnish a list of common items you will need.

SERVICING PROBLEMS

Servicing your vending machines will be a con-tinuous problem. To maintain sales volume, youmust keep the machines clean and supplied at alltimes. The frequency of refilling will depend onthe number of machines you have on board andthe size of the crew.

Besides keeping the machines supplied, youmust see that certain cleanliness standards aremaintained. For example, if you happen to havea cup-type vending machine as part of your ship’sstore operation, you should warn the operator tobe careful when the machine is being filled. Anysyrup that is spilled in the process will soonattract insects. Daily cleaning of the cup-drop willkeep insects away and will help you to maintainan attractive and sanitary appearance for yourcustomers. When the ship is underway, you maynotice a slight spilling when the drinks aredispensed. Do not worry about this. This type ofspillage is normal aboard ship and will draininto a container on the bottom of the machine.

VENDING MACHINE COSTCONTROLS

If you are the appointed collection agent orif you are supervising the overall operation ofvending machines aboard your ship, you mustoversee the collection of cash from vendingmachine sales. The cash collection procedures forvending machine sales are similar to those usedfor the retail store. However, you must record allcash from vending machine sales separately fromsales made in the retail store and from those madein the fountain. The information below will pro-vide you with some general guidelines. You shouldalways consult the NAVSUP P-487 for details onthe currently recommended cost control pro-cedures you must follow in the supervision ofvending machine operations.

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When your ship is at sea, you should collectthe cash from your vending machines daily andimmediately before any repairs to the coinmechanism are made. When your ship is in port,collect the cash from vending machines daily,Monday through Friday, and before you have anyrepairs made to the coin mechanisms. Onweekends and holidays, collect cash from yourvending machine if you expect the volume to ex-ceed $150. Cash must be counted from thevending machines and collected whenever the lastday of the accounting period falls on a weekendor a holiday or whenever any repairs to the coinmechanisms must be made. Remember, daily col-lections will satisfy all collection requirements.

Once every month you must check theefficiency of your vending machine operationby using the Vending Machine Control (NAV-SUP 236). (You will use this record primarilyas an internal shipboard analysis tool. Youwill not submit it to any activity outsideyour own ship.) Retain the Vending MachineControl data with the other records for theaccounting period. Refer to figures 6-6 and6-7 as you read the information below on thepreparation of the NAVSUP 236.

Cup-type Drink Vending Machine

Currently, there are very few cup-type vendingmachines in use on U.S. Navy ships. However,if your ship’s store operation should include a cup-type machine, you must understand the necessaryaccounting procedures associated with its use.

In preparing the Vending Machine Control forcup-type drink machines, you must first take aninventory of vending machine supplies. See figure6-6. In a combined operation, you will simply takethe inventory figure from the NAVSUP 464 thatrepresents the actual inventory. In a separateoperation, the inventory will include only thesupplies in each machine as breakouts will havealready been documented on a NAVSUP 973,After the inventory, you can prepare the syruprecapitulation section of the NAVSUP 236. Ineither type of operation, by recording theopening inventories, then adding receipts, thendeducting surveys, other expenditures, and clos-ing inventories, you can determine the quantitiesof syrup and cups that have been used.

The second section of the report you mustprepare is the output recapitulation. This is thesection that provides you with an analysis of thevending machine operation so you can locate anymalfunction or malpractice. For example, each

gallon of syrup for a cup-type machine contains128 ounces. However, when the operator fills themachine or changes a flavor, there is a smallamount of spillage and loss. In determining thenumber of drinks that should have been soldbased on the quantity of syrup used, multiply thenumber of gallons used by 115—an acceptableaverage figure for the number of drinks left afterspillage and waste. (The drinks contain 1 ounceof syrup and 5 ounces of carbonated water.) Thendeduct the number of drinks for which no cashwas received (test drinks, slugs, and refunds) toobtain the adjusted number of drinks per gallonof syrup. Multiply the adjusted number of drinksby the current price per drink. (The current priceper drink may vary from ship to ship. In fig. 6-6,a price of $,05 is used as the example.) Your nextstep is to determine the adjusted drinks per meter.You can obtain this figure by deducting thebeginning meter reading from the ending meterreading and subtracting the number of no-cashdrinks. Now multiply the adjusted figure by thecurrent price per drink. (In fig. 6-6, the currentprice is $ .05.) Finally, record the amount of cashactually collected from sales. You now have threedollar values to compare. However, these threevalues will seldom agree. You can usually con-sider the value of drinks per gallon of syrup tobe the least accurate of the three. The best indica-tion of what sales should have been will probablycome from the meter reading, since there are fewchances of the meter being faulty. The cash youhave collected should also tell you how manydrinks were sold. However, the cash collectedfigure can be wrong if the changer has malfunc-tioned. (For example, the machine may have sup-plied a drink to a patron and all the moneyback that the patron paid for the drink. Oranother patron may have received a drink but onlypart of the correct change due back from the priceof the drink.) You can also compare the numberof cups used with the number of drinks per gallonof syrup and drinks per meter. You should be ableto analyze these items, determine what theproblem is, and then decide on the possible causesand solutions.

The third section of the NAVSUP 236 is thecost and profit statement. First, determine the costof the syrup, cups, and C02 gas used. This totalis the cost of vending machine sales and will berecorded on line S of the NAVSUP 236. Thisfigure will also be recorded in the Cost of Opera-tion column of the NAVSUP 235. Next, computethe cost of vending machine operations which isthe value of all repair parts used. This amount

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Figure 6-6.—Vending machine cost control (cup-type drinks).

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Figure 6-7.—Vending machine cost control (can-type drinks).

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should be recorded on line R of the NAVSUP 236.Deducting these costs from the money receivedas sales will show you the value of net profit.There is no expected percentage of net profit tosales, since the cost of repair parts can be toovariable. However, the gross profit (sales less costof sales) should be about 60 percent. If grossprofit is less than (or more than) this percentage,you can probably determine the cause from theoutput recapitulation section of the NAVSUP236.

You must record all receipts and expendituresfor cup-type machines in the Vending Machinescolumn of the NAVSUP 235 at cost price. At theend of the accounting period, the inventory at costprice should be posted to the Expenditurescolumn. Sales, as represented by your cash col-lections, should also be posted to the Expenditurescolumn. The difference between the Receiptscolumn and the Expenditures column of theVending Machines column will represent grossprofit or loss. Report all cash received from cup-type drink vending machine sales on line C03 ofthe NAVCOMPT 153.

Can-type Drink Vending Machines

Just as for the cup-type drink machines, youmust also prepare a Vending Machine Control(NAVSUP 236) for each can-type drink vendingmachine you are operating. Refer to figure 6-7as you read the information below on how to usethe NAVSUP 236 for cost control analysis.

Your beginning inventory will be the numberof cans in each machine plus the backup stocksheld by the vending machine custodian. If thevending machine custodian and storeroom custo-dian are separate persons, make sure a dailyrecord is maintained on all cans that were placedin each vending machine. You can use a locallyprepared form for this record. Just place the forminside the door of each machine and make sureall entries are made in ink and can be read. Atthe end of the month, you will use this informa-tion for preparing the NAVSUP 236. The numberof cans placed in each machine will berecapitulated on the NAVSUP 973.

If the vending machine custodian and thestoreroom custodian are the same person, youwill still need a daily log if you have more thanone vending machine. In fact, you will need a logfor each machine. At the end of each month, youshould prepare the NAVSUP 236 from data onthe NAVSUP 464, the NAVSUP 469, or theNAVSUP 470.

In either type of operation (separate or com-bined), your beginning inventory plus yourreceipts minus your surveys, expenditures, andending inventory will equal the number of cansyou have sold.

In completing the Profit and Loss section ofthe NAVSUP 236, you must compute your costof sales. Add the dollar amounts that you havereported on line R of each NAVSUP 236. Younow have the total cost of sales you must reporton the NAVSUP 978 at the end of the accoun-ting period.

For accountability purposes, you must con-sider all can-type drinks sold through vendingmachines as retail items. For this reason, youmust take up the can-type sodas on a separateCanned Drink Vending Machine column of theNAVSUP 235 at retail price. (However, Cost ofOperation items, such as minor repair parts,springs, fuses, and like items should be recordedat cost price in the Cost of Operations columnof the NAVSUP 235.) At the end of the ac-counting period, the difference in money valuenecessary for the Receipts and Expenditurescolumns to be in agreement will represent thedifference between cash received and sales perinventory. You should report the cash receivedfigure on line C03 of the NAVCOMPT 153.

Other Types of Vending Machines

If you are supervising the operation ofvending machines that sell candy, cigarettes,cookies, gum, potato chips, crackers, and otherlike items, you should consider these items asretail merchandise. You must account for andcontrol sales of these items just as you would thesales from any other retail outlet of the ship’sstore.

Use a separate Vending Machine Retail Pricecolumn of the NAVSUP 235 to document the con-trol of these sales. The difference in money valueneeded to bring the Receipts and Expenditurescolumns into agreement will represent thedifference between cash received and sales perinventory. Report all the cash you have receivedfrom these vending machine sales on line CO2 ofyour NAVCOMPT 153. Remember to report thisfigure separately from the figures representingyour can-type and cup-type drink vendingmachine sales.

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Meter Readings

Whenever possible, try to have meters installedin every vending machine under your control.Meter readings will help you to monitor theefficiency of each of your machines. You canoften determine whether or not a machine is func-tioning properly just by checking the meterreadings. Make certain a meter reading is takeneach time cash is collected from a machine. Main-tain meter readings on the NAVSUP 469 in theNumber of Customers column.

If coin meters are not available for yourvending machines, you should balance eachmachine immediately after cash is collected fromthe machine. To balance the machine, make thefollowing entries in any unused column of theNAVSUP 469:

1. Total quantity (in units) at beginning ofperiod, PLUS

2. Receipts (in units) into the machine daily,MINUS

3. Quantity (in units) in the machine at thetime the cash is collected

The resulting figure should represent the numberof units sold (or otherwise expended). Multiplythe units sold by the selling price to obtain thetotal cash value. This figure should agree withyour cash collection figure.

Electronic Amusement Machines

If you wish to operate electronic amusementmachines as part of the ship’s store, you must con-tact NAVRESSO. The Navy Resale and ServicesSupport Office has been designated as the con-trol point for the procurement of electronicamusement machines. Amusement machines areprocured on a lease basis through contractsnegotiated by NAVRESSO. Electronic amuse-ment machines installed on U.S. Navy ships mustbe operated as part of the ship’s store. Of course,all electronic amusement machines you procurethrough NAVRESSO must be compatible with theelectrical and electronic systems of your ship. Theprocedures you must follow to acquire andoperate electronic amusement machines on yourship are discussed in greater detail in the NAV-SUP P-487.

Once your machines are in place, you mustestablish cash control and security procedures.You must use keyless padlocks (or key-typepadlocks, stock number 5340-00-682-1508) tosecure coin boxes inside your amusementmachines. You must also have installed on each

coin box a restraining bar that locks in front ofthe coin box door.

When your ship is at sea, cash from youramusement machines must be counted and col-lected daily and before any repairs to the coinmechanisms are made. When your ship is in port,cash must be counted and collected daily(Monday through Friday) and whenever anyrepairs to the coin mechanism will be made. Whenyour ship is in port on weekends and holidays,cash should be counted and collected if the volumeof electronic amusement machine business exceeds$150 or if prior repairs to the coin mechanism aregoing to be made. Cash must also be counted andcollected when the last business day of theaccounting period falls on a weekend or a holi-day. In all circumstances, daily collections willsatisfy all the cash collection requirements in yourNAVSUP P-487 for the supervision of electronicamusement machines.

You must ensure that the cash collected isrecorded properly on a NAVSUP 470. Eachmachine should be identified on a separate pageof the NAVSUP 470. Make certain cash receiptsfor a certain machine are recorded on the pageof the NAVSUP 470 that is used for thatparticular machine. The person who is responsiblefor operating the machines should retain custodyof the NAVSUP 470.

Meter readings will also help you to determineyour total cash receipts as well as how efficientlythe machine is functioning. The meter readingshould be taken each time cash is collected.Record meter readings in the appropriate columnon the NAVSUP 469. If you have a differencein money value of $5 or more between the cashcollected and the meter reading, refer thediscrepancy to the ship’s store officer.

You must make certain the total amount ofyour collections is deposited with the disbursingofficer after each collection according to the pro-cedures outlined in your NAVSUP P-487. (If forsome reason cash cannot be deposited with thedisbursing officer, the total cash collected mustbe retained in the cash collection agent’s safe.)Upon preparation of the Memorandum Cash SaleInvoice for Deposit of Cash with DisbursingOfficer, the DD Form 1149 must include the totalamount of collections from electronic amusementmachines as a contribution to Ship’s StoreProfits, 178723. At the end of each month, acheck should be requested from the disbursingofficer as a charge to 178723.2301, SSPN,transaction type 21, functional account 75400, inan amount equal to the contractor’s share of the

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cash collected from the amusement machines.This amount should be reported on line C18 ofNAVCOMPT 153 at the end of the accountingperiod.

Dollar Bill Changers

After the installation of a dollar bill changerhas been approved by the type commander, youmust see that these procedures are followed:

1. The dollar bill changer must be installedin a high-traffic area that is well lighted.

2. As an additional security measure, themachine must be safeguarded with a wire meshscreen or a lockable restraining bar across the coinbox area.

3. A separate change fund must be establishedfor the changer according to procedures set forthin the NAVSUP P-487.

4. The person who has been designated topick up ship’s store sales will be responsible forthe machine. This machine will be emptied andrefilled as frequently as necessary and at the closeof each business day.

5. A separate sheet in the NAVSUP 470 (orthe NAVSUP 469, whichever is recommended)must be used so the designated person can recordall transactions to validate the accuracy of thechange fund each time the machine is opened orrefilled. Overages and shortages in this machinemust be shown in the NAVSUP 470 (or the NAV-SUP 469) and must be initialed by the ship’s storeofficer.

FOUNTAIN OR SNACK BARSUPERVISION

Although considered a ship’s store activity, thefountain is a resale outlet. The fountain opera-tion will vary from one ship to another. Someships may not have a fountain area at all. Aboardother ships, an operation may include only theserving of soft ice cream, while a larger fountainoperation may include sundaes, shakes, sodas,and a variety of food items. Some ships includein their fountain a two- or three-flavor sodafountain that dispenses beverages. When you aredetermining what size of operation to have, youshould keep in mind that the fountain’s primaryobjective should be to serve the maximum numberof personnel.

COST CONTROLS

Control of the fountain operation will besomewhat more difficult than control of the

vending machines or the retail store. You, as thesupervising Ship’s Serviceman, should bethoroughly familiar with the procedures. Makecertain cash collections and change funds arehandled in the same manner and with the samecare as they are for the retail store or for thevending machines. Prices must pay for the costof all materials used, such as ice cream mix, cups,spoons, and topping. The fountain activity mustalso produce a consistent profit. An operationalgoal (gross profit percentage) should be estab-lished by the ship’s store officer and should notbe changed within an accounting period. TheNAVSUP P-487 states that the desired operatinggoal for ice cream in a fountain operation is toachieve a gross profit of 35 percent. It alsodescribes a recommended method that will pro-duce a consistent profit. The method provides theanswers to the questions that must be asked soa fountain profit can be determined. For example,how much ice cream is one unit of ice cream mixproducing? There is a form available for record-ing how much ice cream is produced from a can ofmix—the Production Record (NAVSUP 241).

Since the price you charge for each item mustpay for all ingredients and yield a profit, the nextquestion you should ask is, “What is the cost ofeach item that is sold?” To determine this costof sales figure, add up the cost of the mix, cup,spoon, and topping per dish of ice cream to geta total cost to compare with the price on an ItemCost Card (NAVSUP 240). The NAVSUP P-487provides charts that will help you to predict theunit cost for various size dishes of ice cream. TheNAVSUP P-487 also provides a breakdown ofcosts for other items commonly sold in the foun-tain operation.

Finally, you must prepare a financial reportfor the fountain operation as a whole. You shouldprepare this report either daily or weekly on theFountain Cost Control (NAVSUP 239). Prepareanother NAVSUP 239 at the end of the monthto report the cumulative fountain operations forthe preceding month.

The different parts of the Fountain Cost Con-trol (NAVSUP 239) are shown in figures 6-8and 6-9 and are briefly described below.

Part I provides for a determination of salesand cost of sales both for the period since the formwas last prepared and for the accounting periodto date.

Part II provides for an analysis, in totalamount only, of transfers to the categories of

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Figure 6-8.—Fountain cost control (front).

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Figure 6-9.—Fountain cost control (back).

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items and transfers out of the categories ofitems.

Part III provides for each line item the costprice per serving and the selling price. Part III alsoprovides markup information for all itemsmanufactured and sold from the fountain.

Part IV provides cost price information ofbulk items used in the manufacture of fountainresale items.

If your profits are deviating from theoperating goal for the fountain, you shouldanalyze Part II of this form along with the infor-mation on the NAVSUP 240. The items listedbelow are the usual reasons profits are lost:

1.2.3.4.5.6.7.

8.

Incorrect portion quantitiesIncorrect selling pricesWasteOverdispensingIncorrect cash collectionsFood consumption by fountain operatorsFood spoilage resulting from incorrectbuying, overstocked products, inadequaterefrigeration, and carelessnessCarelessness in the checking proceduresfor merchandise received

Besides ice cream products, you can sell retailitems, such as candy and cookies, in the fountain.If there is a special cash register or a separate keyon the fountain register available for ringing upthe sale of these items, you should have noproblem in selling them. Record the retail salesof these items in a separate column on the Finan-cial Control Record (NAVSUP 235).

To force the sales figure for the fountain orsnack bar operation, you must apply the follow-ing equation:

Beginning value of inventory of retail items

PLUS

Value of receipts by breakout of retail items

EQUALS

Total value of receipts of retail items

MINUS

Value of other expenditures by transfers ofretail items (surveys, etc.)

EQUALS

Total value of retail accountability

MINUS

Ending value of inventory of retail items

EQUALS

Total value of sales of retail items

The total value of sales of retail items subtractedfrom the total value of the sales from the foun-tain or snack bar operation will provide the totalvalue of fountain sales. It is this value that shouldbe posted to the NAVSUP 239. The value of salesof retail items must be computed monthly andthen posted to the appropriate column of theNAVSUP 235. The value of sales of retail itemswill not be included on the NAVSUP 239. Pro-cedures for multiple operators are covered indetail in your NAVSUP P-487.

For further details concerning the fountainoperation, consult the NAVSUP P-487. In thispublication, you should also review the sanitationrules which you must strictly enforce. A briefsummary of your supervisory responsibilities inthe area of sanitation is provided below.

SANITATION

As a supervisor of the fountain operation, youwill be vested with the responsibility of pro-tecting the health and morale of shipboard per-sonnel. Unless you are constantly aware of thisduty, you will soon discover how rapidly foodproducts can become a real source of trouble toyou and to the people you are serving.

First of all, you must make certain all medicaldepartment and other official rules and guidelinesare being followed. In fact, before you ever assigna member to work in the fountain area, themember must report to the medical officer for aphysical examination. Also, you can expect a dailyvisit from a medical department representative.The representative will inspect your fountainoperation to ensure that all sanitation proceduresare being carefully followed. The following rulesgovern activities within the fountain operation.Make sure these rules are posted in the fountainarea in a place where they can be easily seen andread.

1. The fountain attendants will be consideredas foodservice workers and the standards forhealth and personal hygiene will apply to them.

2. Food offered for sale will be inspectedperiodically by a member of the medical depart-ment to safeguard the health of personnel.

3. Syrup containers must be maintained in astate of cleanliness both externally and internally;caking or drying must not be allowed to occur.

4. Only paper or plastic cups and plates willbe used in dispensing soda, soft drinks of anykind, and ice cream. Only disposable spoons willbe used for ice cream or ice cream sodas.

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5. All utensils used for dispensing ice creamand other frozen desserts will be kept either inrunning water or in water maintained at 180°Fbetween each serving.

6. All equipment and utensils used in themanufacture of ice cream and frozen desserts willbe cleaned thoroughly, rinsed with clean water,and disinfected just before use with a chlorinesolution containing not less than 50 ppm ofchlorine. The interior of the machine or interiorparts that come in contact with the mixes will notbe touched with the hands after reassembly anddisinfection until the machine is ready fordisassembly and cleaning again.

7. All foods will be kept under secure coversto prevent excessive handling and dust or insectaccess.

8. Refrigerators will be kept clean at all times.No spilled ice cream or syrup should remain onthe bulkheads or deck of the boxes for more thana few minutes.

If you always insist upon strict adherence toofficial health regulations, you will most likelyavoid many sanitation pit falls later on. Also, thereare certain commonsense steps you can take.

Your first concern, of course, should be tokeep everything clean. However, in spite of allpreventive measures, roaches can surviveanywhere. You can safely assume that they arealso surviving somewhere on your ship. Becauseof the types of food products used, the fountainareas will always be your biggest trouble spot, Forthis reason, you must make certain the fountainarea is kept clean at all times. Open syrup cans,drippings from ice cream, and open packages ofcookies and crackers will attract every insect inthe area. Instill in your operators that the entirefountain area should be kept clean during hoursof operation and must be scrupulously cleanedbefore the area is secured for the night. Insist thatyour operators throw away all open packages andthat they wipe every surface clean (including jarsand cans) before the area is secured.

SAFETY PRECAUTIONS

Finally, you should always be on the alert toensure that general safety precautions are beingfollowed by your personnel. Any questionableprocedures should be brought to the attention ofthe ship’s store officer. Your ship will have asafety officer. One of this person’s responsibilitiesis to hold regular inspections of all division spacesfor safety infractions. These inspections will helpyou to keep abreast of your divisional safetyresponsibilities. NAVRESSO publishes bulletinsthat also carry other safety precautions that youshould enforce in your ship’s store operations.

During your regular workday, you shouldalways stress safety as a first item in all trainingprograms. On board ship, there are usually safetyclasses held every week for all training pettyofficers. The safety information you acquireshould always be passed along to crew membersduring regular division training or duringquarters.

As you supervise the operation of a ship’sstore, try to keep in mind the primary reasons forwhich your ship’s store exists. First of all, youare providing a convenient location wherecustomers can purchase health, comfort, or con-venience articles. You are also providing yourcustomers with certain services that will make adifference in their daily lives. The profitsgenerated by your ship’s store will be turned intoother services for crew members in terms ofrecreation and welfare opportunities. However,you are providing much more to the personnel ofyour ship than just goods and services. The mostimportant benefit your ship’s store can offer willbe the most difficult to measure and the mostcomplicated to supply. This benefit is calledmorale and it evolves as a result of good customerservice. Providing good customer service is thegoal to which all the information in this chapterhas been directed.

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RECORDS AND

At the end of an accounting period or at otherrequired times, you, as a leading petty officer, willhave an important responsibility for supervisinginventory procedures, auditing the closeout ofrecords and the preparation of returns, andanalyzing the operation of the ship’s store. In eachof these areas, you will be assisting the ship’s storeofficer in maintaining effective control of theship’s store operation. First, however, you shouldbe aware of the significance of the ship’s storeprofits that appear on the returns: how profits aregenerated by sales and used by the Navy Resaleand Services Support Office (NAVRESSO) andby your own ship to improve the welfare andmorale of shipboard personnel. As you read theinformation in the chapter, keep in mind theimportance of accurate ship’s store returns.Remember, your returns document the financialoperation of your ship’s store.

SHIP’S STORE PROFITS

In chapter 6, the various types of sales fromthe ship’s store, vending machines, and fountainoperation were discussed from the supervisorypoint of view. As you learned in chapter 4, salesare required to replenish working capital (NavyStock Fund). You saw how sales also generateprofit, the value of which is determined by theamount of markup applied to the various items.Profits derived from sales in the ship’s stores areheld by the Treasury Department in a trust fund,Ship’s Store Profits, Navy. In this section, youwill read how ship’s store profits are transferredto the General Fund and the Recreation Fund.You will also learn how certain charges are madeagainst ship’s store profits,

GENERAL FUND

The General Fund is maintained by the NavalSupply Systems Command (NAVSUP) throughthe Navy Resale and Services Support Office

Chapter 7

RETURNS

(NAVRESSO). The General Fund accrues froman assessment that is made on the net cashgenerated from sales in each ship’s store. Theexact percentage of the General Fund assessmentis dependent upon the size of the individual ship’sallowance,

In addition, the General Fund takes in allexcess profits that are reported by certain ships.The net ship’s store profits that are generatedduring a single accounting period should notexceed 15 percent of the cost of retail sales.Profits that are greater than the 15 percent figureare considered to be “in excess” and are accruedinto the General Fund. Finally, the General Fundaccrues from the balance of any ship’s store pro-fits that remain after a ship is lost or decommis-sioned.

A large percentage of the money that accruesto the General Fund is paid to the Chief of NavalPersonnel for the recreation of Navy personnel.A large part of this money is used to finance theNavy motion picture program that is so greatlyappreciated by the fleet, Expenses covering thepurchase and maintenance of athletic equipmentare also among the many benefits supported bythe General Fund. After entertainment and recrea-tion expenses are covered, any remaining moneyin the General Fund is used for the benefit ofindividual ships.

In the case of new ships, the General Fundprovides grants for the initial installation ofship’s store facilities. Existing ships that aremodernizing their ship’s store facilities mayapply for loans from the General Fund to coverthe costs of improvements. Losses that occurwhen a ship closes the ship’s store to enter arehabilitation program can be properly chargedto the General Fund. Other types of losses thatare not chargeable to the Navy Stock Fund (NSF)are also absorbed by the General Fund wheneverthese losses are too great for the individual ship’sstore profits to offset. In fact, many surveys thatcannot be absorbed by local profits are paid offby the General Fund.

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Probably the largest expenditure from theGeneral Fund for individual ships is for the pro-curement of vending machines. The Navy Resaleand Services Support Office (NAVRESSO) is theprocurement activity for all vending machines,popcorn machines, and soft ice cream machines.NAVRESSO loans the funds to ships at the timethe machines are purchased. These loans must berepaid to the General Fund according to instruc-tions provided by NAVRESSO.

RECREATION FUND

Profits in the trust fund belonging to theship are transferred to the Recreation Fund forexpenditure as the commanding officer deemsnecessary. Not all the profits available need to bepaid into the Recreation Fund. Certainly the com-manding officer will make the decision about howmuch is to be transferred, but the ship’s storeofficer must make the appropriate recommenda-tion concerning the reserve that should be retainedon the accounts of the ship’s store.

As a senior Ship’s Serviceman, you may beable to foresee problems that might require funds.For example, if the ship is entering a yard period,the laundry and ship’s store may very well beclosed. It will be necessary for the laundry to bedone ashore. The cost, of course, will be greaterthan the cost of doing the laundry in your ownlaundry facility. Also, there will be fewer profitsgenerated from the store to pay the extra expenses.You will have to keep some money in the ship’sstore’s accounts against which you can charge thecosts of the outside services you must procure.If you expect a considerable loss because ofsurveys or markdowns below cost, retain someship’s store profits to cover these losses. The factthat all profits from the ship’s store are notimmediately transferred does not mean that themoney is lost to the ship. The money is alwaysavailable if it is needed.

As indicated by the examples above, you arenot required to submit the entire amount of yourship’s store profits. In fact, you must makeallowances for all anticipated expenses, such asmarkdowns, surveys, equipment, purchases, andother operating losses, and you must allow forany amounts you report on your NAVSUP 487as Liabilities Assumed.

When any operating losses occur or when youare expecting losses during the accounting period,you will use only the amount you reported on theNAVCOMPT 153 as Funds Brought Forwardfrom the prior accounting period as the starting

point for determining the amount of ship’s storeprofits you will later forward to the RecreationFund.

Interim profits, if deemed necessary by thecommanding officer, may be paid at any time tothe Recreation Fund based on expected profits forthe current period. You can calculate interimprojects by using the following formula:

Number of daysPrevious

expired in current periodTotal number of days period’s

in current period profits

The amount should not exceed two-thirds of yourlast period’s profits. However, if sales for theprevious accounting period were markedly belownormal because of overhaul or some other reason,you can compute the percentage of interim pro-fits on the sales for the nearest normal account-ing period.

CHARGES AGAINST SHIP’SSTORE PROFITS

Ship’s store profits are transferred to theRecreation Fund and the General Fund. They arealso used to repay loans received fromNAVRESSO. Any excess profits, however, mustbe transferred to the General Fund. In addition,ship’s store profits are used to reimburse person-nel who have incurred loss of or damage toapparel as a result of a ship’s service operation.

When a member of the crew suffers a loss of(or damage to) personal apparel as a result of theoperation of your laundry and dry-cleaningfacility or tailor shop, you can submit a claim forreimbursement to the commanding officer via theship’s store officer. The procedures for handlingthe claim and the method for calculating the claimvalue of the personal apparel are detailed in theNAVSUP P-487 and are discussed in Ship’s Ser-viceman 3 & 2, module 2, and in chapter 3 of thisrate training manual.

INVENTORIES

Inventories serve many purposes. Any timethey are taken, inventories serve to reestablish theresponsibility of the ship’s store operator andcustodians. It is only logical for a responsiblesenior Ship’s Serviceman to begin a new ac-counting period with an accurate value of stockson hand. Inventories serve as a basis for the

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transfer of accountability from one ship’s storeofficer to another or the transfer of responsibilityfrom one custodian to another.

DEFINITION AND PURPOSE

Physical inventory includes the processes ofidentifying, counting, and evaluating all stock onhand at a specific time. In a ship’s store,authorized personnel must take a physical in-ventory to reestablish accountability y for the ship’sstore officer, outlet operators, and bulk storeroomcustodians. Physical inventories also function totransfer accountability and responsibility when theship’s store officer is relieved. Inventories are amanagement tool that ship’s store managers canuse to determine the following information:

1. The dollar value of stock on hand so thatthe financial reports can be prepared

2. The accuracy of the stock records so thatany differences that may exist between the stockrecords and the stock on hand can be adjusted

3. The dollar value of any stock shortage thathas resulted from spoilage, damage, waste,pilferage, or other losses that are not reflected onstock records

4. Areas of stock shortage or overage so thatliability can be ascertained

5. Better ways in which proper stock controlcan be maintained

Inventories are a prerequisite to closeout ofthe ship’s store records. When you are closing outthe Ship’s Store Afloat Financial Control Record(NAVSUP 235), you must be able to determinethe value of the items on hand before you candetermine any shortage or overage for retailoperators. You must also know the stock on handto determine the amount of profits from thefountain and vending machine operations. Youcan determine the cost value of all retail sales fromthe Journal of Expenditures (NAVSUP 978) onlyafter you have posted the cost value of all itemsaboard. The quantity of each item sold is com-puted on the Stock Record (NAVSUP 464) cardsonly after the posting of the inventory. Inventoryfigures are the opening entries on the Journal ofReceipts (NAVSUP 977), the Ship’s Store AfloatFinancial Control Record (NAVSUP 235), andthe Stock Record (NAVSUP 464) cards.

Inventories help in stock control. They enableyou to determine whether you are overstocked orunderstocked with individual items or withparticular categories of stock. Thus, inventories

aid you in determining new stock requirementsand serve to notify sales division personnel whenmarkdowns or surveys (to rid the store of old orexcess stock) should be made.

PREPARATION FOR INVENTORY

As a leading Ship’s Serviceman, you canfacilitate the efficiency of an inventory byensuring that certain preparations are taken beforethe actual day of the inventory.

Inventory Teams

In the preparation for an inventory, one ofthe first tasks is the assignment of personnel toinventory teams. It is the ship’s store officer’sresponsibility to acquire and maintain a completeand accurate inventory. To accomplish thisobjective, the ship’s store officer should conducta two-count system. A minimum of two inventoryteams is required for a two-count system.Normally, inventory teams will be composed oftwo persons. If personnel are not available,however, an inventory team can be composed ofonly one person. Remember, the office records-keepers cannot be assigned to inventory teams atany time. The teams should be composed asfollows:

1. First-count team—Either the ship’s storeofficer, the designated officer assistant, or othercommissioned officer, and one enlisted member

2. Second-count team—A senior enlistedperson in the supply rating (E-6 or above) and oneother enlisted person

With a letter of approval from your type com-mander, a qualified senior enlisted member (E-6or above) in a supply rating can be authorized toconduct the monthly inventories. Details for thistype of assignment are outlined in your NAVSUPP-487.

Inventory Sheets

For a ship’s store inventory, you must use theInventory Count Sheet (NAVSUP 238). Thisdocument should be prepared in advance inquadruplicate. Each set of count sheets shouldconsist of four copies that are color-coded in white(original), yellow, pink, and blue, respectively.The ship’s store officer must serialize the countsheets before their distribution to the inventoryteam.

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Next, the ship’s store officer will distribute thecount sheets to the responsible custodians foradvance recording. The ship’s store officer willmaintain a number control, in duplicate, of theinventory count sheets issued with the team andthe spaces assigned to each sheet. When themembers of the inventory team return the countsheets, the ship’s store officer will log each sheetin on the number control. The ship’s store officermust never leave count sheets unattended. If thesheets must be held overnight, the ship’s storeofficer or a designated assistant must lock themup in a secure place.

Advance Recording

Certain information required on the ship’sstore inventory count sheet must be inserted inadvance of the actual count. This informationmust be prelisted by the responsible custodian forthe actual stock in the spaces to be inventoried.The custodian should use a series of inventorycount sheets for each space that will beinventoried. The custodian must record thefollowing information in advance on all fourcopies of the inventory count sheet:

The description of the merchandise byline items (size, color, brand, etc.)

The unit of issue

The fixture number (assigned locally)

The location of the stock being inventoried

Scheduling

The final preliminary step is that of schedul-ing. The time for the inventory should be plannedso the store will be closed for the shortest possibleperiod of time. Under normal conditions, 2 work-ing days should be adequate. The store should notbe closed on payday. The time for the inventoryshould be determined after consultation has takenplace among the leading petty officer of the ship’sstore division, the ship’s store officer, the supplyofficer, and the executive officer. The wordshould also be passed well in advance to crewmembers to enable them to care for their needsbefore the store is closed. Normally, inventoryshould be taken at the end of each regular ac-counting period. This may be any time during thelast week of business. The other circumstances

when inventories are required are detailed in theNAVSUP P-487.

The preparation time before the inventoryshould also allow for a thorough indoctrinationof the personnel assigned to conduct the inven-tory. Besides the required written instructions, theship’s store officer and the leading petty officershould take the designated assistant or inventoryteams into the spaces they will count. Detailedinstructions should be provided for each space.Finally, the inventory should be scheduled at atime when the participants are expected to bementally alert.

SUPERVISION OF PROCEDURES

At the time of the inventory, you may verywell be assigned to an inventory team. Or you maybe the senior Ship’s Serviceman who is respon-sible for conducting a training session on inven-tory procedures before the actual count takesplace. In any case, you should be thoroughlyfamiliar with the procedures that must befollowed.

Actual Count

Under normal conditions, you will probablyuse a two-count system. In this method, oneperson should count and another person shouldrecord the inventoried quantities. Make certainthat inventories are recorded in ink or indeliblepencil on the inventory count sheets. Also, makecertain that all corrections and changes to theoriginal inventory are made in ink or indeliblepencil. Any corrections or changes should beinitialed opposite each change or correction by thepersons who conducted the inventory and by theresponsible custodian. For separate responsibility,bulk storerooms should be inventoried andbalanced with the Stock Record (NAVSUP464) cards before the resale outlets areinventoried.

First Count

The first count must be recorded on the whiteand yellow copies only of the Inventory CountSheets (NAVSUP 238s). Inventory patterns forthe first count should be planned and should stayconsistent. For example, the inventory of a spaceshould start on the left and work to the right ofeach section of the space. When the inventory ofa space has been completed, the inventory sheetsmust be signed by the responsible custodian andby the persons taking the inventory. The sheetsmust then be returned to the ship’s store officer.

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Second Count

The second count must be recorded on thepink and blue copies only of the Inventory CountSheets (NAVSUP 238s). The second count shouldbe made by a team other than the team that madethe first count. However, the second count shouldbe conducted in the same manner and with thesame techniques that were used in the first count.

When the inventory of a space has been com-pleted, the responsible custodian and the membersof the inventory team must sign the inventorysheets. At this point, the sheets should bereturned to the ship’s store officer.

Reconciliation of the Firstand Second Counts

The ship’s store officer (or designatedassistant) must now reconcile the inventory sheetsfor the first and second count. If differencesoccur, the ship’s store officer (or designatedassistant) must make a third count of the items.When the correct amount is determined, the ship’sstore officer should make the necessary changesto all copies of the inventory sheets from the firstand second counts. To make the corrections, theship’s store officer must draw a line through eacherror and write the correct figure. The ship’s storeofficer or assistant—whoever made the thirdcount—and the responsible custodian must bothinitial each correction.

Security

Upon completion of the inventory (or at anyother time when the inventory is not in progress),each space must be secured with a lock and witha numbered lead or car seal. The seal numbermust be recorded in a log and the number mustbe verified by the custodian of the space.

Inventory Affidavit

Upon completion of the inventory and after alldifferences have been reconciled, correspondinginventory count sheets from the first and secondcounts should be matched and stapled together.Remember, a separate affidavit for each space in-ventoried should be prepared and stapled togetherwith the corresponding inventory count sheet forthat space. A copy of the affidavit format and thecorrect distribution of the inventory count sheetscan be found in your current NAVSUP P-487.

Price Line Inventory

Price line inventories are a tool the ship’s storeofficer can use to establish a correct money value

for the balance of ship’s store stock on hand. Tobe effective, however, price line inventories mustbe carefully planned and supervised.

Price line inventories are performed at varioustimes and under varying circumstances. Forexample, the ship’s store officer may conduct aprice line inventory on all ship’s stock, includingstandard Navy clothing items, just to acquire adollar value figure for all stock on hand. In thiscase, the price line inventory serves as a manage-ment tool for proper stock control and as a sourceof information to be used in the required finan-cial reports for the ship’s store.

Whenever a resale outlet operator is relieved,the ship’s store officer will usually insist that aprice line inventory be made of the stock underthe operator’s custody. On ships with separateresponsibility, the price line inventory must betaken upon relief of the ship’s store operator orbulk storeroom custodian. Generally, price lineinventories are taken monthly in self-service storesand in resale outlets that are operated by morethan one person. In cases of break-ins or theft,price line inventories are usually sufficient forthe evaluation of the affected ship’s storespaces. At any other time, as directed by thetype commander (TYCOM), the commandingofficer (CO), the supply officer, or the ship’s storeofficer, an inventory of ship’s store stock may berequired.

Verification of Stock Records

A verification of physical counts with actualbulk storeroom card balances on the NAVSUP464s must be made. Usually, the ship’s storeofficer (or a designated qualified person) and therecordskeeper will perform this verification. Sincethe same item may be located in more than oneship’s store space, individual postings to the NAV-SUP 464 will be required. The responsible custo-dian (whose space is being inventoried) should notbe designated to perform this verification. Whenthe retail store and bulk storeroom are operatedby the same person, only physical counts of thecost of operations items should be verified withbulk storeroom card balances. When there aredifferences, the items should be investigated. Iferrors are found in the inventory, the inventorysheets must be collected and the appropriate cor-rections must be made. All corrections must beinitialed by the persons who took part in theinventory. These same people should return theinventory sheets. The same attention that is givento investigating retail differences should be given

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to investigating differences between the bulkstoreroom count and the actual card balances.

Extending and Summarizingthe Inventories

The office recordskeeper must now extend theinventory at cost and retail (where applicable) onthe working (yellow) copy of the NAVSUP 238.The original (white copy) will be extended byanother qualified person. Neither the responsiblecustodian whose space is being inventoried northe recordskeeper can be designated to extend theoriginal inventory. Using the original inventory,the ship’s store officer (or the designated person)will verify the extensions on the working copy foraccuracy. Using the same reconciliation pro-cedures mentioned earlier in this chapter, theship’s store officer will reconcile any differencesand will make all the necessary changes.

MID-ACCOUNTING PERIODINVENTORY

Most type commanders require taking surprisemid-accounting period inventories. This pro-cedure is highly recommended for all ship’s storedivisions regardless of requirements. The mid-accounting period inventory allows an interimcheek to be performed on the store operation. Thestock position of the store can then be reviewed.More importantly, however, the financial condi-tion of the store can be determined. Is the storeoperator accurately caring for stocks entrusted tohim or her by producing money or material forthe full value? The element of surprise is the mostimportant aspect of this type of inventory.Precautions should be taken so the store operatoris completely unaware of any preparations for amid-accounting period inventory.

AUDITING TECHNIQUES

Auditing is one the most important and fre-quently neglected functions of ship’s store supervi-sion. Proper records are absolutely essential to aneffective ship’s store operation. As a leadingShip’s Serviceman, you will very likely have someresponsibility for auditing ship’s store records andreturns.

Auditing is the regular systematic checking ofthe stock and financial records in a ship’s store.The main purpose of an audit is to discover errorsand irregularities. Discovery of these errors shouldlead to correction of all the affected records.Ultimately, discovery of errors should lead to theprevention of their reoccurrence.

As mentioned frequently in this trainingmanual, it is wise for you to perform the auditsteps periodically rather than to wait until the endof the accounting period. In this way, errors aregenerally restricted to shorter periods. Also, moretime for auditing is available if auditing is donethroughout the accounting period. Errors can bedetected earlier and stopped promptly. Also, bydetecting these errors early, you can make cor-rections and adjustments to personnel and to pro-cedures at the time. Consequently, you can avoidthe detailed investigations that become necessarywhen errors are discovered at the end of the ac-counting period. Finally, you can complete thecloseout of the records and the preparation of thereturns in less time.

In each of the chapters on procurement,receipts, and expenditures, a section has beenincluded on auditing procedures. Now, suggestedprocedures will be described for the auditing ofcloseout and the preparation of returns.

AUDITING CLOSEOUT

The ship’s store records are not difficult toclose out. No magic is required for you to com-plete this job. However, closing out the ship’sstore records is a necessary task you must performto obtain the information you need to prepare thereturns required by your appropriate fleet ac-counting and disbursing center (FAADC).

Closeout should follow this sequence of events:

1. Stock Record2. Ship’s Store Afloat Financial Control

Record3. Journal of Receipts4. Journal of Expenditures

Why is this order important? As mentionedearlier, by closing out the Stock Record first, youcan compare the quantities inventoried with thecard balances, and you can correct any errors.Second, the Ship’s Store Afloat Financial ControlRecord should be closed out, as the store can bereopened once a satisfactory balance is obtained.Third, the Journal of Receipts must be closed out.Last, you must close out the Journal of Expendi-tures. You will need information from the Ship’sStore Afloat Financial Control Record and theJournal of Receipts before you can close out theJournal of Expenditures. The audit proceduresfor each of these areas will now be discussed.

Stock Record Cards

First, you must check over the information onthe stock record cards. See figure 7-1. Throughout

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the accounting period, the ship’s store records-keeper should have posted the following data tothe stock record cards:

Receipts

Expenditures

Quantity of each item as shown on theinventory sheets

Quantity of sales of each item

If you have a separate operation, then you shouldcheck to see that both the Bulk and Total Balanceinventory totals have been recorded on the stockrecord cards, It is the Bulk inventory figure thatshould agree with the Balance in Bulkroom quan-tity on the NAVSUP 464 for all retail and costitems. In a combined operation, only the TotalBalance figure should be recorded and verifica-tion can be done only for the cost of operationitems.

Second, you should spot check several of thequantity of sales figures to make certain that therecordskeeper is calculating this total correctly.To arrive at the Total Sales figure, the records-keeper should be using this formula:

Beginning Inventory + Receipts – Expendi-tures – Closing Inventory = Total Sales.

For a cost item, of course, there will be noquantity of sales figure. Finally, you should checkthe stock record cards for general closeout for-mat. See figure 7-1.

Ship’s Store Afloat FinancialControl Record

The first step in the closeout of the Ship’sStore Afloat Financial Control Record (NAVSUP235) was the posting of the final expenditure—Sales—to the various applicable columns, such asStore No. 1, Vending Machine, Fountain, andClothing. See figure 7-2. You should check to seethat this total agrees with the total of the fourMemorandum Cash Sales Invoices (DD 1149s) forthe months of the accounting period.

Second, the closing inventory figure shouldhave been entered on the Expenditures side ofeach column. You should make sure the records-keeper has used the correct inventory total—thetotal of the retail value of items in the ship’sstore; the total retail value of vending machine

stock, such as canned sodas, candy, cigarettes,and other vending machine products; and the costvalue of cup-type soda machines and suppliesactually in the vending machines; plus any itemspreviously charged off.

Third, the subtotals and totals should havebeen calculated and recorded correctly. It is at thispoint that any differences between the Receiptsand Expenditures sides will appear. For the retailstore, if the subtotal for the Expenditures side isless than the subtotal of the Receipts side, ashortage exists. If the value of Expendituresexceeds the value of Receipts, then an overageexists. Theoretically, the two sides should balanceexactly. However, occasional errors in any retailoperation, such as incorrect change or wrong pric-ing, will usually result in a small difference. Onthe other hand, a large difference is either theresult of a bookkeeping error or the product ofnegligence, theft, or misappropriation of moneyor material. As an auditor, you should first checkto see if a large difference is the result of abookkeeping error. Take the following steps inyour examination:

1. Check the extensions and totals on the in-ventory sheets,

2. Recheck the extensions, the totals, and thepostings of receipt and expenditure documents.(This should have been done during the account-ing period, as discussed in the previous chapters.)

3. Examine the preparation of the cash salesinvoices.

4. Conduct another inventory. (You mightsave time by checking the high-priced items first.An error with a few high-priced items could bethe cause of the significant difference in the NAV-SUP 235.) Also, consult your NAVSUP P-487 fora list of the most common causes of discrepancies.

If, after investigation, a difference (shortageor overage) in excess of 1 percent of sales stillexists, you must consider such a difference to beexcessive. Submit a letter report using theguidelines in your NAVSUP P-487. You mustsubmit the report under the followingcircumstances:

Any gain or loss of a suspicious orreoccurring nature regardless of the money value

In self-service resale outlets (walk-in stores)with sales of $20,000 or less per accounting period,a gain or loss in excess of 1 percent of sales

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A large difference always exists in the cup-type soda Vending Machines and the Fountaincolumns; however, this is because all entries havebeen posted at cost price except for the entries forSales that are posted at a marked-up price (thecash that was actually received). The value ofSales, then, is the sum of the cost value of theitems sold plus the profit that has been received.The large difference, therefore, is actually grossprofit. Since it is a forced figure, overages andshortages cannot be strictly accounted for.However, gross profit should be about 60 percentof the sales figure for Vending Machines.Generally, the gross profit for the fountain shouldbe about 30 to 40 percent, depending on the sizeof the individual servings. Large deviations fromthese percentages should be investigated.

If clothing items are sold in a separate retailoutlet, a separate column on the Financial Con-trol Record should show no difference in theReceipt and Expenditures subtotals since there isa standard price and no markup is involved.However, small differences may appear forvarious common reasons.

The Other Cost Material column, which isused only in a combined operation, should alsohave no difference in its subtotals since no salesare involved. Material is received, expended, andinventoried at cost price. A difference of a fewcents might be the result of rounding off costprices of material upon receipt or receipt of stockat a new price that was used for expenditures ofold and new stock alike. Any large financialdifference should be substantiated by a differenceyou find when you are closing out the stockrecords for cost of operation items. For example,if the stock record for laundry soap was short 50pounds and the cost price is 20¢ per pound, thereshould be a $10 shortage in the Other CostMaterial column. Likely sources of error in thiscolumn are the improper pricing of breakouts anderrors in posting.

The total of the Cost of Operation column isthe value of all material broken out as a cost ofoperation and used in the laundry or barbershop.This value also includes vending machine repairparts.

Once you have examined the subtotals andtotals, you should check the recordskeeper’srecaps of each column. You will need this infor-mation for closing out the remaining records. Youwill also need this information to evaluate the suc-cess of the store operation and the accuracy ofthe store operator in accounting for the stocks inthat person’s custody.

The first recap is for the retail store. Thedifference should have been entered and identifiedas an overage or shortage, as shown in figure 7-2.The difference as a percentage of sales shouldhave been entered in parentheses. All differences,regardless of size, should be reported on thereverse side of the NAVCOMPT 153.

The second recap provides information aboutthe vending machine operation. The Cost of Salesfigure is the difference between the gross profit(subtotal difference) and the vending machine(VM) sales. The gross profit figure is also enteredin the recap along with the percentage of grossprofit to sales. Finally, the Cost of Operationfigure, which was obtained by adding all the VMentries in the Cost of Operation column of theNAVSUP 235, should have been entered.

In a combined operation, the Other CostMaterial (OCM) column is recapped. All that isrequired is the value of the Cost of Operationcolumn less the VM entries and any differenceexisting in the OCM column.

In a separate operation, there is no Other CostMaterial recap that lists the value Cost ofOperation—Material from the Cost of Operationcolumn. Recaps should also be included forclothing items and the fountain operation,whenever applicable. An example of a separateoperation closeout of a Ship’s Store Afloat Finan-cial Control Record is shown in figure 7-2.

Journal of Receipts

Closing out the NAVSUP 977 involvesnothing more than totaling the record. All sixcolumns of the record should be totaled and tworecaps of receipts should be prepared. See figure7-3. For the first recap, the totals of the threeship’s store columns should be added as well asthe totals for the three clothing columns. You willuse the first recap in closing out the Journal ofExpenditures. For the second recap, the totals ofeach of the three types of receipts for both ship’sstore and clothing should be added. You will usethe second recap in preparing the financialstatements. See figure 7-3.

Journal of Expenditures

Many expenditures have been posted to theJournal of Expenditures (NAVSUP 978)throughout the accounting period. Remember, allentries are made at cost price. These includetransfers, surveys, markdowns (below cost), andsome issues. Other expenditures, however, have

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not been posted either because it was more con-venient to wait until the end of the period orbecause their value was not known. In auditingthe Journal of Expenditures, you must makecertain that all these expenditures have been cor-rectly calculated and posted before the record canbe closed out. See figure 7-4 for an example ofa closed-out Journal of Expenditures.

The Cost of Operation—Material and Cost ofOperation—Vending Machine values are examplesof postings that have been deferred for con-venience. These values should have been simplyextracted from the Ship’s Shore Afloat FinancialControl Record recaps. Money Value Invoices(DD 1149s) should have been prepared by therecordskeeper for these two types of costs ofoperations. The Cost of Operation—Materialinvoice should have been broken down intomoney value by the service activity (barbershopor laundry). You can check the format of theinvoices by referring to the NAVSUP P-487.

The last type of expenditure that should havebeen recorded is the cost value of the differenttypes of sales. The first entry, Cost of Sales—Vending Machines, is obtained from the vendingmachine recap on your Ship’s Store Afloat Finan-cial Control Record for cup-type sodas and fromline R of your NAVSUP 236 for canned sodas.The next entry, Cost of Sales—Retail, isforced after all other entries have been added. Thevalue of the next entry, Bulk Sales—Cost Price,is simply the total of all Bulk Sales invoices con-tained in the Cash Sales file. In a separate opera-tion, the value of the next entry, ClothingSales—Standard Price, is known and obtainedfrom the Cash Register Record (NAVSUP 469)covering the clothing sales outlet. In a separateoperation, another entry, Loss by Inventory—Clothing, is required if a shortage has occurredin the Clothing Outlet column of the Ship’s StoreAfloat Financial Control Record. If there was anoverage, the entry Gain by Inventory—Clothingshould have been added to the Journal of Receiptsbefore closeout rather than to the Journal of Ex-penditures. The value of this difference is theamount necessary to make the Clothing columnon the NAVSUP 977 agree with the Clothingcolumn of the NAVSUP 978. The gain or lossshould also be documented on a DD 1149.

The next step in closing out the Journal of Ex-penditures should have been the posting of theclosing inventory from the inventory document.You should check to see that the Total Inventoryat Cost column on the Inventory Document(NAVSUP 238) has been broken down into two

different categories, clothing and ship’s storestock (everything except clothing), and has beenposted to the Journal of Expenditures as these twoamounts.

Then, the totals from each column on theJournal of Expenditures should be posted. Thevalues are known even without the Cost ofSales—Retail figure since the grand totals mustagree with those on the Journal of Receipts.

When posting the totals of the four columnson the NAVSUP 978, you should post the totalof the To Other Supply Officers (O.S.O.) columnsfirst. The total of the Other Expenditures columnis then the grand total to be accounted for in thatarea less the total of the To O.S.O. columns.

Finally, the value of Cost of Sales—Retail canbe determined and posted. You should check therecordskeeper’s calculation of this value carefullysince the procedure can be confusing. The Costof Sales—Retail figure is forced and is obtainablein all cases since you know the value of all otherentries, including the totals. The value of all otherexpenditures is now known. By now, all expendi-tures of material throughout the accountingperiod will have been posted to the NAVSUP 978except for the cost value of items sold in the retailoutlet. The closing inventory is also known andhas been posted. The total expenditures that mustbe accounted for are known and have beenposted. The amount to be entered as Cost ofSales—Retail is now the amount that will benecessary to balance the total expenditures withthe total receipts of ship’s store items from theJournal of Receipts. The recordskeeper should beaware that there is no other simple method bywhich this value can be obtained. The forcedfigure will absorb all errors made on the two costrecords and will directly influence ship’s storeprofits. Thus, it is important this figure becalculated correctly.

In a combined operation (when clothing andretail outlets are the same), the value of ClothingSales—Standard Price is not known and must beforced as well. The value will be the amountnecessary to balance the total expenditures withthe total receipts of clothing items on theJournal of Receipts (NAVSUP 977). Further-more, in a combined operation, a loss or gain byclothing inventory does not have to be recordedsince any loss or gain will be absorbed in theforced figure.

Finally, you should make certain that theJournal of Expenditures has been recapped twicein the same manner as the Journal of Receipts.The first recap on the NAVSUP 978 should be

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identical to that on the NAVSUP 977. The firstrecap also provides a good check on the records-keeper’s mathematical computations. The secondrecap on the Journal of Expenditures is notidentical to the second recap on the Journal ofReceipts. The Journal of Expenditures is a recordof to whom your material was expended. Also,this record is necessary for the preparation of thefinancial statements.

In conclusion, the importance of a thoroughaudit in all these areas cannot be overemphasized.Accountability is being summarized when therecords are closed out. An accurate set of returnsis dependent on an accurate closeout. Remember,you, as the auditor, will be held responsiblefor verifying the accuracy of these importantrecords.

AUDITING RETURNS

Once the ship’s store records have beenproperly closed out, the recordskeeper is ready toprepare the returns for submission to theappropriate fleet accounting and disbursing center(FAADC). The returns must be submitted within15 days following the end of the applicableaccounting period. The accounting periods are the4-month periods ending 31 January, 31 May, and30 September. The accounting period may be lessthan 4 months if the ship’s store officer is beingrelieved. The accounting period may be more than4 months if the commanding officer authorizesin writing that merged returns will be submitted.

MERGED RETURNS

As long as the total of the merged period doesnot exceed 5 consecutive months, the returns fora fractional period can be merged with the returnsfor the previous or later period. Of course,approval for any merged returns must beauthorized in writing by the commanding officer.The only period that cannot be merged is theaccounting period ending 30 September. Inunusual or emergency circumstances when returnsmust be merged for the period from 1 Septemberthrough 31 October, a request for exception canbe forwarded to NAVRESSO with a copy to theappropriate FAADC and to the Navy RegionalFinance Center, Washington, D.C. Once anyret urns have been merged, copies of the writtenauthorizations must be forwarded immediately toNAVRESSO, the appropriate FAADC, and theNavy Regional Finance Center, Washington, D.C.The original of the letter that authorized the

merged returns for any period must be includedwith the returns when the returns are submittedto the appropriate FAADC.

DELAY AND DELINQUENCY

When returns cannot be submitted on orbefore the date they are required to be submitted,a letter from the commanding officer explainingthe reason for the delay and the anticipated mail-ing date should be forwarded to the appropriatetype commander. A copy of the letter should beforwarded to the Naval Supply Systems Com-mand (Deputy Commander, Programming andFinancial Management, Comptroller), to theappropriate FAADC, and to NAVRESSO.

SHIP’S STORE BALANCE SHEETAND PROFIT AND LOSSSTATEMENT

You should prepare the Ship’s Store BalanceSheet and Profit and Loss Statement (NAV-COMPT 153) in the number of copies required.See figures 7-5 and 7-6. You must use theJournal of Receipts (NAVSUP 977) and theJournal of Expenditures (NAVSUP 978) for thepreparation of the balance sheet section of theNAVCOMPT 153. You must also substantiate theNAVCOMPT 153 with vouchers covering allreceipts and expenditures during the accountingperiod. If an adding machine tape is required, thetape should show the unit identification code ofthe ship, the period covered by the returns, andthe caption substantiated.

Receipts Caption

The Receipts side of the NAVCOMPT 153 ex-tends from lines B01 through B09. Refer to figure7-5. To enter the correct amounts for these lines,use the information you have accumulated onthe Journal of Receipts (NAVSUP 977). Thesupporting documents for your entries on theNAVCOMPT 153 should be in their appropriatefiles for ship’s store accounts. To obtain thecorrect file names for the corresponding B lineson the NAVCOMPT 153, consult the currentNAVSUP P-487.

Expenditures Caption

You must complete the Expenditures side ofthe NAVCOMPT 153, from lines B10 throughB30, with information contained in the Journalof Expenditures (NAVSUP 978). Just as for the

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Figure 7-5.—Preparation of the Ship's Store Balance Sheet and Profit and Loss Statement—separate and combinedresponsibility (front).

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Figure 7-6.—Preparation of the Ship’s Store Balance Sheet and Profit and Loss Statement—separate and combinedresponsibility (back).

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preparation of the Receipts side, the supportingdocuments for the Expenditures side should bein your ship’s store accounts files. More detailedcoverage of these procedures is contained in yourNAVSUP P-487.

Profit and Loss Statement(Receipts Section)

In preparation of the Profit and Loss State-ment captions, lines C01 through C09 (Receipts),you must return to your previous NACOMPT153 to report line C01. Refer to figure 7-5. LineC02 must be taken from the cashbook of yourship’s store. Information for line C03 can onlybe taken from your soft drink vending machines(cup type and can type). Indicate the type of softdrink machine by checking the appropriate boxin section C03 of your NAVCOMPT 153. LineC04 is cash collected from amusement machines.The total amount of rebate checks received fromthe Navy Resale and Services Support Office forcatalog sales should be entered on line C04A.Contributions, regardless of the source, shouldbe entered on line C04B. This figure should in-clude the amounts collected as service charges andthe profits from the sales of traveler’s checks.

Line C05 covers loans that have beenauthorized by NAVRESSO to cover the cost ofequipment, such as vending machines, popcornmachines, and soft ice cream purchases. Line C05should also include loans that have covered anyimprovements to the ship’s store, the cost ofsurveys, and operating losses. An official letterrequest stating the purpose of the loan must besubmitted to the Navy Resale and Services Sup-port Office. After approval, NAVRESSO willcharge the amount of the loan to the appropria-tion Ship’s Store Profits, Navy (General Fund).To reimburse the General Fund, the individualship’s store must make payments from localprofits. (Repayment instructions are provided byNAVRESSO.) Normally, a ship is required torepay a loan in three accounting periods. Shipshaving a complement of less than 350 can requestauthority to repay a loan in five installments.Loans to cover the cost of modernizations can berequested for a period of up to a maximum of3 years. When approved, the loan amount shouldbe entered as a one-time entry on line C05 for theaccounting period in which the loan is received,Loan repayment should be reported on line C20of the NAVCOMPT 153. More detailed informa-tion is contained in your NAVSUP P-487.

Line C06 covers any NAVRESSO nonreim-bursable grants that are authorized by NAV-RESSO to cover the cost of equipment, such asvending machines and soft ice cream machines, oroperating losses. You should report all NAV-RESSO nonreimbursable grants on line C06,NAVRESSO Grants, at the end of the accountingperiod in which you received authority for thegrant. Just as you did for loans, reference theNAVRESSO letter containing the authority forthe grant. The letter from NAVRESSO authoriz-ing the grant should be referenced in theauthorization block of the NAVCOMPT 153.

Line C07 covers any surveys to the GeneralFund. Report only the amounts that were ap-proved by NAVRESSO as a charge to Ship’s StoreProfits, Navy (General Fund). Use the amountsyou entered in lines B23 and B27 as your entryfor line C07.

Line C08 should be reserved for the ap-propriate FAADC. The FAADC will use line C08to report any adjustments.

Use line C09 to report your total receipts. Thevalue on line C09 should represent the sum of linesC01 through C07.

Profit and Loss Statement(Expenditures Section)

Line C10 is reserved for the Cost of Sales—Retail figure you have already entered on line B21.On line C11, enter the total amount of any un-collectible checks. For line C12, OperatingExpenses, report the total of lines B22, B23, andB24.

On line C13, report the amount that representsthe total of Laundry Claims and Other ServiceCharges paid on Reimbursement Vouchers(Standard Form 1129) in settling claims for lossof or damage to personal apparel in the ship’sstore service activities. This figure should alsoinclude the total value of your payment notifica-tion reports (PNRs) covering laundry and dry-cleaning service charges and the total value of yourpayment notification reports (PNRs) coveringrepairs to vending machines, soft ice creammachines, popcorn machines, and ship’s storestock .

Use line C14 for reporting the rate of assess-ment of sales that will accrue to the General Fund.On line C15, enter the Cost of Sales—Vendingthat you reported on line B25. Use line C16 forthe Cost of Operation—Vending figure. Thisamount should be the sum of lines B26 and B27,and if applicable, the added entry on B27A.

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Use line C17 to report Excess Profits. Thisamount will be the amount on line C25 minus 15percent of the amount on line C10. The figure youshould enter on line C18, Equipment Purchases,will represent the total value of payment notifica-tion reports (PNRs) for equipment such asmodernization materials, vending machines, softice cream machines, and remittances to con-tractors for amusement machine sales and otherservices and materials that you have procured asa direct charge to ship’s store profits.

Line C19 should contain the total amount ofremittances paid to contractors for leased amuse-ment machines. The figure represents the amountthat must be forwarded to contractors by meansof checks issued from your disbursing officer. Thetotal amount of these checks should be chargedto Ship’s Store Profits, Navy, at the end of eachmonth.

The figures on lines C20 and C21 representthe amounts prescribed by NAVRESSO that mustbe repaid toward the loans that were authorizedfor your ship’s store. The balance at thebeginning and ending of the accounting periodshould be entered in the spaces provided. Thefigure in the space for the Ending Period willusually represent the total amount of the loan atthe Beginning Period minus the amount enteredon line C20 (the monthly repayment amountremitted to NAVRESSO).

Use line C22 to report the total value of theamount entered on the NAVCOMPT 2277s cover-ing the funds that will be transferred to theRecreation Fund. The figure for line C23 shouldrepresent the sum of lines C10 through C20, andline C22. In other words, line C23 represents TotalExpenditures.

On line C24, enter the amount of fundsavailable for transfer to the Recreation Fund. Toreach this figure, you must first subtract line C23(Total Expenditures) from line C09 (TotalReceipts). Next, subtract the figure on line C24A(the total amount of Liability Assumed/An-ticipated Operating Expenses) from the amounton line C24. You should end up with the amounton line C24B. Line C24B represents the netamount of funds available for transfer to theRecreation Fund. Remember, only the differencebetween the amount from receipts you havereported on line C24 (Funds Available forTransfer to the Recreation Fund) and the amountyou have entered on line C24A (LiabilityAssumed/Anticipated Operating Expenses) willrepresent the actual amount that can be trans-ferred to the Recreation Fund (line C24B).

Profit Computations

For profit computations, the amount on lineC25, Operating Profit, should represent theamount on line C02 minus the total of lines C10through C14. Line C26, Cup-Type Drink VendingMachine Profit, will be the amount on line C03minus the amount for lines C15 and C16. LineC27 is the amount reported on line C04 minus theamount on line C19. This is the actual amusementmachine profit.

Certification Statement

The ship’s store officer must sign and date thebottom of the front side of the NAVCOMPT 153directly under the certification, “I certify that thisstatement is correct to the best of my knowledgeand belief.”

Additional Requirements

Whenever applicable to your ship’s store, youmust report the following information on thereverse side of the NAVCOMPT 153. See figure7-6.

1. Net gains and losses (as outlined in yourNAVSUP P-487).

2. The amount from sales of traveler’s checks.Use the following format to derive this figure:

Cash Collected from Sales of Traveler’sChecks:

Face value of checks andsurcharges

Ship’s profit

Transmittal to vendor

Balance of checks on hand

3. The numbers of days the ship was in portand the number of days the ship was at seaduring the accounting period.

Distribution of the NAVCOMPT 153

After you are certain that your NAVCOMPT153 is correct, you must distribute this documentas follows:

1. Original and one copy to the appropriateFAADC, substantiated as indicated later in this

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chapter and in your NAVSUP P-487. (TheFAADC will forward one copy of the NAV-COMPT 153 to NAVRESSO.)

2. One copy to the commanding officer.3. Two copies to the special services officer

within 15 days following submission of the returnswhether or not profits are available for transfer.(These copies will be filed with the special servicesof officer’s records for recreational fund audits.)

4. One copy filed with the retained returns.

ASSEMBLING ANDSUBSTANTIATING THE RETURNS

Now that you have entered all the required in-formation on the NAVCOMPT 153, you mustsubstantiate and assemble your ship’s store returns.You can perform both the assembling and sub-stantiating of ship’s store returns at the same time.Table 7-1 lists the documents that you are requiredto use to substantiate your ship’s store returns.

Table 7-1.—Procedures for Ship’s Store Returns

BALANCE SHEET

NAVCOMPT Form 153

LINE AND CAPTION RETURNS TO FAADC

RECEIPTS SECTION

RECEIPTS WITH CHARGE

Purchase(Line B01)

Receipt documents are not requiredto be submitted with returns. (Receiptdocuments are forwarded toF A A D C P A C o r F A A D C L A N Tmonthly.)

INVENTORY ADJUSTMENTS

Gain by Inventory (Stand- DD Form 1149—signed original.ard Navy Clothing)

(Line B02)

FINANCIAL ADJUSTMENTS

Gain by Purchase Vari- NAVSUP Form 983—signed original.ance

(Line B03)

Gain by Standard Price NAVSUP Form 983—signed original.Adjustment

(Line B04)

RECEIPTS FROM

Ship’s Store(Line B05)

OTHER SUPPLY OFFICERS

Receipt documents are not requiredto be submitted with returns. (Receiptdocuments are forwarded toFAADCPAC or FAADDCLANTmonthly.)

Standard Navy Clothing Same as line B05.(Line B05A)

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RETAINED RETURNS

Copy of all receipt documentssigned by the responsiblecustodian.

DD Form 1149—copy.

NAVSUP Form 983—copy.

NAVSUP Form 983—copy.

Copy of all receipt documentssigned by the responsiblecustodian.

Same as line B05.

Table 7-1.—Procedures for Ship’s Store Returns—Continued

BALANCE SHEET—CONTINUED

NAVCOMPT Form 153

LINE AND CAPTION RETURNS TO FAADC

EXPENDITURES SECTION

ISSUES WITH REIMBURSEMENT

Issues to Use(Line B10)

Issues in Kind(Line B11)

Bulk Sales(Line B12)

Standard Navy ClothingSales

(Line B13)

DD Form 1149—signed original andone copy

NAVSUP Form 28/28A and/orDD Form 504—two copies.

DD Form 1149—signed orginal.

DD Forms 1842 and 1845 and NAV-SUP Form 28/28A—two copies.

DD Form 1149—copy(priced and extended).

DD Form 1149—two copies of eachmonthly Memorandum Cash SaleInvoice Deposit of Cash with theDisbursing Officer. (See line C02.)

INVENTORY ADJUSTMENTS

Loss by Inventory (Stand- DD Form 1149—signed original.ard Navy Clothing)

(Line B14)

Surveys to NSF (Ship’s DD Form 200—signed original.Store)

(Line B15)

Surveys to NSF (Stand- DD Form 200—signed original.ard Navy Clothing)

(Line B16)

FINANCIAL ADJUSTMENTS

Loss by Purchase Variance NAVSUP Form 983—signed original.(Line B17)

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RETAINED RETURNS

DD Form 1149—copy.

N A V S U P F o r m 2 8 / 2 8 Aand/or DD Form 504—onecopy.

DD Form 1149—copy.

DD Forms 1842 and 1845 andNAVSUP Form 28/28A

partial issues—one copy;

final issues—original.

DD Form 1149—copy.

DD Form 1149—original ofeach monthly MemorandumCash Sale Invoice Deposit ofCash with the Disbursing Of-ficer. (See line C02.)

DD Form 1149—copy.

DD Form 200-copy.

DD Form 200-copy.

NAVSUP Form 983—copy.

Table 7-1.—Procedures for Ship’s Store Returns—Continued

BALANCE SHEET—CONTINUED

NAVCOMPT Form 153

LINE AND CAPTION RETURNS TO FAADC

EXPENDITURES SECTION–CONTINUED

FINANCIAL ADJUSTMENTS—CONTINUED

Loss by Standard Price NAVSUP Form 983—signed original.Adjustment

(Line B18)

TRANSFERS TO OTHER SUPPLY OFFICERS

Ship’s Store(Line B19)

Standard Navy Clothing(Line B19A)

RETAIL OPERATION

Cost of Sales(Line B21)

Cost of Operations(Line B22)

Survey to Profits(Line B23)

Markdowns Below Cost(Line B24)

NAVCOMPT Form 176—originalwith two copies of the transfer in-voices attached. Adding machinetapes must be attached to invoices.

Same as line B19.

No document is required.

No document is required. Substantia-tion is on the NAVSUP Form 978.

DD Form 200-signed original.

N A V S U P F o r m 9 8 3 — s i g n e doriginal. (Including markdowns tozero.)

DRINK VENDING MACHINE OPERATION

Cost of Sales(Line B25)

Cost of Operations(Line B26)

Surveys to Profits(Line B27)

Markdowns Below Cost(Line B27A)

No document is required.

No document is required.

DD Form 200–signed original.

N A V S U P F o r m 9 8 3 — s i g n e doriginal. (Including markdowns tozero.

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RETAINED RETURNS

NAVSUP Form 983—copy.

NAVSUP Form 176—copywith one copy of the transferinvoice attached.

Same as line B19.

No document is required.Substantiation is on the NAV-SUP Form 978.

DD Form 1149—original

DD Form 200–copy.

NAVSUP Form 983—copy.(Including markdowns tozero.)

No document is required.Substantiation is on the NAV-SUP Form 236.

DD Form 1149—signedoriginal.

DD Form 200–copy.

NAVSUP Form 983—copy.(Including markdowns tozero.)

Table 7-1.—Procedures for Ship’s Store Returns—Continued

NAVCOMPT Form 153

LINE AND CAPTION

RECEIPTS SECTION

SALES PER CASHBOOK

Retail (Ship’s Store Only)(Line C02)

Drink Vending Machine(Line C03)

Cash from AmusementMachine Sales

(Line C04)

Rebate Checks f romExchange Catalog Sales

(Line C04A)

Contributions and ServiceCharges

(Line C04B)

NAVRESSO LOANS(Line C05)

NAVRESSO GRANTS(Line C06)

EXPENDITURES SECTION

SURVEYS TO GENERALFUND

(Line C07)

DISHONORED CHECKS(Line C11)

LAUNDRY CLAIMSOTHER SERVICECHARGES

(Line C13)

AND

PROFIT AND LOSS STATEMENT

RETURNS TO FAADC

DD Form 1149—two copies of eachmonthly Memorandum Cash SaleInvoice Deposit of Cash with theDisbursing Officer.

See line C02.

See line C02.

See line C02.

See line C02.

No document is required.

No document is required.

DD Form 200—signed original.

DD Form 1149—signed originalwith original uncollectible checksattached.

RETAINED RETURNS

DD Form 1149—original ofeach monthly MemorandumCash Sale Invoice Deposit ofCash with the DisbursingOfficer.

See line C02.

See line C02.

See line C02.

See line C02.

NAVRESSO letter authoriz-ing the loan.

NAVRESSO letter authoriz-ing the grant.

DD Form 200—copy.

DD Form 1149—copy withcopy of uncollectible checksattached.

For Laundry Claims

Standard Form 1129—copy. Standard Form 1129—copy

Payment notificationcopy.

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with copy of the claim.

Other Service Charges

report (PNR)— Payment notification report(PNR)—copy.

Table 7-1.—Procedures for Ship’s Store Returns—Continued

PROFIT AND LOSS STATEMENT—CONTINUED

NAVCOMPT Form 153

LINE AND CAPTION RETURNS TO FAADC

EXPENDITURES SECTION—CONTINUED

EQUIPMENT PURCHASES(Line C18)

D I S B U R S E M E N T S T OAMUSEMENT MACHINECONTRACTORS

(Line C19)

LOAN REPAYMENTS(Line C20)

FUNDS TRANSFERREDTO RECREATION FUND

(Line C22)

Payment notification report (PNR)—copy.

NAVCOMPT Form 2277—copy.

No document required.

NAVCOMPT Form 2277—copy.

RETAINED RETURNS

Payment notification report(PNR)–copy.

NAVCOMPT Formcopy.

Same as line C05.

NAVCOMPT Formcopy.

2277—

2277—

OTHER DOCUMENTS REQUIRED FOR RETAINED RETURNS

RECEIPTS NAVSUP Form 977—original.

EXPENDITURES NAVSUP Form 978—original.

FINANCIAL CONTROL RECORDS NAVSUP Form 235—original.

INVENTORIES

MANAGEMENT REPORTS

inventory Discrepancy List—original. (Attached to NAV-SUP Form 235.)

NAVSUP Form 236—signed original.

NAVSUP Form 238—yellow working copy. Price LineInventory Count Sheet—signed original.

NAVSUP Form 1234—signed original.

BREAKOUTS NAVSUP Form 973—signed original.

NAVSUP Form 980—original.

PRICE ADJUSTMENTS NAVSUP Form 983—signed original. (For markons,markdowns, and markdowns to cost.)

CASH COLLECTION RECORDS NAVSUP Form 469—signed original.

NAVSUP Form 470—signed original.

Ship’s Store Management Report—original (signed by supplyofficer and commanding officer).

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Make certain that all your reporting documentsare legible. Remember, you must send the signedoriginal and one copy of the Ship’s Store BalanceSheet and Profit and Loss Statement (NAV-COMPT 153) with the required substantiatingdocuments to the appropriate FAADC.

Make Up of Original (Forwarding)and Retained Returns

When assembling and substantiating yourreturns, you should make up both your retainedand forwarding returns together. This strategy willallow you to double-check all figures on thesubstantiating documents and to make certain youhave copies for both sets. When assembling yourreturns, make two stacks and compile both as yougo along, making sure that both stacks containexactly what your NAVSUP P-487 requires.

Table 7-1 was presented for your convenience.Carefully read through the information in thetable. Follow the sequence given when you aresubstantiating and assembling your ship’s storereturns.

As indicated in the table, all documents thatyou include in the original (forwarding) returnsyou will also include in the retained returns.

information in your retained returns. Forexample, all documents in the accountability fileof the current accounting period that you didnot include in the original returns must beincluded in the retained returns. Any list ofdiscrepancies, as required in NAVSUP P-487,must also be placed in the retained returns.However, do not file the ending inventories in thecurrent retained returns. Carry the ending inven-tories forward into the accountability file of thenext accounting period.

Arrangement of Original andRetained Returns

As indicated earlier, the original andretained returns should be arranged in the sameorder. Whether the returns are prepared for sub-mission or for filing, the arrangement is alwaysthe same.

The required documents that must be includedwith the retained returns, but not submittedwith the original returns, should be filed at thebottom of the retained returns. In the case oflarge ships, these additional documents can bemaintained in a separate folder or box.

The arrangement you should use for all returnsHowever, you will need to include some additional is shown below.

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Forwarding of Original Returns

For forwarding the required originals andcopies of your ship’s store returns to theappropriate FAADC, pack the returns unfoldedand flat. Keep in stock the heavy corrugated fiberboxes that are designed for packaging of returns.If a box of this type is not available, use a lightcanvas container with sewn or waxed edges. Usewooden boxes only when your returns are tooheavy or bulky for the fiber boxes. On the otherhand, you can use a heavy envelope if your returnsare no larger than an ordinary letter.

In addressing the packages, place the name ofyour activity in the upper left corner of eachpackage. Next, the name of the ship’s storeofficer and the name and unit identificationcode of the ship should be shown. Under thisinformation, the following statement shouldappear: “Ship’s store returns for period ending

19 .” If two or morepackages are used, the number of the package anda brief description of the contents should beshown on the last line.

Now you must forward the returns to theappropriate FAADC. For returns weighing 13ounces or less, use First-Class Mail. Use MilitaryOfficial Mail (MOM) for returns weighing over13 ounces. For service designator R, forward thereturns to

Fleet Accounting and Disbursing CenterU.S. Pacific Fleet (Code AF3-2)937 North Harbor DriveSan Diego, CA 92132

For service designator V, forward the returns to

Fleet Accounting and Disbursing CenterU.S. Atlantic Fleet (Code FOFA-42)Building 132Norfolk, VA 23511

FORWARDING LATE DOCUMENTS.— Attimes, you may receive documents after you havesubmitted the returns for that accounting period.Any documents you receive subsequent to yourforwarding of the returns for the accountingperiod you have just completed must also be for-warded with a letter of transmittal to theappropriate FAADC. You should label thesedocuments to indicate the name of the ship’s storeofficer who is rendering the returns, the ship’sstore returns, the accounting period to which thedocuments are applicable, and the name and unit

identification code of the ship. See your NAV-SUP P-487 for detailed instructions.

ADJUSTMENT TO AMOUNTS RE-PORTED ON PREVIOUS SHIP’S STORERETURNS.— When you must make an adjust-ment of receipts because of estimated receiptprices, forward the priced invoice to theappropriate FAADC in support of the adjustedamount recorded on the current Ship’s StoreBalance Sheet and Profit and Loss Statement(NAVCOMPT 153).

FORWARDING CORRECTIONS TO RE-TURNS.— When corrections to returns arenecessary after the returns have been submitted(i.e., an incorrect inventory figure, an incorrectfigure for receipts or markdowns below cost, etc.,were reported), you must take the following stepsimmediately:

1. Prepare a corrected NAVCOMPT 153reflecting the changes.

2. Forward to the appropriate FAADC thecorrected NAVCOMPT Form 153 along with thesubstantiating documents for those captions thatwere changed.

FORWARDING MERGED RETURNS.— Asmentioned earlier, if the total of the merged perioddoes not exceed 5 consecutive months, you canmerge the returns for a fractional period with thereturns for the previous or subsequent periodupon written authorization from the commandingofficer except for the returns for the periodending 30 September. When you determine thatthe returns must be merged, forward copies of thewritten authorization immediately to NAV-RESSO, the appropriate FAADC, and the NavyRegional Finance Center, Washington, D.C.When you must merge the returns for the periodfrom 1 September to 31 October, forward a re-quest for exception to NAVRESSO with a copyto the appropriate FAADC and the NavyRegional Finance Center, Washington, D.C. Youmust include the original of the letter authoriz-ing the merged returns when you submit thereturns to the FAADC.

DELAYS AND DELINQUENCIES.— If forsome reason the returns cannot be submitted onor before the date they are required to be sub-mitted, the commanding officer must forward aletter to the appropriate type commander explain-ing the reason for the delay and the anticipated

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mailing date for the late returns. A copy of theletter must be forwarded to the Naval SupplySystems Command (Deputy Commander, Pro-gramming and Financial Management, Comp-troller), to the appropriate FAADC, and toNAVRESSO.

FORWARDING A COPY OF THE RE-TURNS FOR THE NAVY SUPPLY CORPSSCHOOL.— To help provide current training aidsfor officer students preparing for shipboardduty, you should mail one copy of the Ship’s StoreBalance Sheet and Profit and Loss Statement(NAVCOMPT 153) for the accounting periodending 30 September to the following address:

Navy Supply Corps SchoolCode 45Athens, GA 30606

Disposition of Retained Returns

All ship’s store and clothing retained returnsshould be retained on board for a period of 2years. After 2 years, the retained returns can bedestroyed according to guidelines in Disposal ofNavy and Marine Corps Records.

When the ship’s store officer is relieved at theend of the accounting period, the ship’s storeofficer who is being relieved and the relievingship’s store officer will both conduct a completeinventory. Ship’s store returns that are approvedby both ship’s store officers will then be prepared,submitted, and retained as described earlier.

When the ship’s store officer is relievedsometime within an accounting period and themerging of returns is not possible, the ship’s storeofficer who is being relieved must make certainthat all funds have been collected and depositedfor the period of accountability. Next, a physicalinventory is taken and all the records are balancedbut not closed. When satisfied that financialaccountability has been established, the relievingofficer will receipt for the vouchers that were pro-cessed by the relieved officer but were not receiveduntil after the end of the last accounting period.The relieving officer will then submit a return atthe end of the normal accounting period.

If the relieving officer is not satisfied with therecords, the commanding officer can direct therelieved officer to close the accounts and renderthe ship’s store returns for the relieved officer’speriod of accountability only. In these ways, theretained records and returns serve to establish andtransfer accountability in the ship’s store.

ANALYSIS OF SHIP’SSTORE OPERATIONS

Just as the ship’s store records and returns areused in the establishing and transferring ofaccountability from one person or activity toanother, the returns also serve as a valuablemanagement tool for the improvement of ship’sstore operations. Once you have closed out therecords and submitted the returns, it is time tosit back and take a careful look at your ship’sstore operation. How effective has your ship’sstore been this accounting period in carrying outits goals? You can find answers for certain ques-tions from the data you have entered in yourship’s store returns. Some guidelines you can usefor analyzing your ship’s store returns from amanagement point of view are presented in thissection.

INTERNAL ANALYSIS

As a senior Ship’s Serviceman, you will be ex-pected to assist the ship’s store officer in analyz-ing the completed NAVCOMPT 153. Some of thefollowing factors should be taken into considera-tion. Each of these factors is an important aspectof your ship’s store operation.

Sales-Stock Ratio

As described in chapter 4, your sales-stockratio is computed so that you can determine theefficiency of your ship’s store in maintaining anoptimum stock level over a given period of time.A 1.33 to 1 ratio of sales at cost price to be-ginning inventory, less standard clothing items,is the requirement for a 4-month accountingperiod. You obtain your stock turn figure bydividing your cumulative of expenditures for thenumber of months covered by the beginninginventory. You must take the opening inventoryfigure from the NAVCOMPT 153. Thecumulative expenditures are contained in linesB19, B21, B23, B24, B26, and B27 on your NAV-COMPT 153. If you find that your stock turnratio is significantly less than 1.33, you shoulddetermine the cause and take the steps to improveyour ratio. Start with a complete check of yourstock on hand.

You have just completed and closed out yourrecords so you now have an itemized inventory

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to work with. Check the items in your storeswith the stock in your bulk storeroom toensure that everything you have on board isavailable to the crew. After you are satisfiedin that area, you can check for dead stockand excess stock. Remember, both dead stockand excess stock may be disposed of by transfer,markdown, or return to the vendor. On theother hand, sales may have decreased in yourship’s store for some other reason. Perhapsyou should consider new types of merchandise,better displays, or even conducting special salesto move the stock out.

Markups

The markup over cost or transfer price ofitems to be sold in the retail store(s) and serviceactivities is the responsibility of the ship’s storeofficer. However, in the final determination ofyour retail prices, you, as the senior Ship’sServiceman, must consider any transportationservice charges. For determining retail prices whentransportation service charges are applicable, con-sult the guidelines set forth in your NAVRESSOP-81.

You must also determine if and how yourretail prices should be rounded off. Give properconsideration to the convenience and efficiencywith which sales can be made in long lines, suchas the ice cream and fountain lines. Rounded-offprices could really increase efficiency in thesecases.

The ship’s store officer will prescribe thepercentage of markup to be applied to specialorder items. The pricing policy for foreignmerchandise is officially prescribed in your NAV-SUP P-487. Consult the NAVSUP P-487 forguidance.

Operation Expenses

Operation expenses include the costs of anyitems you need to operate your ship’s storeactivities. The term cost of operation has probablybeen familiar to you from your first day in anyship’s service activity. In fact, you probablyremember hearing your supervisor constantlyreferring to the cost of operation during traininglectures. (Your supervisor was trying to coach youto keep the costs down.)

Cost of operation items are consumed directlyin the performance of a service to patrons andinclude all items used by service activities,such as the laundry, barbershop, and tailorshop. Cost of operation items also includerepair parts used for vending machines andice cream machines. The term cost itemsincludes those items of ship’s store stock thatare carried for ultimate expenditure as costof operation materials for modernization andimprovements of ship’s stores. Cost items alsoinclude any cost of sales items that requirefurther processing or manufacturing beforesale. Examples of cost of sales items wouldinclude fountain ingredients, soft drink syrup,carbon dioxide gas (CO2), straws, spoons, andpaper cups. From an analysis of your ship’sstore records, are these costs reasonable? Canthey be cut?

Vending Machines, AmusementMachines, and Dollar Bill Changers

All vending machines, including machineslocated in authorized messes, must be operatedas a service activity of the ship’s store. Moneyboxes must be secured according to the rules setforth in your NAVSUP P-487.

The ship’s store officer is responsible for thecollection and deposit of any funds received fromsales in your vending machines. You, however,must make certain that all cash from sales in yourvending machines is collected and recordedseparately from sales in the retail store and salesin the fountain. You must see that the cash fromyour vending machines is collected daily and anytime before you have any repairs made to the coinmechanisms. When conditions make it impossiblefor the ship’s store officer or designatedcollection agent to collect the cash from thevending machines, you, or the vending machinecustodian, may take the following actions for eachmachine:

1. Take the meter reading.

2. If the meter is not installed, compute theunits sold using the formula outlined in yourNAVSUP P-487.

3. Remove the locked money box from eachvending machine. Deliver the locked money box(with the meter reading or a computation of

7-27

units sold) to the person designated to collect thecash.

The cash must be counted in the presence ofthe vending machine custodian and the designatedcollection agent. The agent must make certain thatthe vending machine collections agree with eitherthe meter reading or the number of units sold foreach individual machine. During your internalanalysis of the ship’s store records and returns,make certain that this procedure is strictly adheredto in your ship’s store. Also, make certain thatyour records are accurate and complete.

LEASED AMUSEMENT MACHINES.— Toinstall and use any leased amusement machinesin your ship’s store, you will need approval bytechnical experts in the ship’s force. These techni-cians will make certain that the machines are com-patible with your shipboard and electronicsystems. Money boxes in leased amusementmachines should be secured in the same manneras they are in your other vending machines. Thetotal amount of amusement machine collectionsshould be deposited with the disbursing officeraccording to the procedures outlined in yourNAVSUP P-487. Upon preparation of theMemorandum Cash Sale invoice Deposit of Cashwith the Disbursing Officer, you must includeon the DD 1149 the total amount of collectionsfrom amusement machines as a contribution toShip’s Store Profits, 178723. At the end of eachmonth, request a check from the disbursingofficer as a charge to 17X8723.2301, SSPN,transaction type 21, functional account 75400,in an amount equal to the contractor’s shareof the amusement machine collections. Reportthe amount of the checks on line C18 of yourNAVCOMPT 153 at the end of the accountingperiod.

Meters must be installed on each machine toreflect the total cash receipts in each machine. Themeter reading should be taken each time cash iscollected from a machine. At this time, try todetermine if the machine is functioning properly.Does the cash collected balance with the meterreading? Make sure that all meter readings areentered in the appropriate column of the NAV-SUP 469.

According to the terms of your lease agree-ment, a check amounting to the contractor’s shareof total cash collected must be remitted to thecontractor on a monthly basis. Send a letter of

transmittal along with the check, and include thefollowing information:

1.

2.

3.

4.

5.

Period covered for each machine

Current meter readings

Previous meter readings

Number of plays

Contractor’s remittance

DOLLAR BILL CHANGERS.— After in-stallation of dollar bill changers has beenapproved by the type commander, make certainthat the appropriate procedures are followed.

Are dollar bill changers in a high trafficand well-illuminated area?

Is the machine safeguarded with a wiremesh screen or a lockable restraining bar acrossthe front of the coin box area?

Has a separate change fund been estab-lished for the dollar bill changer according to therules set forth in the NAVSUP P-487?

The person designated to pick up the ship’sstore sales should also be the person responsiblefor the machine. Have the machine emptied andrefilled as frequently as necessary and at the closeof each business day. Use a separate page in theNAVSUP 470 to record each transaction andvalidate the accuracy of the change fund each timethe machine is opened or refilled. Overages andshortages in the machine will show up on theNAVSUP 470 and must be initialed by the ship’sstore officer as discrepancies occur.

Ship’s Store Profits, Navy

Ship’s Store Profits, Navy (SSPN), is a trustfund carried on the books of the Treasury Depart-ment. Monies in this account accrue from salesin ship’s stores. The net ship’s store profit thatis generated during a single accounting periodmust not exceed 15 percent of the cost of retailsales. The 15 percent profit margin has beenset fort h under the provisions of Title 10U.S. Code 7604. The profits derived fromretail sales in the ship’s store are the basicsource of the funds that are made available forthe commanding officer to use on expenditures

7-28

for the Recreation Fund. Such funds becomeavailable for expenditures for specific purposes.These funds must be expended within the dis-cretion of and under regulations prescribedby the Secretary of the Navy. Profits generatedby the ship’s store during an accounting periodmust be transferred according to guidelinesin NAVSUP P-487. Use a NAVCOMPT 2277 tocover the amount of ship’s store profits that willbe transferred to the Recreation Fund. Check yourNAVSUP P-487 for additional details.

EXTERNAL ANALYSIS

While you are using your ship’s store recordsand returns to determine ways to improve yourship’s store operations, your returns will also beaudited and analyzed by external organizations.The ways in which the FAADCS and NAVRESSOwill analyze the information you have submittedon your ship’s store returns are discussedbelow.

FAADC Analysis

Once you submit your ship’s store returns tothe appropriate FAADC (FAADCLANT orFAADCPAC), the FAADC does not just fileaway the returns. Just as you derive certainauditing and management information from yourship’s store returns, the FAADC also conductsan audit of the returns. Besides auditing yourship’s store returns, the FAADC performs thefollowing functions:

Maintains files and reconciles documentsfor receipts from purchase and receipts from othersupply officers

Effects reconciliation of all cash reportedin ship’s store returns

Effects payment of dealers’ bills

When the FAADC audits your returns, theauditors pay close attention to the headings onyour NAVCOMPT 153, your opening and clos-ing inventories, and the funds brought forward.Substantiation of all entries is very important.Substantiation is checked very closely. All loansand grants must be covered by authorizationdocuments and repayment plans.

Besides the submission of your returns,you must also provide the FAADC withrequired receipts documents. The FAADCwill file and reconcile these documents as partof the external analysis of your ship’s storeoperation. On a monthly basis, you mustforward one legible copy of each receiptdocument covering receipts by purchase(DD 1155) and receipts by transfer (DD 1149,1348, and 1348-1) under a letter of trans-mittal. These documents must be forwarded asfollows:

For service designator R:

Fleet Accounting and Disbursing CenterU.S. Pacific Fleet (Code AF3-2)937 North Harbor DriveSan Diego, CA 92132

For service designator V:

Fleet Accounting and Disbursing CenterU.S. Atlantic Fleet (Code FOFA-42)Building 132Norfolk, VA 23511

Receipt documents covering transactions forthe month must be separated by purchase andtransfer documents (each with an attached addingmachine tape listing cost price) and must bemailed no later than 7 days after the end of eachmonth. Documents should be securely packagedin envelopes or boxes. The name, address, andunit identification code of the ship should appearin the upper left corner of each package, underwhich will be “Receipt documents for the montho f . ” If two or more packagesare used, the number of the package should beincluded. A copy of the letters of transmittal andadding machine tapes must be filed with theretained returns. If no transactions occurredduring a month, a negative letter report shouldbe forwarded to FAADCLANT or FAADCPACfor that month. Procedures for adjustments toreceipt documents are outlined in NAVSUPP-487.

NAVRESSO Analysis

The Navy ResaleOffice (NAVRESSO)

and Services Supportuses the information

you submit in the NAVCOMPT 153 to preparean analysis of your ship’s store operation. See

7-29

figure 7-7. NAVRESSO then submits the analysisto your type commander. The type commanderuses the analysis to evaluate your ship’s storeoperation. In this way, the type commander canspot any ship’s store that might be in trouble andin need of help. On the bottom part of the opera-tions analysis statement, NAVRESSO providescomments that are directed specifically to the typecommander for guidance.

The primary purpose of the operationalanalysis is to point out stock turn and per-formance errors in other phases of your ship’sstore operation. NAVRESSO derives the analysisof your ship’s store operation by using yourfigures on the NAVCOMPT 153 and the follow-ing formulas. (Refer to the caption numberson the Operational Analysis report in figure7-7.)

Ship’s store stock turn equals the total of cap-tions 2 (cost of retail sales), 5 (operating expenses),9 (bulk sales), 10 (transfers to O.S.O.), 12 (costof sales—VM), and 13 (cost of operating VM)divided by the ship’s store opening inventory (cap-tion 20).

Gross profit equals retail sales (caption 1)minus cost of retail sales (caption 2).

Average sales per person/per month (at cost)equal a total of captions 2 (cost of retail sales),5 (operating expenses), 12 (cost of sales—VM),and 13 (cost of operating VM) divided by thenumber of persons supported (caption 22).

Vending machine profit percentage equalsvending machine profit (caption 14) divided bydrink vending machine sales (caption 11).

Amusement machine profit percentage equalsamusement machine profit (caption 16) dividedby amusement machine sales (caption 15).

Notice that stock turn is based on the open-ing or closing inventory only rather than on theaverage inventory for the period. As ship’s storesare on a 4-month accounting period rather thana monthly accounting period, the use of anaverage inventory will not significantly alter thestock turn. For this reason, NAVRESSO uses theopening or closing inventory in the operationalanalysis.

Among the comments, the most commoncomplaint is the failure of a ship’s store to meetthe 1.33 stock turn ratio. This error usually resultswhenever a ship’s store holds too much inventoryin relation to sales. Upon examination of ship’sstore returns, NAVRESSO has found that whenships repeatedly fail to meet the required stock

turn, these ships are usually overstocked oncertain items.

The operational analysis is designed to helpyou to improve your ship’s store operation. If youare having problems or if you simply desire moreinformation to keep your ship’s store up-to-date,remember that NAVRESSO is only a telephonecall away. NAVRESSO is always ready and will-ing to give you assistance.

OPERATIONAL OBJECTIVES

Whenever you conduct your own internalanalysis of your ship’s store operation from yourrecords and returns or you receive the results ofan external analysis, the following managementobjectives will serve as excellent guidelines for anoperationally sound ship’s store. Review theseguidelines periodically as you review your ownrecords and returns. Throughout your ship’s storeoperation, use these guides to achieve your desiredoperating results.

1. You are required to make four stock turnsper year. You will attain this annual goal byachieving a stock turn of at least 1.33 peraccounting period.

2. Conduct a monthly review of all stock andall stock records.

3. You must attain a gross profit of approx-imately 15 percent to cover your general operatingexpenses, such as the General Fund assessment,cost of operations, markdowns, and surveys, andso you will not jeopardize your profits availablefor transfer to the Recreation Fund.

4. Maintain the cost of operations expense at2.5 percent, but not more than 5 percent of salesper accounting period.

5. Your canned-drink vending machine profitis based on the cost and selling price of sodas.Your can-type soft drink net vending machineprofit should be at least 32 percent of your can-type soft drink vending machine sales.

6. Use the guidelines in the NAVSUP P-487to attain your planned operating profit for thefountain service operation.

7. Maintain an in-stock position of all itemsof reoccurring demands. Keep your inventorieswithin the prescribed limits.

7-30

Figure 7-7.—Ship’s Store Afloat Operational Analysis.

7-31

SHIPS WITHOUT SUPPLYCORPS OFFICERS

Ship’s store records on ships without SupplyCorps officers must reflect the same measure ofaccuracy and completeness that was discussedearlier in this chapter. In preparation for thesubmission of records and at other times,the verification of ship’s store records muststart with a review of the stock and the stockrecords.

INVENTORIES

On ships without Supply Corps officers, aninventory of all stock in the retail store and in thebulk storeroom should be taken at the end of eachmonth, upon the relief of the ship’s store officer,and upon relief of the ship’s store operator. Theseinventories should be recorded on a locallyprepared form and all entries should be madein ink. The inventories should be retained onboard.

CLOSEOUT OF RECORDS

Inventories must be taken jointly by the ship’sstore officer and the ship’s store operator. Im-mediately after the inventory, the balance on eachNAVSUP 209 should be checked. If necessary,the balance should be brought into agreement withthe balances reported on the inventory. Aftercompletion, the inventory should be extended andtotaled and then the storerooms should be openedfor operation. If a satisfactory balance is notobtained, the store must remain closed untilproper balancing is done. The store must alsoremain closed until a concrete difference is deter-mined to exist and this difference is made amatter of record. At that time, the commandingofficer can authorize the reopening of the ship’sstore.

Closing Out the NAVSUP 209

At the end of the month, the Stock Tally(NAVSUP 209) card should be closed out. Theending balances should be carried forward to thenew month. When closing out the NAVSUP 209,compute sales by subtracting the inventory at theend of the month from the last balance on theNAVSUP 209. See figure 7-8.

Closing Out the Cashbook

On the last day of each month aftercompletion of business for the day, the ship’sstore officer will count the cash on handand will total each column of the cashbook.The last entry in the Balance on Hand columnmust agree with the amount of cash on hand. Seefigure 7-9.

PREPARATION OF THEFINANCIAL CONTROL RECORD

The Financial Control Record (NAVSUP1099) should be prepared and balanced according

Figure 7-8.—Closeout of the stock tally cards.

7-32

Figure 7-9.—Closeout of the cashbook.

7-33

Figure 7-10.—Preparation of the Financial Control Record.

to guidelines in the NAVSUP P-487 and underthe following conditions. See figure 7-10.

At the end of the month

Upon relief of the ship’s store officer

Upon relief of the ship’s store operator

At the direction of higher authority

Any differences, gains or losses, or dishonestacts should be handled according to the pro-cedures contained in NAVSUP P-487. For moredetailed information on ships without SupplyCorps officers, consult your NAVSUP P-487.

The Financial Control Record (NAVSUP1099) with supporting vouchers should be sub-mitted to the appropriate FAADC. The Finan-cial Control Record should be submitted at thefollowing times:

Monthly within 5 days following the endof the month

Upon relief of the ship’s store officer

For more detailed information on the financialrecords for ships without Supply Corps officers,consult your NAVSUP P-487.

The information in this chapter has shown thevarious ways in which your ship’s store’s recordsand returns establish and transfer accountability.As a senior Ship’s Serviceman, you will haveimportant responsibilities for the accuracy of theserecords and returns. It is only through accurateship’s store records that you can begin to gain con-trol over your ship’s store operation. When youreport the financial position of your ship’s store,your records and returns must also reflect a levelof accuracy and integrity that can withstand anexternal analysis. As a senior Ship’s Serviceman,your responsibilities for establishing account-ability begin with your stock records andculminate in the effectiveness of your ship’s storeoperation.

7-34

CHAPTER 8

COMMISSARIES

The mission of a Navy commissary is to pro-vide authorized resale items for sale to authorizedcommissary patrons at the lowest practical price.The commissary operates within a facility that isdesigned and managed to meet the standardsused in commercial food stores. As a seniorpetty officer in charge of a commissary, you willhave many contacts with civilian dependents andretired personnel as well as active duty militarypersonnel. You must use all of the managementskills and knowledge available to you to improveservice, to stimulate sales, and to promote moralefor the benefit of all of your commissarycustomers.

SCOPE OF OPERATION

Commissaries will consist of any or all of thefollowing departments:

Department S-1—Grocery, prepackagedmeats, and household

Department S-3—Red meats, pork,poultry, and seafood products requiring pro-cessing (as distinguished from prepackaged meatsof Department S-1)

Department S-4—Fruits and vegetables(fresh)

Department MS—Miscellaneous supplies

ORGANIZATION, CONTROL, ANDADMINISTRATION

The field support office (FSO) of the NavyResale and Services Support Office (NAVRESSO)performs the primary support functions of theNavy Resale and Services Support Office over thecommissary. All orders and instructions issued bythe Navy Resale and Services Support Office FSO

in the discharge of these functions will have thesame force and effect as if the orders were issuedby the Navy Resale and Services Support Office.

NAVRESSO

For an individual commissary, the NavyResale and Services Support Office performs thefollowing functions:

1. Recommends to the Commander, NavalSupply Systems Command for the establishmentand disestablishment of stores

2. Initiates instructions, notices, and manualchanges, as appropriate, pertaining to operations

3. Conducts surveys, management reviews,and advisory visits to stores to evaluate individualperformance and compliance with policies,directives, and procedures issued by the NavyResale and Services Support Office, the NavalSupply Systems Command, and higher authority

4. Purchases materials as required andestablishes and administers field procurementpolicies in connection with purchase of certainmaterials

5. Prepares plans for store designs and layoutsand maintains liaison on these matters with theNaval Supply Systems Command and othertechnical bureaus, commands, or offices con-cerned

6. Develops commissary budgetary require-ments, administers allotments for procurement ofmaterial under the Navy Stock Fund project, andadministers the Commissary Reserve Fund

7. Conducts store management courses fornaval officers and civilian personnel and preparesfield operational training material

8. Exercises inventory control when neededin the operation of a commissary

Most of these functions are only a telephonecall away. Usually, arrangements for any of theseservices can be made by telephone via the resaleactivity officer in charge and the NAVRESSOFSO.

8-1

SENIOR ENLISTED ASSIGNMENTSAND RESPONSIBILITIES

As a senior Ship’s Serviceman, you willprobably be assigned to a commissary as a super-visor of one of several areas. In this position, nomatter what area you will supervise, there will berules, regulations, and procedures. These rules willgovern the operation of your area. You will havethe responsibility of staying ahead of your opera-tion. To do this, you must make certain that allof your manual changes and NAVRESSO noticesare up-to-date and properly routed when they arereceived. At all times, you must be aware of theNavy’s policies on waste, fraud, and abuse.

Before reporting to your commissary, youmust attend one of the available schools on theoperations of a commissary. You can obtain thedates and areas of available schools on Navy com-missaries for your particular paygrade throughNAVRESSO’s Commissary Operations Group.

Generally, first class petty officers (E-6s) andchief petty officers (E-7s) are assigned supervisorypositions in areas of receiving, sales floor, frontend, or warehouse. There are several other posi-tions to which you could be assigned uponreporting to a commissary. In these positions, youwill be in constant contact with civilians who areeither vendors or customers. At all times, youmust remember your standards of conduct. Uponchecking in to your store, you will be asked toread, understand, and sign a copy of the standardsof conduct. Be sure you read these standardscarefully and understand them before you sign.You are expected to adhere to and promote thesestandards.

At present, senior petty officers who are super-visors in the Ship’s Serviceman rating are havingproblems with junior personnel not understandingthe magnitude of certain legal and moral aspects,such as accountability, responsibility, mis-appropriation, personal loans, favors, gifts, freemerchandise, and personal gains through com-missary business. The standards of conduct arealways posted in your store and are touched uponin notices and instructions, but they are hardlyever explained in detail. You, as a senior Ship’sServiceman, must assume this responsibility. Youmust be accountable to yourself knowing that youhave done everything to make certain that yourpeople, both military and civilian, understand thegoals of the commissary and that they areworking toward those goals.

TRAINING

Besides on-the-job training (OJT), NAV-RESSO conducts workshops and seminars andprovides assistance visits. Usually NAVRESSOwill offer the workshops and seminars on an as-needed basis in order to introduce new pro-cedures, refresh personnel in existing procedures,and improve communications in particular areasof commissary management. Upon request,specialized assistance in all areas of commissaryoperations is available from NAVRESSO. TheCommissary Management course is given six timesper year in Athens, Georgia, at the Navy SupplyCorps School. This course is a 4-week manage-ment course for personnel who will be reportingto key commissary management assignments. Thiscourse will allow you to earn a 3113 or 3114 NECfor Commissary or Navy Exchange.

BILLETS

In most cases, billets in your commissary con-sist of department supervisory positions. In allcases, you will need all the professional growthyou have accumulated as you have gone up theladder to this point in leadership. Some of thepositions in your commissary to which you mightbe assigned are listed below:

Commissary manager

Sales floor supervisor

Cash cage supervisor

Office supervisor

Receiving supervisor

Produce department supervisor

Meat department supervisor

There are other positions to which you mightbe assigned, but in most cases the ones listedabove are a good bet. These positions are in com-missaries all over the world. For a current listingof areas and positions, you should contactNAVRESSO by letter or AUTOVON. NAV-RESSO will be happy to assist you. You must stillbe assigned by your detailer, but the informationNAVRESSO can provide will be helpful to youwhen you are discussing where you want to goon your next assignment.

8-2

MANAGEMENT OF FUNDS

More than ever before, the public is becom-ing increasingly interested and aware of financialaccountability at U.S. Navy activities. Your com-missary is no exception. Financial accountability in the commissary is critically important. Ac-countability in the commissary must cover the useof public monies and the money the commissaryreceives from customers in exchange for merchan-dise. As a supervisor in a Navy commissary, youmust first possess personal financial integrity. Youmust then be aware of the accountable respon-sibilities of your subordinates. The informationbelow should provide you with some practicalguidelines on the security of commissary funds.

SECURITY OF FUNDS

As a supervisor, you will be responsible formaintaining the necessary security over com-missary funds. The handling of commissary fundsplaces strict duties and responsibilities on com-missary personnel who are assigned to account-able positions. These duties and responsibilitiesare indirectly shared by every person who is work-ing in the commissary. As a supervisor, you mustinsist upon the observance and fulfillment of theseduties and responsibilities. You must also makecertain that fundamental precautions are beingcarried out properly in your commissary.

First of all, the number of individuals who areauthorized to handle funds must be kept to aminimum. This minimum number of personsshould be consistent with the needs of the activity.As additional security, all sales, including creditsales, should be cleared through cash registers atthe time of the each sale. Cash registers shouldbe installed at locations where patrons canclearly see the registration of the amounts of theirpurchases.

Authorized Cash Collectors

Only properly designated and bonded collec-tion agents are authorized to collect receipts fromregister operators. Authorized collectors are alsothe only persons who are permitted to collectreceipts from sales in their own names and toretain these collections in their custody overnight.

Only in an emergency can an officer in chargedesignate an unbended individual to collect salesreceipts from register operators. The officer incharge will be solely responsible for all collectionsmade by the unbended person. Immediately after

the collections are made, they must be turned into the officer in charge.

Collection agents are authorized to handleonly official change funds and funds collectedfrom sales. Each collection agent must befurnished with written instructions that outline indetail the funds that the agent is authorized tohandle. The instructions include detailed pro-cedures the agent must follow for accepting fundsinto custody, retaining the funds, and thenreleasing them from his custody.

Restrictions

In no event can a collection agent handle fundsthat he or she has not been designated specificallyto handle. Also, a collection agent is never per-mitted to comingle funds. The collection agent isnot permitted to operate a cash register or to takecash register readings except in exceptionally smalllocations with limited staffing, or whenever thisaction is specifically approved by the Navy Resaleand Services Support Office.

The funds in the safe of the collection agentmust never exceed the amount of the authorizedchange funds plus the previous day’s receipts fromsales. When two or more collection agents areused for one commissary, only one agent can bedesignated to make deposits with the disbursingofficer. In the absence of the regular collectionagent, an alternate collection agent can bedesignated to perform these duties. However, thisis the only exception.

During the scheduled absence of the primarycollection agent, necessary arrangements must bemade so that cash receipts can be collected anddeposited daily. The cash receipts should not beheld over during the primary collection agent’speriod of absence.

Physical Security

As a senior Ship’s Serviceman, you must aidin checking that adequate precautions are takento ensure the physical security of funds. Theseprecautions include the provision of a separatesafe or a separate interlocking safe compartmentfor each individual designated to collect cash. Anysafe that is used for holding official funds musthave the Underwriters’ Laboratories’ burglarylabel of at least a class E rating standard. (Fora class E rating, the safe must have a solid steeldoor with a minimum thickness of 1 1/2 inches.The door must be equipped with a relockingdevice. The rest of the safe must have a minimum

8-3

thickness of 1 inch of solid steel.) The safe mustbe anchored to the floor (or to a wall if the safeweighs less than 750 pounds).

Safes should be located in properly securedspaces that have been specifically designated forthe safekeeping of funds. Admittance to thesespaces should only be through self-closing andself-locking doors. All external windows, vents,or other openings that might offer a means ofentry must be secured by gratings, expandedmetal, or bars and must be protected by a directwire tie-in to the station security alarm system oroffice. The collection agent’s office, itself, neednot be protected with a security alarm system.However, any spaces that are used for commissaryfunds must be protected by an alarm system.

The officer in charge should review re-quirements with the station security officer to con-sider which system (ultrasonic, capacitance,audio-detection, or other) is best suited to theneeds of the commissary. When this determina-tion has been made, the officer in charge willinitiate action to procure and install the selectedsystem as soon as possible. Upon receipt of anappropriate request, the Navy Resale and ServicesSupport Office will provide the financialassistance to support the installation of thesecurity system. Offices of collection agents mustnot be used or occupied by persons other thanthose designated to handle cash collection fromsales.

Transportation of Funds

Once funds are safely collected and held, theymust be transported. The commitment to securitycontinues during transportation of the com-missary’s funds. Whenever funds are transportedfrom the commissary, certain authorized methodsmust be followed. Any commissary supervisor ormanager who is responsible for commissary fundsshould consult NAVRESSOINST 4065.39 for thelatest security measures that must be takenwhenever funds are transported from any com-missary location.

GIFTS, PERSONAL LOANS,EMPLOYEE CHECKS, ANDMISCELLANEOUS EXPENDITURES

No person employed or assigned to duty in aNavy commissary may accept gifts, loans, orfavors from any person or firm engaged inbusiness with or known to be attempting to engagein business with the store. No person, either

military or civilian, concerned with the operationor administration of commissaries is authorizedany special privileges or services. Unauthorizedprivileges and services include samples or otherfree merchandise, reduced prices on merchandiseor services, charge sales, loans of merchandise orequipment, or cash bonuses. Favored treatmentin any way is not authorized. If you (or your per-sonnel) are offered gifts or samples, simply statethat you cannot accept anything because it isagainst regulations.

Personal loans must not be made from com-missary funds for any purpose. A personal checkdrawn by or in favor of an employee who is anauthorized patron may be cashed in the store.However, the employee’s check must be depositeddaily. It is strictly forbidden to withhold fromdaily deposit any employee’s check. Although,there is no existing authority that covers theexpenditure of commissary funds for gifts or con-tributions for commissary parties or picnics,commissary personnel are not permitted toborrow money from the cash register, changefunds, or cash receipts for personal use. Underno circumstances are IOUs ever permitted.

MANAGEMENT OF STOCK

As a supervisor in a Navy commissary, youmay play an important role in the procurement,management, and sale of stock in your store.Stock for a Navy commissary is defined as articlesintended for resale, consumable materials exceptoffice supplies intended for use, and minor equip-ment and parts. Consumable materials and minorequipment and parts should be carried ininventory until they are issued for use.

AUTHORIZED STOCK OBJECTIVES

In your management of commissary stock,you must learn how to meet the probable demandsof your store. You must also learn how to staywithin prescribed, authorized limits. Refer to table8-1 as you read the information below.

Items falling within the categories listed intable 8-1 are authorized for procurement for resalein Navy commissaries. In table 8-1, the quantitiesappearing within each major commodity grouprepresent the minimum number of line itemsauthorized and the recommended stock level forthese items when sufficient shelf and storage spaceis available. The recommended amount is not afixed ceiling, but represents that level of

8-4

Table 8-1.—Stock Item Review List

S-1 GROCERY DEPARTMENT ITEMS

GROUPNUMBER REVIEW MONTH

10

11

12

14

15

16

17

18

19

20

21

22

22

23

OVERSEAS

OVERSEAS

OVERSEAS

OVERSEAS

OVERSEAS

OVERSEAS

OVERSEAS

OVERSEAS

OVERSEAS

OVERSEAS

OVERSEAS

OVERSEAS

OVERSEAS

JAN, JUL,

MAY, NOV

FEB, AUG,

JUN, DEC

FEB, AUG,

JUN, DEC

MAR, SEP,

JAN, JUL

JAN, JUL,

MAY, NOV

APR, OCT,

FEB, AUG

FEB, AUG,

JUN, DEC

APR, OCT,

FEB, AUG

MAR, SEP,

JAN, JUL

JAN, JUL,

MAY, NOV

MAY, NOV,

MAR, SEP

FEB, AUG,

JUN; DEC

JUN, DEC,

APR. OCT

MERCHANDISING GROUP

BABY NEEDS

BAKED GOODS FRESH

BAKING MIXES, BAKING NEEDS

BEVERAGES, BEVERAGE NEEDS

BREAKFAST FOODS

CONDIMENTS

COOKIES, CRACKERS

DAIRY PRODUCTS

DESSERTS

DIET FOODS

FISH, CANNED

FROZEN FOODS, BAKED GOODS

FROZEN FOODS, FISH, SEAFOODS

FRUIT CANNED (EXCLUDINGTOMATOES)

8-5

RANGEOF

ITEMS

60-150

57-130

54-110

37-74

42-88

41-100

44-93

73-148

24-48

21-42

12-28

159-325

20-60

Table 8-1.—Stock Item Review List—Continued

S-1 GROCERY DEPARTMENT ITEMS—CONTINUED

GROUPNUMBER REVIEW MONTH

24

25

27

31

32

33

34

35

36

37

38

39

40

41

OVERSEAS

OVERSEAS

OVERSEAS

OVERSEAS

OVERSEAS

OVERSEAS

OVERSEAS

OVERSEAS

OVERSEAS

OVERSEAS

OVERSEAS

OVERSEAS

OVERSEAS

FEB, AUG

JAN, JUL,

MAY, NOV

MAR, SEP,

JAN, JUL

MAY, NOV,

MAR, SEP

JAN, JUL,

MAY, NOV

MAY, NOV,

MAR, SEP

FEB, AUG,

JUN, DEC

MAR, SEP,

JAN, JUL

APR, OCT,

FEB, AUG

JUN, DEC,

APR, OCT

APR, OCT,

FEB, AUG

APR, OCT

FEB, AUG

APR, OCT,

FEB, AUG

MAR, SEP,

JAN, JUL

MERCHANDISING GROUP

FRUIT DRIED

HOUSEHOLD& LAUNDRY SUPPLIES

JUICE, JUICE DRINKS

MEAT PREPACKAGED,

REFRIGERATED

MILK, CANNED&DRY

PAPER PRODUCTS

CAT & DOG FOODS

PICNIC SUPPLIES

PICKLES, OLIVES, &RELISHES

PREPARED FOODS AND SPECIALTIES

SALAD DRESSING, MAYONNAISE

SALT, SEASONING, SPICES

SHORTENING, OIL

SNACK & PARTY FOODS

8-6

RANGEOF

ITEMS

6-12

59-108

38-76

57-120

6-12

30-60

30-70

6-12

30-60

58-125

24-48

47-125

4-18

44-84

Table 8-1.—Stock Item Review List—Continued

S-1 GROCERY DEPARTMENT ITEMS—CONTINUED

GROUPNUMBER REVIEW MONTH

42

43

44

45

46

47

48

49

50

51

52

53

54

89

99

JAN, JUL,

OVERSEAS MAY, NOV

JAN, JUL,

OVERSEAS MAY, NOV

MAY, NOV,

OVERSEAS MAR, SEP

MAY, NOV,

OVERSEAS MAR, SEP

APR, OCT,

OVERSEAS FEB, AUG

FEB, AUG,

JUN, DEC

ANYTIME

JAN, JUL,

MAY, NOV

ANYTIME

JUN, DEC,

OVERSEAS APR, OCT

MAR, SEP,

OVERSEAS JAN, JUL

FEB, AUG,

JUN, DEC

FEB, AUG

JUN, DEC

ANYTIME

SOAP & DETERGENTS

SOUPS

SUGAR

SYRUPS AND MOLASSES(INCLUDING HONEY)

VEGETABLES, CANNED OR GLASS

VEGETABLES & RICE, DRIED

ONE TIME BUYS (SEE NOTE 2)

HOLIDAY ITEMS (SEE NOTE 3)

DRY ITEMS PROCURED OFFSHOREBY OVERSEAS REGIONS

GOURMET FOODS

HEALTH AND BEAUTY AIDS

CANDY (SEE NOTE 5)

ICE CREAM NOVELTIES

FEDERAL SUPPLY CLASSIFICATIONITEMS

SIGNIFICANT UPRs/50¢ OR 28% LESSTHAN REGULARLY ESTABLISHEDCOST PRICE

TOTAL RANGE OF LINE ITEMS

RANGEOF

ITEMS

33-66

35-70

7-10

9-18

58-116

12-24

15-30

150-200

70-80

20-52

1615-3190

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Table 8-1.—Stock Item Review List—Continued

S-3 MEAT DEPARTMENT ITEMS

RANGE OF LINE ITEMCOMMODITY MINIMUM RECOMMENDED

BEEF 38-58

PORK (OTHER THAN SMOKED) 6-12

PORK (SMOKED) 5-10

VEAL (WHEN AVAILABLE INAREA) 2-6

LAMB 5-10

POULTRY 6-20

SEAFOOD 0-4

ETHNIC FOOD (SAUSAGE, TRIPE,CHITTERLINGS) 3-20

TOTAL RANGE OF ITEMS 65-132

S-4 PRODUCE DEPARTMENTS ITEMS

FRESH FRUITS, FRESH VEGETABLES, AND NUTS

RANGE OF LINE ITEMCOMMODITY MINIMUM RECOMMENDED

FRUITS 20-60

VEGETABLES 38-80

NUTS (IN THE SHELL) 2-4

TOTAL OF LINE ITEMS 60-144

MERCHANDISING GROUP RULES

NOTE 1: A 6-digit catalog number will be assigned to each item in the stocklist and price catalog. The group number that is designated for eachmerchandising group will be used as the first two digits of thecatalog number to be assigned to each item within that merchan-dising group.

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NOTE 2:

NOTE 3:

NOTE 4:

NOTE 5:

Table 8-1.—Stock Item Review List—Continued

MERCHANDISING GROUP RULES—CONTINUED

Items in this group are restricted to the groups and subgroupsauthorized herein but ordered on a one-time basis. Quantities orderedshould normally be for a 2-week period but will not exceed onemonth’s anticipated sales. The number of one-time items carriedwill not exceed 60 unless approved by the Navy Resale andServices Support Office. Items will not be assigned to this groupif they are purchased to test patron acceptance.

Gift packs that include unauthorized items and/or component partswill not be stocked unless it is apparent that the total cost priceis not influenced by the cost price of the unauthorized item/part.For example, if a gift pack of cheese included a cutting board andknife and the total cost value was no greater than the regular priceof an equivalent amount of the same cheese, then the cutting boardand knife constitute a free customer premium and the item can bestocked. In the case of filled Easter baskets, if the total cost ofthe item exceeds the total cost of the candy components, then theitem cannot be stocked.

Commissaries are not authorized to sell medical devices or drugswhich require a prescription. Commissaries are authorized to stockthose nonprescription devices and medications which are availableover the counter in the United States. All products sold must belabeled following the Food and Drug Administration regulations,and must meet the provisions of the Comprehensive Drug AbusePrevention and Control Act of 1970. Guidance on the provisionsof this act will be requested from the activity’s medical officer.

The following specialty seasonal candy will not be stocked:

Valentine’s Day Candy (boxed hearts)

Valentine’s Day, Easter and Christmas, hollow, solid, and filledchocolate figures and novelties

Individual Christmas candy canes and filled stockings

selection that would normally satisfy the vastmajority of patrons. The officer in charge maystock any number of line items above theminimum authorized limit to meet patrondemand. Any increases above the authorized stocklevels, however, are subject to the restrictionsimposed by staffing limitations, the availabilityof shelf and storage space, and the need to main-tain accountability. The number of line itemsstocked should not exceed that amount that wouldprevent the maintenance in the S-1 grocery sec-tion of an overall 95-percent in-stock position

and a 100-percent in-stock position of designatedmaster stock assortment of “never out” items.

A line item is any item that requires an in-dividual description for a determination of pro-curement requirements, regardless of whether thedetermination is made by the vendor or by storerepresentatives. Table 8-1 reflects the commoditygroup, group number, and range of line itemsrecommended. Also included is a list of merchan-dising rules to which each commissary muststrictly adhere. Items listed for procurement inyour commissary in Departments S-1, S-3, and S-4

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are listed in table 8-1. Refer to this table carefullyfor the purpose of the information in this chapterand for future use.

Table 8-1 has been provided for your infor-mation and to assist you with patron’s requests.Table 8-1 should help you to answer some of thequestions you may have in the future from patronsconcerning when a particular stock item will becarried by the commissary.

STOCK CONTROL SYSTEMS

The maintenance of accurate stock controlinformation will be important to you for manydifferent reasons. As a supervisor of a com-missary, you must have accurate stock controlinformation to obtain merchandise for resale, tomaintain a satisfactory in-stock position formerchandise, and to have the right amounts ofmerchandise on hand at the right times fordisplays, paydays, and seasonal periods. Youmust also have accurate stock control informa-tion to maintain control over the inventories youhave on hand so that you will not exceed theinventory levels established by NAVRESSO. Withaccurate stock information, you can prevent thebuildup of excess stocks that will result in poorinventory control and outdated stocks.

Currently there are three authorized stock con-trol systems in use in Navy commissaries.

1. Manual system—The manual stock controlsystem is used in small regions in overseas loca-tions that do not have computers. The manualsystem is also used in CONUS stores wheneverrequirements must be determined for stock itemsthat are procured by the short-cycle-weekly-delivery method.

2. Apple IIE computer system—This Applesystem is used in larger regions in overseas loca-tions. The Apple IIE is a small minicomputer thatperforms calculating and printing functions fora commissary’s stock control system. The pro-cedures used by the computer are very similar tothose used in the manual stock control system.

3. Automated Commissary System (ACS)—The ACS is currently being installed in all CONUSregions to replace the outdated Monrobot X1system and the L2000 system. The ACS is a com-puterized stock control system developed to pro-vide data-processing support for procurement,stock control, merchandising, accounting, andmanagement information functions for com-missary stores in CONUS. The system uses amainframe computer based at NAVRESSO. The

computer is connected by telephone lines toRemote Job Entry (RJE) terminals at the fieldsupport offices (FSOs) or regional offices. Datais prepared, encoded, and transmitted by the fieldactivity to the mainframe at NAVRESSO whereit is processed, then transmitted back to the field,where it is printed and distributed for use. TheACS provides a commissary with the ability tomanage inventory by service levels, which areassigned to items based on their importance. TheACS also provides the controls the Navy needsto establish systemwide in-stock positions basedon available inventory dollars and manpowerallowances. The ACS allows the individual com-missary to eliminate excess safety stocks, toincrease order sizes, to provide improved servicesand lower selling costs to the patron, to reduceinventory levels, and to increase labor efficiency.

The information above provides a mere over-view of the systems that are available to theindividual commissary. It is your responsibilityto dig out current NAVRESSO instructions sothat you can stay abreast of what stock controlsystems are available for your commissary.

STOCK REVIEW ANDCUSTOMER REQUESTS

Your knowledge of stock review will help youto answer questions from customers and to satisfymany of your customers’ requests. One of themost frequently asked questions will be: “Whenwill this commissary start carrying(a specific item)?” Requests will usually involvean item patrons have seen through an advertise-ment of some sort. Table 8-1 shown earlier in thischapter should provide you with enoughknowledge about the requested item of stock sothat you will be able to answer patrons’ questions.Your knowledge of the table will save you manyembarrassing moments and will keep you fromhaving to say the famous five words: “Let me askthe boss.”

The most important person in your com-missary is the customer. To treat the customer likea VIP, you must stay abreast of commissary pro-cedures. You will find that the customers will leavein a happy mood most of the time when they canget answers to questions that assist them inplanning their shopping. Remember, you do notreally need to try to remember the commoditygroups or to memorize the months or ranges ofline item numbers. You just need to keep the listavailable to help you give your customers fastservice and correct information. Review the

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Federal Supply Classification Group 89 items withlike commodities. In this way, you can considernew products, voluntary price reductions, or otherspecial price offerings made by any supplier orsupplier’s representative at any time.

Supervisors in charge of Navy commissariesshould take all practical measures to assure thatthe items stocked meet the reasonable re-quirements of store patrons. Commissary ItemRequest (NAVSUP 1157) forms should be madeavailable to all patrons for their requests,recommendations, and remarks concerning com-missary items. A proper space furnished withwriting instruments should be provided for thepatrons who desire to make requests and recom-mendations. Completed request forms should beturned in daily to the commissary’s manager orofficer. The commissary’s manager or officershould review the requests and determine thefeasibility of each request or recommendation. Allrequests or recommendations containing thepatron’s address should be answered.

SPECIAL STOCK ITEMS ANDLEGAL RESTRICTIONS

Because of legal or safety restrictionsassociated with certain items of stock, you mustbe aware of the special handling and sales pro-cedures you will be required to follow. You willalso need to recognize the conditions under whichsales, solicitations, and other activities are strictlyprohibited. Some of the safety precautions andlegal restrictions are discussed below.

Pest Control Agents

Pest control agents offered for sale in yourcommissary must be limited to those that havebeen registered for use by the Pesticide Regula-tions Division, U.S. Department of Agriculture,and that are NOT prohibited by applicable stateor local laws. Restricted pesticides cannot beprocured for resale in your commissary. Re-stricted pesticides include highly toxic pesticidesand other pesticides that are too hazardous forman or the environment (animals and crops). Therestriction on their sale, purchase, use, or posses-sion is necessary to protect the public as definedby federal, state, or local government. In all casesconcerning a pesticide for sale in a Navy com-missary, a certification must be obtained from thevendors as to registration with the PesticideRegulations Division, U.S. Department ofAgriculture.

After you have procured the pest controlagents authorized for resale in your commissary,you must follow certain procedures for theirdisplay. Arrange and display pest control agentsaccording to their type. For display purposes, usethe following categories to group your pest con-trol agents into types.

1. Space aerosols (for spraying air indoors)2. Pressurized sprays and residuals (that

should never be used to spray air indoors)3. Poison baits4. Concentrates (that must be diluted accord-

ing to the directions on the label before use)

Use appropriate signs and warning statementsin displays for each type of pest control agent.Signs cautioning patrons on the use of pest con-trol agents should always be displayed at all loca-tions where these agents are offered for sale. Besure to provide suitable storage space for pestcontrol agents. You must take special care toavoid contamination of other resale items in yourcommissary with resale commercial pesticides.

Medical Items

Commissaries are not authorized to sellmedical devices or drugs that require prescriptionsor that are subject to abuse. Drug and medicinalitems offered for sale in Navy commissaries mustbe labeled according to Food and Drug Ad-ministration regulations. Therefore, commissariesare authorized to stock devices and medicines thatare available “over the counter” in the UnitedStates. All products sold must meet the provisionof the Comprehensive Drug Abuse Preventionand Control Act of 1970. You can acquireguidance regarding provisions of this act fromyour activity’s medical officer.

Unauthorized Stock Items

Items not falling within the broad categoriesin the authorized stock list in your CommissaryOperating Procedures Manual, NAVRESSOINST4065.23, must not be procured for sale or use inthe commissary without the specific approval ofthe Navy Resale and Services Support Office. Theletter requesting approval should contain justifica-tion for the items. When approval is received fromthe Navy Resale and Services Support Office, pro-curement should be effected in the same manneras for other authorized items. When the items areprocured by requisition through another Navy

8-11

activity or by purchase, the date and file numberof the Navy Resale and Services Support Office’sletter of authority must be included on the requisi-tion or purchase order.

Concessions

Grant no concessions! You are prohibitedfrom granting concessions or making any otherarrangements with dealers or tradesmen in whichvendors are allowed to make sales by agreementto pay a portion of their profits to your com-missary or to receive payment for articles sold byinvoicing them to the commissary. Remember, asa senior Ship’s Serviceman, you will have severalother Ship’s Servicemen working for you who willhave direct contact with vendors. Most of thevendors are “straight shooters,” but you shouldalways impress on your people the chance thatthey will come up against that one “supersalesperson.” All it takes is one infraction indealing with commercial vendors and your con-trol over your commissary and your subordinateswill be seriously affected. With duty assignmentsrotating as often as they do, you must constantlyhold training for both your experienced peopleand your new ones. You should cover the Navy’sStandards of Conduct in all training sessions.

Vending Machines

Vending machine services, such as those forcandy, cigarettes, and beverages, may be con-sidered a necessary convenience for your com-missary and your personnel. Vending machinesin a Navy commissary can be operated only bythe local Navy exchange.

Portable Fire Extinguishers

Portable fire extinguishers that do not bear theapproval label of recognized testing laboratoriescannot be procured for use in your commissary.

Sample Merchandise

The solicitation or acceptance of free samplemerchandise is strictly prohibited in Navy com-missaries. Remember, product evaluation andproduct selection are handled at the regional anddivisional level only. For more detailed informa-tion on these restrictions, consult the CommissaryOperating Procedures Manual, NAVRESSOINST4065.23, and follow the prescribed recommenda-tions.

Bonus Coupons

The use of bonus coupons is prohibited inNavy commissaries. Bonus coupons usually entercommissaries in shipping cases. These coupons areusually directed toward the personal benefit ofmilitary or civilian employees assigned to thecommissary.

Warn your commissary personnel that bonuscoupons are strictly prohibited. These coupons arenot a part of the resale unit and are intended forredemption in the form of gift premiums by com-mercial store proprietors or employees. Disposeof these coupons by donating them to charitableorganizations, such as Navy Relief. (You can alsodispose of them by supervising their destruction.)At any rate, give no special preference to the pro-curement, display, or handling of any merchan-dise containing bonus coupons.

Bonus Merchandise

Acceptance of any bonus merchandise youreceive, such as cameras and watches, that is notauthorized as a commissary resale item is strictlyprohibited in your Navy commissary. However,you can accept reductions in the unit price ofauthorized stock items when the extra merchan-dise is the same type of merchandise you haveordered. For example, if you ordered 250 cans ofcanned milk and the vendor sends 300 cans forthe same price, you can accept this type ofauthorized merchandise as a price reduction. Anynational commercial promotions, such ascustomer drawings, must be carefully screenedand handled according to strict regulations.

RECEIPTS

All resale merchandise, miscellaneoussupplies, and services procured and received bythe Navy commissaries during day-to-day opera-tions are classified as receipts. All receipts mustbe accounted for. Receipts of resale merchandiseshould be accounted for by appropriate entriesmade to the Journal of Receipts (CS 35). Receiptsof miscellaneous supplies and services should beaccounted for by appropriate entries made to theCS Trust Fund Accounts, Receipts and Expen-ditures Ledger (CS 28).

Control of Receipts

Receipt items received into the receivingbranch should be verified against vendors’

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delivery documents and the retained copy of thepurchase order or requisition. A receipt documentthat does not contain a preprinted certificationmust be stamped on the reverse with the follow-ing notation:

Receipt and Custody Certification

(Date) (Receiving Number)

“I hereby certify that I have received, inspected,and passed the items and quantities indicated onthe reverse hereof.”

(Receiving clerk’s signature andreceiver’s number)

Receiving Numbers

A receiving number from the Receiving Log,NAVSUP 975, should be assigned by the receiv-ing sections. Receiving numbers should comefrom a continuous series of numbers beginningeach month with 0001 or 001. Receiving numbersshould contain an appropriate prefix. The prefixshould indicate the commissary or distributioncenter and the number of the month. You shouldassign receiving numbers for Commissary TrustRevolving Fund (CSTRF) receipts in the samemanner as you would for the Navy Stock Fund(NSF) receipts. The only difference is that theserial number for the CSTRF receipts should bepreceded by the number 8 (for example, 8001 or801).

Receiving numbers for daily delivery-typeitems are assigned by the receiving section of thedistribution centers, branch commissaries, orindependent commissaries from a continuousseries of numbers for each T-53 (Daily DeliveryOrder and Inspection Report) vendor by the bill-ing period. Assignment of your numbers shouldnot be taken for granted. Understand that thismethod is your commissary’s control of itsreceipts, so keep alert.

PROCUREMENT METHODS

There are three methods of procurement thatare used in a Navy commissary. These methodsare as follows:

1. Long cycle—7 days, 14 days, 21 days, 28days

2. Short cycle (weekly)—7 days or 14 days3. Short cycle (daily delivery)—Less than 7

days, at least two deliveries (daily delivery)of major items each week

Some examples of merchandise ordered underthe long cycle are group 14—beverages, group16—condiments, group 33—paper products, andgroup 42—soap and detergents. The short cycle(weekly) method would include group 10–babyneeds, group 18—dairy products (other than freshmilk vendors), group 22—frozen foods, andgroup 53—candy. Under the short cycle (dailydelivery) method, you would procure group11—baked goods, group 18—dairy products(fresh milk vendors), and group 54—ice cream.These are just a few examples of the items pro-cured under the three methods used by Navycommissaries. Your NAVRESSO notices will tellyou the documents that are used for each method.(Since you will be relying upon NAVRESSOnotices, you must realize how important it is foryou to keep all NAVRESSO notices and publica-tions current.) The DD 1155 and the T-53 are themost frequently used procurement documents ina Navy commissary.

Lead time on the long cycle is usually over 12days. On the short weekly cycle, the lead time isunder 8 days. On the short daily cycle, there isno lead time; the merchandise is stocked on thesame day (for example, fresh bread and freshmilk). Regardless of what method of procurementyou use, all delivery documents from vendorsshould be itemized. Normally, merchandise pro-cured under the long cycle will be stored in thewarehouse. Merchandise procured under the shortcycle (weekly) will be stored in the store’s readyissue room. In all cases, merchandise orderedunder the short weekly or daily method will bestocked on the sales floor. In some cases, suchas a special sale, limited space in the ready issueroom may be used for short periods of time.

Automated Commissary System (ACS)and Daily Deliveries

Currently all commissaries in CONUS areusing the ACS. Under this system, daily deliveriesare accomplished through the use of DailyDelivery Order and Inspection Reports (T-53s).The TC-53s are printed by remote communica-tion link with NAVRESSO computers. The T-53sare then forwarded to the respective commissariesfrom the regional office and are maintained in theOpen Order file. Review the flow chart in

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figure 8-1 as you read about the reorder cycle pro-cess described below.

The commissary starts the reorder cycle bycalling in, to the vendor, the quantities requiredand noting the units ordered on a T-53. Upondelivery, the units received are recorded on theT-53 and on the vendor’s delivery ticket. You, asa supervisor, should remember that all shortagesmust be signed for by the vendor’s deliveryperson on both the T-53 and the delivery ticket.This is a common problem in the system so thesigning procedure must be strictly enforced. Youshould understand that failure to adhere to thispolicy of noting shortages will result in thevendor’s billing the commissary for units shippedinstead of the units delivered. This commonerror constantly contributes to delays in the pay-ment of invoices.

Each delivery must be transmitted by a com-munication link to the NAVRESSO computer.Delivery information is recapped and transmittedto the regional office where the Daily DeliveryInput Validation (071) form is printed. When theT-53 and the delivery ticket reach the accountingoffice, the information on these documents ismatched to the Daily Delivery Input Validation(071) form. If everything is in agreement, thematched documents are filed by date and by com-missary. If the 071 is not in agreement with theT-53, the difference is resolved and a Daily Cor-rection Sheet (073) is prepared. Upon receipt ofthe corrected Daily Input Validation (071), thedocuments are filed.

The daily delivery system is a good system. Itcan only fail if you, the receiver, drop the ballby not properly counting merchandise, checkingcase counts, and noting shortages and damagedmerchandise. Figure 8-1 illustrates the route takenby a T-53 on the ACS.

Warehouse and Distribution Centers

Efficient stock handling and storage re-quirements are the major interrelated work opera-tions necessary for effective overall commissaryoperations. Good practices and fundamentalprinciples are the key to quality warehousing. Ifyou become a senior Ship’s Serviceman workingas a warehouse manager, you will need to useeasily understood formats to achieve account-ability, control, and security of inventory andoperations.

The most logical method of organizing awarehouse facility and defining tasks andworkloads is by means of an organizational

chart. After you have assigned your people theirtasks and have leveled out your workloads, youshould provide your workers with the rules andregulations governing parking areas, time cards,breaks, and leave. You are now ready for youractual warehouse operation.

A successful commissary operation dependson your keeping shelves stocked with merchan-dise that customers want. While this may soundlike a simple task, it is actually a complex pro-cess involving procurement, merchandising,accounting, and warehousing. If all these pro-cedures had to be performed manually, theworldwide Navy Commissary System would re-quire a large administrative staff and theprocedure would take a great deal of time. TheAutomated Commissary System (ACS) wasdeveloped to facilitate these procedures. The ACSuses a network of computer terminals that arelocated at commissary divisions/regions andwarehouse/distribution centers. Using theseterminals, the regional offices encode the “raw”data and transmit it over the telephone to theNavy Resale and Services Support Office(NAVRESSO) where the data are accepted, pro-cessed, and stored. Then, at the request of theregion, processed data are transmitted back to theterminal in the form of reports, purchase orders,and breakouts. Most warehouse/distributioncenters have a “remote printer.” Remote printersreceive the encoded breakouts that have beentransmitted from the commissary to NAVRESSOand then back to the warehouse/distributioncenter. These printers are capable of receivingvarious reports that may be needed in day-to-daywarehousing operations. Some of the mostimportant printouts you will use in the com-missary are the Stock List Price Catalogs(SLPCs). These printouts describe merchandiseitems in the commissary division/region andidentify those stores in the region authorized tocarry the specific items. The SLPC is used bystores for pricing and by the regional office forreviewing total stock assortments. The warehouseuses the SLPC for slotting and inventory controlpurposes.

There are several subsystems used in the ACS.These subsystems are listed below.

Merchandise transfer subsystem—Themerchandise transfer subsystem uses datagenerated and processed at the commissaries, theregional offices, and NAVRESSO to determinerequirements for replenishing branch commissarymerchandise from the warehouse or distribution

8-14

8-15

center. The subsystem requires branch com-missary encoding of stock requirements by use ofportable electronic order entry devices andtransmission of the data to the NAVRESSO com-puter. The information picked up by the portablescanner is located on a “bar coded” shelf label.The computer processes the requirements againstits master files and provides transfer documents(T-973s) and packing labels for each warehouseor distribution center.

Standard price change (SPC) subsystem—The ACS standard price change (SPC) subsystemis a computerized method of processing standardprice changes for S-1 items in commissaries.Through this system, the computer generatesdocuments identifying the old and new standardprice for S-1 items and the standard price changeeffective date (SPCED). In preparing thesedocuments, the system automatically calculatesa new standard price based on the last standardprice, the new cost price, and a three-tier markuppercent. The three-tier markup percent includesa minimum, an assigned, and a maximum markuppercent.

Purchase order subsystem (includes inven-tory control)—The purchase order subsystem in-cludes mechanized inventory control functions ofcalculating sales and adjusted sales (using NIS[“not in stock”] percent), identifying unusualsales, updating average sales and variation in sales(for 14-day sales cycles), determining replenish-ment order quantities, and creating purchaseorders for warehouse items.

Direct store delivery subsystem—Thedirect store delivery (DSD) subsystem is concernedwith those items delivered by vendors to branchcommissaries in the region rather than to a cen-tral distribution point or warehouse. Purchaseorders for DSD items are not generated by thecomputer. DSD items are ordered by region orcommissary personnel. The computer generatesthe Daily Delivery Order and Inspection Report(T-53) form, which is a list of items authorizedto be ordered from data in the master files.

Accounting subsystem—The accountingsubsystem is a computerized method of process-ing receipts and adjustment actions to create theJournal of Receipts (JOR) and Journal ofAdjustments (JOA). The JOR and JOA transac-tions then become part of the reconciliation ofreceipt files for matching by the computer to

abstracted public voucher and summarized invoicetransactions.

These various subsystems are supported bytwo basic master files in the ACS. These files arethe Item Master File and the Vendor Master File.Both files are used in the control of variousinventory control and procurement actions. Theyalso provide data for the accounting and manage-ment functions that support the operations ofNavy commissaries. The master files include allitems except direct store delivery items. As men-tioned earlier, direct store delivery (DSD) itemsare delivered to each store. They are known asshort cycle or nonwarehouse (NWH) items andare generally of a perishable nature, such as milk,ice cream, and other similar products. TheVendor Master File (VMF) contains recordsidentifying the various vendors who are doingbusiness with the region. We are now at the pointin this chapter where control of actual stock isput into one word—inventory.

INVENTORY

Inventories are taken for four basic reasons.

1. To verify balances of stock on hand andstock record balances of inventories

2. To determine the differences betweenactual physical count and stock balances shownon records

3. To provide data for planning against recur-rence of the differences

4. To establish a correct money value balancefor accountability

As a supervisor or manager in a Navy com-missary, you must always stress the importanceof an accurate inventory. You should take partin the preparation and distribution of theinternal inventory procedures for your com-missary, including the time, method, and person-nel involved. In fact, inventory procedures shouldbe prepared in writing as an internal store instruc-tion and should be distributed to all commissarypersonnel concerned. As a supervisor or manager,you should conduct training for commissary per-sonnel before each inventory is scheduled. Mostinventories are taken by contracted services. Thisfact, of course, does not relieve you of yourresponsibility as a supervisor to ensure thateverything is accounted for. A good training pro-gram will help you to assist the contractinginventory team in doing a thorough job. You must

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remember that the only way to be sure is with theuse of double checks. A good policy for you tofollow is to random check as many areas as youpossibly can. At one time or another, almost everyShip’s Serviceman has had to do some seriousrecounting on board ship. Double counting hasalmost eliminated the problems of bad counts.The inventories taken by contracted personnelshould be completed in the same way as theywould be with Navy commissary personnel.

Physical inventories are usually taken on asemiannual basis at the end of the secondand fourth quarters of the accounting period.Special inventories are usually taken only bythe direction of NAVRESSO. Cyclical inventoriesare taken on established cycles. Cyclical inven-tories include reorder, standard price changes, andperpetual inventories. Of course, a perpetualinventory is also a cyclical inventory which is anongoing operation used for stock control and theordering of resale merchandise. The adjustedbook inventory is another inventory used by com-missaries and distribution centers when a physicalinventory at the close of the accounting periodis not needed. The physical inventory figure thatis used on the Cost of Sales worksheet is anadjusted inventory figure. In summary, an inven-tory in a Navy commissary can be any one of thefollowing types:

Physical inventory (sometimes performedby contract services)

Adjusted book inventory (performed bycommissary personnel)

Cyclical inventory (which includes severaltypes of inventories, such as price changes,reorder, etc.)

You must keep in mind that procedures mayvary somewhat from one commissary to another,depending upon availability of personnel andservices. You must read and understand yourcommissary instructions and stay abreast of them.As a commissary supervisor, you must keep yourNAVRESSO instructions current so you can per-form at the expected level.

The information you have read up to thispoint in the chapter has addressed the variousways in which the commissary store acquires theitems to be placed in the store for resale. In thenext section of this chapter, you will read aboutsome of the methods and procedures the seniorShip’s Serviceman, as a supervisor, will need to

follow to sell the merchandise through the frontend.

FRONT END PROCEDURES

The front end is the part of the store that isvisible to the patrons. It is also the part of thestore that will be used by the patrons. For thisreason, the way in which the front end is super-vised will have the greatest effect on the successof the overall operation of the commissary.

SALES FLOOR

The sales floor area must be maintained in aclean and orderly condition at all times. The stockand equipment should be arranged in a mannerthat will permit convenient and efficient shoppingfor the patron. If the stock is arranged by generalcategory, the patron can usually complete his orher shopping more successfully.

The amount of damaged or deterioratedmerchandise can be kept to a minimum as longas prescribed stock rotation and inspections arefollowed. Damaged merchandise that is still fitfor sale should be removed immediately to aspecial area where it can be offered for sale at areduced price. Items that have spoiled should beremoved immediately from the sales floor.

For the convenience of the patrons, shelfstocking should not normally be performed dur-ing the business day except when depleted stocksabsolutely must be replenished. If it becomesnecessary for shelves to be stocked duringshopping hours, you, as a supervisor, shouldmake certain that the aisles are kept free fromcartons, boxes, and materials-handling equipmentas much as possible. The meat area (S-3) and theproduce area (S-4) are extremely important. Asa supervisor, you must give special attention tothese areas.

Meat Sales Department (S-3)

Bulk meat and packaged meats for the meatdepartment (S-3) are received daily throughseveral types of procurement procedures. Usuallythese products are ordered and received on T-53s.When bulk beef, pork, and lamb are received, anArmy veterinarian inspects it for quality andtemperature. It is important that you maintainclose liaison with the veterinarian. Theveterinarian is there to help your operation andnot to hinder it. When you and the veterinarian

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work together, the results are quality products forcommissary patrons.

Frozen items are also received for the S-3department. For instance, whole turkeys, turkeyparts, and a large variety of pork, beef, andchicken parts are included in frozen food items.Although these items are frozen, you must payclose attention to ensure that correct temperaturesin the meat cases are maintained. Often, a casewill defrost and refreeze without any evidence ofthis happening. Of course, when this happens, thefrozen items should be surveyed. The bottom lineis that you should prevent this from happeningin your commissary. Keep a close eye on yourcases, the temperatures, and other frozen foodconditions that might cause a loss of items tosurvey. Case load limits and stock lines muststrictly be adhered to. Normally, your commissarywill have a butcher shop manager to oversee theS-3 department, but it is your responsibility as asupervisor to assist in making sure the overalloperation is running according to prescribed pro-cedures. Constant patrols of the meat display areaare a requirement of good commissary manage-ment. These areas must be kept dry and clean forsafety and health reasons. In the meat depart-ment, a 3 1/2-percent markup should be addedto the price of the meat before the items reachthe cash register. Just as with produce, when meatdepartment items are sold through the cashregister, the normal 5-percent surcharge is addedto the price of the items. Your meat departmentwill demand a certain percentage of your totalcommissary sales. This is usually always thehighest percent of sales. To maintain thispercentage, you must assist your meat departmentby keeping an eye on the display area for any typeof problems. Knowledge of the various cuts ofmeats is very easy to pick up. This knowledge willhelp you on the sales floor to assist customers withcommon questions. Meat-merchandising tech-niques are taught through NAVRESSO work-shops. Contact NAVRESSO through properchannels for any help you may need.

Produce Sales Department (S-4)

Bulk produce for Navy commissaries usuallyarrives from vendors by daily deliveries. The pro-duce sales department initiates and verifies thereceipts of bulk produce. After the produce isreceived, the produce sales department is thenresponsible for trimming, sorting, pricing, anddisplaying the merchandise.

For the commissary supervisor, produce is adepartment that requires constant patrol andsupervision. This tight control is necessary notonly for the sake of restocking at optimum timesbut also for keeping the area clean and safe forthe patrons. The customer should be able to movefreely through the produce area without steppingon fallen fruits and vegetables and suffering per-sonal injury. You will find that if you keep yourproduce area clean and well stocked, your saleswill remain at the desired percentage levels.

In the produce department, a 2 1/2-percentmarkup should be added to the price of the pro-duce before the items reach the cash register.When the items are checked through the cashregister, the normal 5-percent surcharge is addedto the price of the items. For the store to achievethese charges, the merchandise must be fit forresale. The information below should offer a fewrules a good supervisor will wish to enforce.

There are a few commonsense principles thatshould be observed by all commissary personnelworking in the S-4 department. First of all,“handle with care” should be an ironclad rule.As a supervisor, you should insist on theobservance of this rule by all personnel who willhave anything to do with the handling of freshfruits and vegetables in your commissary. Roughhandling will inevitably mean a serious loss inquality. Remember, quality is the most importantasset of any produce department. A loss in qualitywill always result in a loss in sales. You can evenreduce rough handling by the customer byarranging the displays so that the customer canmake selections without digging into the produce.

Another rule you should remember to enforceis “keep it cool.” Refrigeration will slow downrespiration (“breathing”) in fresh fruits andvegetables. Generally speaking, the lower the rateof respiration, the slower the loss of quality willbe. The produce that you display on the sales floorwill not require the low refrigeration temperaturesyou must use for extended storage. Temperaturesof 40°F to 50°F will keep most produce insatisfactory condition for resale for 3 to 4 days.Of course, there are the exceptions to this rule.Bananas, avocados, sweet potatoes, and one ortwo other commodities should not be kept underrefrigeration in the retail store under mostconditions.

The average commissary will need to donate10 percent of the space of the whole commissaryto the produce department. Because of this,proper display of the merchandise is essential.If you, as a supervisor, encounter problems

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associated with your produce department opera-tion, you will acquire the best answers throughNAVRESSO assistance. Produce MerchandisingAssociation techniques are being taught regularlyin NAVRESSO workshops. Contact NAVRESSOfor the help that you need.

AUTHORIZED PATRONS

Most of the most important aspects of frontend supervision is dealing with commissarypatrons in an effective, successful, and profitableway. One of the first responsibilities of com-missary personnel at the front end is to verify thatall persons who enter the commissary to makepurchases are authorized customers.

Definitions

As discussed earlier in this chapter, it is theresponsibility of the commissary to make certainthat all persons who make purchases in the com-missary identify themselves as authorized patronsor agents of authorized patrons. The commissarydoes not issue or approve any type of purchasecredentials. Similarly, the commissary is notauthorized to issue any type of guest entrydocuments. The definitions for authorized patronsand agents are contained in the Armed ServicesCommissary Store Regulations (ASCSR). In somecases concerning definitions of authorizedpatrons, other Naval Military Personnel Com-mand instructions may apply. Authorized creden-tials, as such, are listed in your ASCSR.Regulations governing reservists and dependentsof reservists are also contained in the ASCSR.You should consult this publication whenever youhave any doubts concerning authorized com-missary store patrons. It goes without saying thatyou should follow these regulations to the letter.

Pass Desk and Identification Checks

A pass desk or booth should be installed atthe entrance of every commissary. It is here thatyou or one of your pass desk attendants canidentify each person seeking entry as anauthorized patron, an agent of an authorizedpatron, a dependent, or a visitor. Instruct yourpass desk attendants to examine all purchasers’credentials so that your staff can recognize thatthe credentials are acceptable. Instruct your staffto take special care in making sure thatpurchasers’ credentials have not expired or beenaltered in any way. Whenever altered or expired

credentials are presented, your pass deskattendants should follow the procedures that havebeen established by the host command to deal withthese problems. Normally, the credentials shouldbe confiscated and receipts should be given if theyare requested by patrons.

At all times, you should maintain strict con-trol over the entrance and exit of visitors to thecommissary. Remember, visitors are persons whoare recognized by commissary management aspersons other than authorized patrons and com-missary employees on duty. Make sure that yourvisitors are logged in and out. You should alsoissue serialized badges identifying the types ofvisitors. Types of visitors for which you will wantto prepare special badges include vendor repre-sentatives and vendor stockers. Any baggers youmay employ should be issued visitor or baggerbadges. For all other authorized, official visitors,such as representatives from NAVRESSO, youshould issue badges marked Official Visitor. Theinformation in the visitors’ log should include thename, the purpose of the visit, the serial numberon the badge, the date, and the times logged inand out.

To allow for ready identification of store per-sonnel, all store employees should wear easy-to-see clip-on identification cards. You shouldencourage the use of these cards in all cir-cumstances. Employees who are stationed at thestore entrances for the purpose of checkingidentification credentials should be prominentlyidentified as commissary personnel. Theseemployees should be carefully instructed in allmatters involving procedures for checkingidentification, giving refunds, cashing checks, andanswering questions concerning the location ofrest rooms, layout of the sales floor, and othergeneral information they might be asked tofurnish to patrons. Just as in any other salesoperation, the persons who are assigned theseresponsibilities and who occupy visible jobs mustproject an image that reflects positively on thecommissary. Since these people are the patron’sfirst contact with the commissary, these employeesmust always exhibit a demeanor and anappearance that represent the commissary storein a favorable light.

AUTHORIZED TENDER

With the exception of charge sales, all com-missary patrons must use certain authorized formsof tender in exchange for purchases as cash. The

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types of tender that Navy commissaries areauthorized to accept from patrons are as follows:

Cash

Personal checks

Vendors’ coupons

Food stamps

Travelers’ checks

Money orders

Refund vouchers

If there are no available check-cashingfacilities, Navy commissaries may accept (andcash) United States government pay and allotmentchecks from properly identified patrons. Thisservice can be provided as long as the service doesnot adversely affect staffing or operations in thecommissary. The officer in charge or a designatedassistant must approve any U.S. governmentpayroll or allotment check before the commissarycan accept the check for payment or cash.According to prescribed limits, change funds inthe commissary should be increased wheneverapproved U.S. government payroll and allotmentchecks are cashed. In accepting U.S. governmentchecks, each commissary store must follow theprescribed regulations. These regulations are con-tained in NAVRESSOINST 4065.39.

CHECK-OUT PROCEDURES

As a front end supervisor, you must make cer-tain that the check-out phase of your store isoperated according to standard regulations andprocedures. You must also make certain that yourpatrons are not forced to spend too much timewaiting in line. With a little work and planning,you can comply with all regulations and still pro-vide an efficient check-out operation.

Your check-out staff will have many respon-sibilities. Check-out personnel must make certainthat all patron purchases are accurately recordedin terms of price and department. Check-outpersonnel are also responsible for acceptingmoney and making change. As in any retail opera-tion, cash and other forms of tender must beadequately safeguarded. All of these tasks mustbe completed in a way that will minimize patrons’waiting time.

In the check-out phase of your commissary,you must achieve good standards of service. Youshould staff and operate the check-out area so thatno more than four persons are forced to wait ina check-out line. To achieve this standard, youwill have to open additional registers for patronsto take care of heavy traffic in the check-out area.At times when you have fewer customers, you canclose the extra registers and distribute the waitingpatrons to the other lines. If customers arestanding in a line that you are planning to close,identify the last customer to be served and politelyroute the other customers to the other lines.

During sales hours, you should plan to havesupervisory personnel available to assist patronsat check-out areas. Make certain that your check-out lines are clearly numbered. Lighted lamppostswith numbers are an effective means of clearlymarking your check-out lines. If your store sizepermits, you can use a single line from which youcan direct patrons to the next available register.

A prime irritant among patrons is excessivewaiting lines at the check-out area. Commissarymanagers must constantly monitor the number ofpatrons awaiting check-out and, when needed,initiate immediate actions to supplement thenumber of check-outs in operation. Such actionswill include the assignment to check-outs of thoseregister operators who are performing other store-related tasks. A labor pool of intermittentemployees who are on call may also be usedto alleviate unforeseen patronage surges ortemporary absences of regular employees.Moreover, since all employees working in otherfunctional areas of the store (with the exceptionof the commissary officer, sales audit clerk, andthe cash collection agent) will be trained in theoperation of a cash register, they can be used inthis capacity during emergency situations.

As a front end supervisor, you or an assistantmust remain in the check-out area to assistcustomers during sales hours when customertraffic is heaviest. Head of the line privileges, useof express lanes, and other practices are coveredin current NAVRESSO instructions. It is your jobas a supervisor to consult these instructions andmake certain that the correct procedures arecarried out.

In a multicheck-out store when all check-outsare not being used, make certain your open check-outs reflect an even distribution across the check-out area. In this way, you can avoid patroncongestion in one area of the front end. Remindyour register operators that they are not permittedto keep personal belongings in the check-out

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area. You can use employee lockers to eliminatethis problem.

Instruct your check-out employees that theyare prohibited from smoking or drinking whilethey are performing check-out functions. Makecertain that check-out stands are washed daily.If you display merchandise at check-out stands,make certain that the merchandise does notimpede customer traffic.

Spacing requirements between check-outcounters are outlined in your NAVRESSOinstructions. If you think that you have a problemwith your front end spacing, check yourNAVRESSO instructions and take the necessarysteps. In stocking your counters, make certain thatyou have enough bags available and that the bagsare the correct sizes and variety. Store all bulkbags out of the patrons’ view. Use only bags forpacking groceries. You should not use boxes forthis purpose. You should try to comply with anyreasonable customer requests for double bags orseparate packing of perishables, frozen foods, icecream, and crushable merchandise.

The check-out register for the express laneshould always be the one nearest the entrance tothe store. By keeping the express lane near theentrance, you can maintain an easy replenishmentof hand carryout baskets.

Scheduling of Checkout Personnel

A well-trained, well-supervised check-outoperation will not be successful unless laborresources are scheduled according to workloadrequirements. If the number of customers variesfrom day to day and from hour to hour, as itusually does in Navy commissaries, and youschedule the same number of work hours fromday to day and from hour to hour, you are notadequately preparing the check-out operation toprocess patron purchases in a timely and efficientmanner. The goal for full-time and part-time mixin the check-out function is to achieve employ-ment of 25 percent of check-out personnel on afull-time basis and 75 percent of check-outpersonnel on a part-time basis. To balanceworkload and labor resources, you must take thefollowing actions:

1. Chart sales and patron transactions pro-cessed during each hour of each day, each daywithin the week, and each week within the monthby means of Sales Event Record (SER) Forms(CS 45) and the Checkout Operating ReportSummary.

2. After considering this historical informa-tion and other relevant factors, such as paydays,sales events, forecast sales, and patronage, assignthe work force on the basis of the anticipatedworkload. The employment of part-time workerscan be used to assist in the correlation of the workforce to the peaks and valleys of patronage. Thetotal work force should be scheduled over a14-day calendar period, based upon an employeepay period.

Supervising Check-out Productivityand Accuracy

Essential to your achievement of check-outoperation objectives is your effective, efficientuse of available labor resources. The degree towhich you can achieve these objectives dependsupon the adequacy of training, supervision, andscheduling and the degree to which you devotemanagement attention to each of these elements.

Since check-out operations involve closeattention to detail, interfacing with patrons, andthe handling and safeguarding of funds, it isessential that personnel be thoroughly trained atinitial hire. In addition, commissary personnelmay require continued training for the supervisorto correct any bad habits that may develop.Register operators must be impressed with theimportance of their function as it relates to thefinancial integrity of each department and thestore as a whole, as well as to the developmentof good customer relations.

Upon being hired, a register operator shouldreceive 8 hours of training and 1 hour ofindoctrination before being assigned to a cashregister. On a continuing basis, all registeroperators must receive 16 hours of trainingevery 6 months. The training should be pro-grammed as follows: 2 hours of-classroom instruc-tion, 4 hours of produce recognition, and 10 hoursof register accuracy and speed. Classroom instruc-tion should cover the policies and proceduresrelated to the handling of cash and other tender,departmental recording, overrings, voids andrefund procedures, and the replacement of“throw” receipt tapes. At commissaries equippedwith electronic registers, the terminals shouldalways be in the training mode during hands-oninstruction. A “read” report should be takenbefore and after training on the registers. Thesereports must be secured and verified during salesaudits. These results should be recorded on CS1. Since preparation for possible power failuresor cash register malfunctions is essential, practice

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sessions for such contingencies should be con-ducted during slack hours.

In the event of power failure or if the backupin electronic cash register systems fails, makeevery effort to process patrons who are in thestore. Patrons will be informed that their orderscan be processed but that the procedure will takelonger than usual. If patrons choose to leaverather than wait for check-out, they will beadvised that commissary personnel will returntheir selections to stock.

Cash Register Operations

If your store has more than one register, assignyour cash register operators to specific registers.In other words, do not allow your registeroperators to select their own registers. When yourstore has more than one register, do not assignthe same person to the same register on con-secutive days.

As a supervisor, you will be the person to issuekeys to the register operators. Each registeroperator should be issued a key to the lockingmechanism of the register to which the operatoris assigned. Register operators should not beissued any keys that would give them access tothe detail tape in the register or the terminal.Operators should also not be issued keys that readthe register. In fact, register operators shouldnever have access to the supervisory key, thereading keys, or the readings themselves.

Once an operator is assigned to a register, theoperator should make certain that the register isequipped with enough detail tape and throwreceipt paper at all times. The operator should alsocheck to see if the ink is producing legible tapes.The operator should give an accurate receipt toeach patron who makes a purchase. it is theresponsibility of the cash register operator toreplace throw receipt paper. It is the responsibilityof the supervisor to replace detail tape.

There are several precautions cash registeroperators should follow in all cash register trans-actions. So that all transactions can be observed,cash register windows should not be obstructed.Instruct all operators to check the bottom of eachpatron’s shopping cart to make sure all merchan-dise has been placed on the check-out counter.When accepting payment from a patron, theoperator should not place the cash in the draweruntil after change has been made and given to thepatron. The operator should then close the cashdrawer until the the next transaction begins.

Whenever the check-out supervisor mustoperate a cash register, the supervisory functionsof that person must be passed on to the nexthigher level of management. The retail manager,for example, may take over the supervisor’sduties, such as reading the supervisor’s register,approving voids, and carrying out other regularsupervisory responsibilities.

OVERRINGS AND UNDERRINGS.— Anoverring or underring is an error that occurs whenthe wrong price of an item is entered into the cashregister. The method of correcting these errors willvary according to the type of cash register installedin your store. At commissaries with electro-mechanical registers, the operator can correct theerror by entering in the same department and thedifference between the correct price and theamount that was rung in error. Next, the operatorshould advise the patron of the error and shouldmark the throw receipt to indicate the error. Whenan item is overrung, the register operator shouldprepare an Overring/Refund Voucher, NAVSUP972, and should fill in the appropriate boxes. Thevoucher should be signed by the register operatorand approved by the supervisor at the time of theoverring. At stores with electronic registers, aCredit Record, CS 5, or a supervisory key shouldbe used to control overrings and underrings. Onthe cash register, the key is usually labeled ErrorCorrect. For all voids of $2 or more, the operatorshould cite the reason for the action and shouldget the void approved by the supervisor at the timethe void is made.

Each day you should inform each registeroperator the amount that he or she was either overor short. To document these facts, you should usethe Daily Register Operator Record (CS 1) tomaintain a record of each cash register operator’sperformance. For stores with electromechanicalregisters, the columns designed for use with elec-tronic registers, such as rings per minute and auditaction, should be left blank. As a supervisor, youshould submit each cash register operator’s recordto the commissary officer along with the DailyCash Report and Sales Distribution Summary(CS 11) for review and appropriate action.

At commissaries with electronic cash registers,it is also the supervisor’s responsibility to main-tain the Price Look-Up (PLU) to track the priceof high-volume or difficult-to-price items. In thePLU, the supervisor can find the price of adesignated item. The price entered in the PLU isbased upon official price lists received from theregional office or the approved price provided in

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writing by the department manager and approvedby the commissary officer. PLU tapes shouldaccompany the register operator’s record and theDaily Cash Report and Sales DistributionSummary (CS 11) when these documents are sub-mitted for review.

Excessive differences must always be in-vestigated. If it is considered to be necessary, theindividual register operator will be required tocount, accept, and sign for transfers of funds. Ifexcessive differences continue, disciplinary actionsmay be warranted. Termination of employmentof civilian personnel may also result. You can usethis definition as a guideline: An excessive dif-ference is an individual shortage or overage of $1to $3 that occurs one-fourth or more of all thedays the individual is assigned to operating a cashregister. You must report any shortage involvingpossible fraud or criminal acts and any cashshortage of $250 or more according to guidelinesset forth in the NAVCOMPT Manual.

REFUNDS.— The Navy resale system has apolicy of “satisfaction guaranteed or your moneycheerfully refunded.” This policy is strictlyadhered to by Navy commissaries. Whenmerchandise is returned by a patron, this actionmust be recorded in your Patron Refund Log(CS 65). You must indicate the appropriateaction that will be taken on the item. Forexample, you should indicate whether the item willbe returned to stock, returned to the vendor, orsurveyed. In addition, an Overring/RefundVoucher, NAVSUP 972, should be prepared. Thisvoucher must be signed by the check-out super-visor and the patron. The patron will redeem theRefund Voucher at the check-out area. Anemployee, other than the check-out branch super-visor, should then see that the returned merchan-dise is returned to the applicable department,either for survey, for return to stock, or for returnto the vendor. The Patron Refund Log (CS 65)should be maintained by the check-out supervisor.

On a daily basis, the commissary officer willreview the Refund Log. The commissary officerwill compare the entries appearing in the RefundLog with the Overring/Refund Vouchers and withthe Survey Log (NAVSUP 976). At the end ofeach business week, the Refund and Survey Logs,along with the Daily Cash Reports and the SalesSummary (CS 11), should be forwarded to theregional office for review, audit, and retention.Copies of the forms should be distributed todepartment managers for information purposes.

RECONCILIATION OF THE CASHDRAWER.— At least twice a month on un-announced days and at unannounced times, thecommissary officer or a designated representativemust perform a reconciliation of register operatorcash drawers. A supervisor must perform theseactions for the purpose of verifying funds. Eachreconciliation must be conducted in the presenceof another member of the commissary manage-ment staff.

ACCURACY OF RINGING.— At un-announced times, the supervisor should checkeach register operator for accuracy of ringing.This check should be performed at least weekly.The supervisor should perform this check by re-ringing a patron’s purchase. The result of the testshould be recorded in a log that the supervisorshould maintain for this purpose. At commissariesequipped with electronic registers, the recheckshould be performed with the register terminalsin the training mode.

Safeguarding the Funds at Check-out

As a supervisor, you must monitor the securityof cash and all other legal tender in the store. Youmust be on the alert to ensure that commissarypersonnel are following correct procedures inhandling funds.

Cash funds for the register should be used onlyfor cash register transactions. The only registerssupplied with cash funds should be the registersthat are actually in use. Instruct your people thatat no time are they permitted to retain cash fundswhen the register is not in use. If a registeroperator leaves the register for any reason, theoperator must remove the till. At that point, theregister operator should secure the till in a special(identified) lockable compartment or should turnthe till over to the cash collection agent. The cashcollection agent is also required to retain thecash fund in an individually identified lockablecompartment.

All currency, coupons, checks, vouchers, andother forms of authorized tender must be placedand kept in a register drawer. The security precau-tions for cash funds should also apply to otherforms of legal tender. As mentioned before,whenever a register operator must leave theregister for any reason, the operator must removethe till. Then, the operator must either lock thetender in a special lockable compartment that isidentified for this purpose or turn the tender overto an authorized cash collection agent. If the

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operator turns the tender over to an agent, theagent must secure the tender in a lockable,specially identified container or compartment.

THEFTS FROM THE CASH REGISTER.—As a supervisor, you will establish and enforcecontrols at your commissary to maintain securityof money in the store. There are still variousmeans by which a dishonest employee mayattempt to get around these controls.

Theft from a cash register can occur when apatron pays the exact amount for a purchase,accepts the bagged merchandise, and leaves theregister without receiving a cash register receipt.(In other words, theft from a cash register canoccur at any time during the business day.) Adishonest register operator will place the cash inthe register with the next sale and accumulate anoverage in the cash drawer. Such theft is alsopossible if the clerk is operating with an openregister drawer. The overage is removed later. Theoperator may keep mental or written notes orother reminders as to the amount of the overage.An example of such reminders could be anaccumulation of matches near the register orpossibly pennies in the nickel or other coin till tocorrespond to the dollar amount of the overage.Other indications of this practice may be in theform of persistent small overages in an operator’scash drawer; that is, the even dollar amount isremoved and the small change left so that the clerkwill not be “short.”

The following examples of theft illustrateadditional methods that dishonest registeroperators (and supervisors) may try to use to beatthe security system in your store.

Underring—This method generally occursduring peak sales hours. The customer is chargedfull price but a lesser amount is recorded onthe cash register. The register receipt is discardedand not given to the customer. An overage is thusaccumulated for later removal. This practice ismade easier sometimes when register windows areobstructed so that the amount rung up cannot beseen by patrons or supervisory personnel.

Short ring—The register operatordeliberately fails to ring up one or more itemsduring a sale. On completing the transaction, theoperator tells the patron of the omission, addsthese items to the register receipt in pen orpencil, and then collects the correct amount forthe sale. An overage is created in the register forlater removal.

Overcharge—The clerk rings up thecorrect price but collects a higher amount fromthe patron. Again an overage is created for laterremoval.

Fraudulent refunds or overrings—Theoperator commits theft from the operator’s owncash drawer by creating spurious refunds and/oroverrings to cover the amount taken.

Altering refund/overring documents—Failure by supervisory personnel to control andvalidate refunds or overrings can result in thisabuse.

Theft from another register operator’s cashdrawer—This form of theft can occur when theregister is left unattended and the cash drawer isunlocked and the key has not been removed.

Theft from another register operator’sregister by use of a secret number—This type oftheft is possible when operators share their secretnumbers with each other for fraudulent purposes.

Theft from a common cash drawer orsafe—This type of theft can occur in a case wheretwo or more register operators share a commondrawer or two collection agents share a commonsafe combination. Without singular accountabilityfor the cash, responsibility is extremely difficultto pinpoint.

PREVENTIVE MEASURES.— Sooner orlater, almost every supervisor will run across adishonest employee. There are measures,however, that a good supervisor can take to lessentemptation on the part of commissary personnel.A few of these preventive measures are discussedbelow.

The cash register window facing theoperator should be unobstructed at all times. Theside away from the operator should also be clearso that ring-up figures can be readily seen bypatrons and by supervisory personnel. Thispreventive measure acts as a deterrent tounderringing.

All sales should be recorded promptly onthe assigned register.

Cash drawers should not be shared.

Error correctionskept to a minimum.

and no sales should be

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Overrings should be reported to andapproved by the check-out branch supervisor atthe time of occurrence. Delays are not authorized.

Refunds and returns should be madein the prescribed manner by the check-out branchsupervisor only. Note that even dollar amountshortages or overages should be given specialattention. Constant small overages in cash mayindicate underringing and the removal of evendollar amounts from the cash drawer. A dishonestemployee engaged in this practice will sometimesleave the small change in order not to be foundshort in the belief that management will not payas much attention to an overage as a shortage.

Cash register operators should not bepermitted to make sales to members of theirimmediate family.

At stores with electronic registers, theerror-correct and void keys must be used to cor-rect errors. The error-correct key should be usedimmediately following an erroneous entry (under-ring or overring) since the register is programmedto void the last entry when the error-correct keyis used. The register operator may then reenterthe item, ringing the correct price and department.A Credit Record (CS 5) should be inserted intothe register to record the error-corrects or voidsto permit an audit trail of total register operatorvoids for the sales audit function. On Bunker-Ramo electronic registers, voids and error correc-tions are controlled by the setting of a thresholdamount at which an error can be corrected by useof the void key. This feature, which would requirethe supervisor to perform remedial action whenthe threshold is exceeded, should be used. Whenan overcharge is discovered after the entire orderhas been totaled, corrective action will be effectedby means of an Overring/Refund Voucher (NAV-SUP 972) as described earlier and entered into theregister as a void. Where an entire order must bevoided out, prescribed void procedures should beused. Care should be taken so that voidedamounts are properly credited to the appropriatedepartments. All voids of $2 or more will requirethe approval of the supervisor at the time ofoccurrence.

Sales to commissary personnel should berestricted to those employees who are authorizedpatrons or their agents. Specific check-outs shouldbe designated for these transactions. For thesepurposes, an employee is defined as one who is

employed at any location within the region. Forexample, an employee assigned to the regionaloffice who is also an authorized patron will beconsidered to be an employee of any commissaryin that region when the employee desires to makepurchases. Such sales will be witnessed by thecheck-out supervisor or an individual at a highersupervisory level. Individuals are prohibited fromweighing, establishing the selling price, checkingout, or witnessing their own purchases or thoseof their agent’s sponsor or relative. Thoseemployees who are authorized patrons or agentswill not be required to complete any form or logthat is not required of other patrons.

Commissaries equipped with electronicregisters should use the Price Look-Up (PLU)capability for pricing high-volume or difficult-to-price resale items. All S-4 items should be assignedPLU numbers. No more than 50 grocery (S-1)items should be included in the PLU. The PLUfeature can be used to track the movement ofitems that, because of either their high sus-ceptibility to pilferage or their potential for shortdelivery, contribute to inventory losses.

The supervisor can also use the PLU to initiateany disciplinary action that may be warranted asthe result of a review of the previous day’s salesaudit or recent trends. At commissaries with elec-tronic cash registers, it is also the supervisor’sresponsibility to maintain the Price Look-Up(PLU) file for all such designated items, basedupon official price lists received from the regionaloffice or approved prices provided in writing bythe department manager and approved by thecommissary officer. Whenever a change is madeto the PLU based upon information provided bycommissary department managers, a file of suchauthorized changes must be maintained for aperiod of 18 months. PLU tapes should beattached to the CS 11 and submitted to theregional office. There are several means by whichthe PLU is used to the commissary’s advantage.They are covered in NAVRESSOINST 4065.34.This instruction should be thoroughly read andunderstood by the front end supervisor.

TOTALS, KEYS, READINGS, ANDJOURNAL DETAIL TAPES.— Group totalsmust never be altered, turned back, or resetwithout permission from NAVRESSO. This isbecause group totals must always indicate acumulative amount whenever these totals are read.Any group total reset keys, duplicate cash register

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reading keys, and duplicate drawer lockingmechanisms must always remain in the lockedcustody of the commissary officer.

Department totals should be reset when theregister is read and secured daily. For this reason,the department reading should be zero (0)whenever the reading is taken at the end of theday and whenever the register is opened for thebusiness day.

Cash register readings are usually taken by thecheck-out supervisor. In the absence of the check-out supervisor, the readings can be taken byanother person who has been specificallydesignated to handle this responsibility. Theregister operators and cash collection agents areprohibited from taking register readings;therefore, register operators and cash collectionagents should not be designated to take registerreadings when the check-out supervisor is notavailable to perform these responsibilities. In thesituat ion where the check-out supervisor operatesa cash register, another supervisor must bedesignated to take the readings for that register.The supervisor who is designated to take thereadings must retain the cash register keysduring working hours. All cash register readings,including the readings for each drawer or multiple-drawer cash registers, should always be taken atthe beginning of the working day and later whenthe registers are closed for the day. In fact, allregisters, including spares kept in another part ofthe commissary or in the warehouse, must be readat the end of the business day. This means allregisters must be read whether they have been usedor not.

Generally, it is the sales audit clerk who col-lects the cash register reading tapes. When adesignated person other than the sales audit clerkobtains the cash register reading tapes, thisperson must deposit the tapes in a locked box forsubsequent delivery to the sales audit clerk.

All detail tapes must be collected and securedat the end of each business day. Registeroperators and cash collection agents should nothave access to detail tapes. Although tapes,readings, and keys are not used at commissariesthat are completely equipped with electronicregisters, the security and control principlesdescribed above should be applied.

TRANSFER AND COLLECTIONS OFFUNDS.— There are various methods commissarysupervisors can use to safeguard funds whenever

funds are transferred and collected at check-out.Some of these methods are discussed below:

Transfers of funds—Certain individualsshould be designated as cash collection agents.These persons should issue change funds, makepartial collections of receipts, and accept all fundsat the close of the register operator’s workday.Register operators should not count funds re-ceived or turned in unless they are directed to doso by the commissary officer because of unusualoperator cash variances. In this case all transfersof funds between the register operator andcollection agent will be counted by the registeroperator in the presence of the collection agent.Both parties will indicate their acceptance of thecount by signing a Cash Receipt Certificate(NAVCOMPT 2114). If deemed necessary bythe commissary officer, counts by the collectionagent may be witnessed by another person whowill also sign as witness to the count.

Partial collection of funds—In order tokeep funds held at the check-out to a minimum,to ensure timely deposits, and to lessen the cashcollection agent’s end-of-day workload, thecommissary officer will establish schedules forpartial collections to be taken throughout thesales day. As a minimum, a partial collectionshould be made at least 1 to 2 hours before thecommissary closes. All checks, vendor coupons,food stamps (except those needed to makechange), and the bulk of $10 and $20 bills shouldbe picked up and prepared for the partial pickup.Pickups should also be made if the dollar volumeof business experienced before the day’s bankdeposit warrants inclusion of such receipts in thedeposit. Normally, partial collections of cash andcash items will be made by the cash collectionagent who will not receipt for the funds collected.However, when a person other than the collec-tion agent, such as the retail supervisor or check-out supervisor, is authorized by the commissaryofficer to make pickups, a Cash ReceiptCertificate (NAVCOMPT 2224) must be issued.All counts will be verified by the register operator.The receipt must be signed by both the registeroperator and the person making the pickup. Theoriginal receipt must be held by the registeroperator and turned in to the collection agentwhen the final turn-in is made. The copy mustbe turned in to the collection agent with the cashand collected cash items. The collection agentshould then verify the counts in the presence ofthe person making the collection. A receipt must

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be signed by both parties and retained by theperson making the pickups. If checks are part ofthe pickup, the receipt should indicate the numberof checks only, not the dollar amount.

SUMMARY

You have just read an overview of commissaryoperations and the responsibilities with which you,as a senior Ship’s Serviceman, may become

involved. Of the functions and operations coveredin this chapter, good customer service, ap-propriate security of funds, integrity of storepersonnel, and sound management practices allprovide an important basis for the success of anyNavy resale operation. Whether you are assignedto a commissary store in a shore billet or to aship’s store afloat, you, as a senior Ship’sServiceman, should be able to use the informa-tion in this chapter to evolve into your future roleas a manager and supervisor in the Navy’s resalesystem.

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CHAPTER 9

RETAIL OPERATION MANAGEMENT(ROM) SYSTEM

At the time this chapter was written, the RetailOperation Management (ROM) system had notyet been totally implemented and tested in theNavy resale system and ship’s stores afloat. Bythe time this rate training manual is published,the only phase that will most likely be completedby most fleet ships is the assignment of a six-digitclass number, followed by a four-digit sequencenumber to all items of ship’s store stock. Thesenumbers are assigned to both contract and SSACitems (an example is circled below).

At present, the system is being worked on andtested. As soon as it is completely implementedand satisfactorily functioning, study guides andoperating manuals will be available. It isimportant for you, as a future manager and super-visor in the Navy resale system, to realize thatmuch of the information you have already readin this rate training manual will be changed tosome degree. You can at least expect the resaleprocedures will be different. As a result of theeventual implementation of the ROM system,clerical tasks will be performed faster and withgreater accuracy. This benefit will allow you moretime to manage your on-the-spot operations.Also, the system will help you to increase theefficiency of your operations by providing youwith the means to see what is going on within youroperation at any given time.

OBJECTIVES AND PURPOSES

The ROM system is structured to providetangible benefits to people, such as the ship’s storeofficer, supply officer, assist teams, and senior

Ship’s Servicemen. All of these people will be endusers of the system. Some of the most visible andimportant benefits to the senior Ship’s Servicemanwill be in the areas of inventory control, logistics,and financial management. As with any newsystem, tests and evaluations before and afterimplementation aboard fleet ships will benecessary for a period of time until the “bugs”are worked out. With the ROM system, the func-tional managers under the Naval Supply SystemsCommand (NAVSUPSYSCOM) will be respon-sible for testing and certifying the implementa-tion of the functional systems under NAVSUP’scontrol. This testing and certification processserves two purposes: (1) to verify that the systemhas been fully implemented and (2) to makecertain that the services being provided to resalemanagers and supervisors in the fleet are useful,acceptable, and beneficial.

The ROM system is not intended to replaceany current resale equipment or systems.However, certain equipment items, such astypewriters, may be reduced as the ROM systembegins to take hold. The following retaildocuments are examples of some of the documen-tation ROM will be handling:

1. Journal of Receipts, NAVSUP 9772. Journal of Expenditures, NAVSUP 9783. Financial Control Record, NAVSUP 2354. Stock Record, NAVSUP 4645. Vending Machine Control, NAVSUP 2366. Ship’s Store Balance Sheet and Profit and

Loss Statement, NAVCOMPT 153

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Information that is pertinent to the im-plementation of the ROM system will be basedon data contained in some of the followingreferences:

1. Ship’s Store Afloat Manual, NAVSUPP-487

2. Afloat Supply Procedures, N A V S U PP-485

3. Department of the Navy Automated DataSystems Documentation Standards, S E C -NAVINST 5233.1B

4. Navy Management System Support Office(NAVMASSO) Terminal Users Guide, No. 26,and other NAVMASSO standards and SNAPstandards.

As a senior Ship’s Serviceman, you must alsobe prepared to learn new languages with the newROM system. Work-related terms and knowledgeof their meaning are a must in the Ship’sServiceman rating. Because the new terms willrelate to the computer, we will not likely haveadditions to some of our old terminology. Withthe caliber of the Ship’s Servicemen in the ratingtoday, the learning of new terminology will bequickly accomplished.

PERSONNEL WHO WILL BEINVOLVED IN ROM

ROM will require functional users (Ship’sServiceman operators) at the organizational level.ROM is being developed with the intent ofhaving no impact on the manning of watchstations at various conditions of readiness. Also,ROM is not expected to alter current militaryduties of any kind for the military personnel con-cerned. ROM operators, or terminal users, neednot be computer experts as such, but will probablybe viewed as “customers” of one of the servicesthe SNAP system provides. The minimumknowledge and skills needed by basic operatorsare simply those required for the operators to gainaccess to the system, query the system for desiredoutputs, enter data to complete transactions asthey occur, and terminate access.

Since the ROM-related functions, procedures,and data are rate related for the most part, theuse of terminals is not expected to constitute amajor training problem. However, for the sakeof accountability, security restrictions will beplaced on the system. At present there are two

types of security associated with the ROMsystem: (1) physical and (2) application. Physicalsecurity is no more than keeping the computer inan area accessible only to the personnel with aneed to use the system. The ROM system isdedicated to management of the Ship’sServiceman records and should not be used byother rates. Space should be secured by lock andkey. Application security is based on the issuanceof passwords and user IDs for access to thesystem. You will only be able to make entriesinto the part of the system you have beenauthorized to use based on your password anduser ID. The basic organizational structure for theROM system includes the following positions:

Functional area supervisor (FAS)—Anofficer or senior petty officer designated to directand coordinate ROM operations. The functionalarea supervisor will be the principal advisor tothe command within the functional area ofapplication.

Users—Users are subdivided into twocategories and billets are designated, dependingupon the depth of knowledge required to supportthe function of the ship. The quantity, rate, andrating of the users will vary from ship class to shipclass. The two types of users are defined asfollows:

1. Journeyman users—Designated E-4sand above having the requirement to performlimited data and report generation with a func-tional area data base

2. Basic users—Designated E-1s andabove having the requirement to perform limiteddata entry and report generation associated witha functional area data base

The number of journeymen and basic userswill vary from ship class to ship class.

We are all aware of the manning problems wehave on ships, so be prepared to step up or downa level to perform wherever you are needed. TheROM system will allow the Ship’s Servicemanrating to go forward in our constant efforts tocontribute the most to our shipmates.

The information in this chapter has some ofthe basic advances the ROM system will offer andthe effects they will have to the present system.As soon as the system is on line, needed infor-mation and procedures will be made available toall concerned.

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APPENDIX I

DEFINITIONS OF SHIP’S STORE TERMS

ACCOUNTABILITY. Accountability is thepersonal obligation on the part of the ship’s storeofficer to render an accounting of ship’s storeproperty and funds.

ACCOUNTABLE OFFICER. The account-able officer is the ship’s store officer.

ACCOUNTING PERIOD. An accountingperiod is any period for which returns must besubmitted. It is normally a 4-month periodending 31 January, 31 May, and 30 September.

BONUS-FREE ITEMS. Bonus-free items arereceived from a vendor free of charge as a bonusfor placing an order.

BREAKBACK. A breakback is a transfer ofan item from a sales outlet back to the bulkstoreroom.

BREAKOUT. A breakout is a transfer ofmaterial from the bulk storeroom to a sales outletor service activity.

BULK SALE. A bulk sale is a sale made atcost to an activity authorized to buy in thismanner.

BULK SALESROOM. A bulk salesroom is aseparate cash sales unit established in a bulkstoreroom from which bulk sales are made.

BULK STOREROOM. A bulk storeroom isa main storage facility for all or part of the stockin a ship’s store operation. No sales are madefrom a bulk storeroom.

BULK STOREROOM CUSTODIAN. A bulkstoreroom custodian is a person in charge of abulk storeroom. In separate responsibility y opera-tions, the custodian is responsible for the stockby quantity on individual stock records.

CLOTHING ITEMS. Refer to Standard NavyClothing Items.

COMBINED RESPONSIBILITY OPERA-TION. A combined responsibility operation is aship’s store operation in which one person isresponsible for both a sales outlet and the bulkstoreroom that supplies that outlet.

COMPOSITE RECREATION FUND. Acomposite recreation fund is a fund in which aship without a ship’s store shares in the profitsof the supporting ship’s store. For example, anSSN/SSBN supported by an AS receives a shareof the ship’s store profits from the AS to be usedas the SSN/SSBN’s recreation fund.

COST ITEM. A cost item is an item of ship’sstore stock carried for ultimate issue as cost ofoperations and cost of sales.

COST OF OPERATIONS ISSUE. A cost ofoperations issue is an expenditure of stock forultimate consumption in a ship’s store activity.

COST OF OPERATIONS ITEMS. Cost ofoperations items are cost items carried for ultimateissue to ship’s store activities and for which cashis not ultimately received.

COST PRICE. A cost price of an item is theprice at which an item is received from thesupplier. Standard Navy clothing is sold andissued at cost price. Cost of operations items areissued at cost price.

COST OF SALES ITEMS. Cost of sales itemsare cost items carried for issue to a sales outlet.Cash is ultimately received for cost of sales items.They differ from retail items in that further pro-cessing is required before sale.

CREDIT MEMORANDUM. A credit memo-randum is a document received from a vendorwhich gives credit to a ship for merchandisereturned to the vendor.

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CUSTODIAN (RESPONSIBLE CUSTO-DIAN). A custodian (responsible custodian) is aperson held responsible for the operation of aship’s store activity and strict custody of thematerial used in it.

DELIVERY ORDER. A delivery order is anorder for material under an existing indefinitedelivery contract. An item ordered from the Ship’sStore Contract Bulletin is procured via a deliveryorder.

EMBLEMATIC ITEMS. Emblematic itemsare items bearing the ship’s identification (suchas ball caps, belt buckles, T-shirts, lighters, mugs,etc.). Since these items have the ship’s identifica-tion on them, they have no sales potential foranother ship. Procurement therefore must not ex-ceed 90 days’ anticipated sales.

EXCESS PROFITS. Excess profits are pro-fits that exceed the maximum allowed 15% of thecost of retail sales.

EXCESS STOCK. Excess stock is the materialby line item that exceeds the maximum allowed90-day inventory level.

EXPENDITURE. An expenditure is theremoval of stock from the accountability of aship’s store officer.

FAST PAY PROCEDURES. Fast pay pro-cedures are designed to expedite payment to thevendor for material that has been delivered to acommon carrier, post office, or other means topoint of first receipt by the government. Thevendor agrees to replace, repair, or correctmaterial not received at the first specified destina-tion, damaged in shipping, or not conforming tothe specifications of the order.

F.O.B. Free on Board, or Freight on Board.

F.O.B. DESTINATION. F.O.B. Destinationon a purchase order or contract indicates thevendor will pay all transportation costs formaterial sent to the ship. All material orderedfrom the Ship’s Store Contract Bulletin willspecify F.O.B. Destination.

F.O.B. ORIGIN. F.O.B. Origin on a purchaseorder or contract indicates the ship will pay alltransportation costs for material received.

F.O.B. OTHER. F.O.B. Other on a purchaseorder or contract indicates the ship will pay thetransportation costs for material received.

F.O.B. SHIPPING POINT. Same as F.O.B.Origin.

FOUNTAIN. See Snack Bar.

GROUP SALE. A group sale is a sale ofmerchandise to a group in which several individualorders have been consolidated. A group sale ismade when individual sales to personnel cannotbe made.

GUARANTEED SALES ITEMS. Guaran-teed sales items are items that may be returnedto a vendor for replacement, credit, or cash re-fund when they are shopworn, defective, or outof season.

HEALTH AND COMFORT ISSUES. Ahealth and comfort issue provides toilet goods,tobacco, clothing items, and other necessitiesrequired for the health and well-being of person-nel without sufficient funds to purchase them.

HIGH LIMIT. A high limit is the maximumquantity of material to be maintained on hand andon order to sustain current operations. It includesthe sum of stocks represented by the operatinglevel, the safety level, and the order andshipping time. (Equivalent to requisitioningobjective.)

INTRASTORE TRANSFER. An intrastoretransfer is a movement of stock from the respon-sibility of one custodian to that of another.

INVOICE. An invoice is an itemized list ofmaterial or services rendered or received, in-cluding quantities, prices, etc.

INVOLUNTARY PRICE CHANGES. In-voluntary price changes are price changes that arebeyond the control of the ship’s store officer.They include standard price adjustments and pur-chase variances on Navy clothing.

ISSUE. An issue is an expenditure of stockfor some further purpose. Issues reduce ac-countability.

ISSUE FOR USE. See Cost of OperationsIssue.

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LIQUIDATION. A liquidation is a settlementof the amount of an account.

LOW LIMIT. Low limit is the stock positionthat signals the need to initiate replenishmentaction. It includes the sum of stocks representedby the safety level and the order and shippingtime. (Equivalent to reorder point.)

MARKDOWN. A markdown is a voluntaryreduction in the selling price of an item. Thereare three types of markdowns: markdowns belowcost, markdowns to zero, and retail markdowns.

MARKDOWN BELOW COST. A markdownbelow cost is a voluntary reduction in the sellingprice of an item below its original cost value.

MARKDOWN TO COST. A markdown tocost is a type of retail markdown in which the sell-ing price of an item is reduced so that it is equalto its cost price.

MARKDOWN TO ZERO. A markdown tozero is an expenditure of stock through a pricechange that reduces the value of the item tozero.

MARKON. A markon is any voluntary in-crease in the selling price of an item.

MARKUP. A markup is the difference be-tween the cost price and selling price of a retailitem.

OPERATING LEVEL. An operating level isthe quantity of material (exclusive of safety level)required to sustain operations during the intervalbetween successive requisitions. Normally, it is thedifference in the quantity between the requisi-tioning objective (high limit) and the reorder point(low limit).

ORDER AND SHIPPING TIME. Order andshipping time is the time elapsing between the sub-mittal of a requisition and the receipt of thematerial. (Equivalent to procurement lead time. )

OVERRING. An overring is when an incor-rect higher price for an item is rung up on a cashregister.

PROFIT. A profit is the amount of money re-maining after all expenses and costs have beenpaid.

PURCHASE ORDER. A purchase order is anorder for material which also establishes a one-time contract. An item ordered from the Ship’sStore Afloat Catalog is procured via a purchaseorder.

PURCHASE VARIANCE. A purchasevariance is a difference between standard priceand purchase price occurring when a ship’s storeis receiving Navy clothing from a commercialsupplier. A purchase variance is an involuntaryprice change.

RECEIPT. A receipt is the acceptance of thequantity and quality of material for accountabilitypurposes.

RECORDSKEEPER. A recordskeeper is aperson in charge of keeping ship’s store records.

REFUND. A refund is cash given back to acustomer in exchange for merchandise that waspreviously brought from a sales activity.

REORDER POINT. A reorder point is thestock position that signals the need to initiatereplenishment action. It includes the sum of stocksrepresented by the safety level and the order andshipping time. (Equivalent to low limit.)

REQUISITION. A requisition is an order formaterial from a government source (for example,other supply officers including another ship’sstore or shore supply support activity).

REQUISITIONING OBJECTIVE. A requisi-tioning objective is the maximum quantity ofmaterial to be maintained on hand and on orderto sustain current operations. It includes the sumof stocks represented by operating level, safetylevel, and order and shipping time. (Equivalentto high limit.)

RESALE ACTIVITY. A resale activity is asales outlet.

RESPONSIBILITY. Responsibility is theobligation to exercise care, custody, and protec-tion of ship’s store money and materials.

RETAIL ITEM. A retail item is any item soldin its original form in exchange for cash.

RETAIL MARKDOWN. A retail markdownis a voluntary price reduction in the retail priceof an item to a price above or equal to its originalcost price.

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RETAIL PRICE. A retail price is the price atwhich an item other than standard Navy clothingand cost of operations items are sold or issued.

RETAIL STORE. A retail store is a salesoutlet where retail items are sold.

RETAIL STORE OPERATOR. A retail storeoperator is the person in charge of a retail store.For combined responsibility operations, it alsorefers to the custodian of a retail store and thebulk storeroom that provides supplies for thatstore.

REVALUATION BY SURVEY. Revaluationby survey is a procedure for lowering the priceof an item by a survey of money value only.

SAFETY LEVEL, The safety level is thequantity of material, in addition to the operatinglevel, required to be on hand to permit continuousoperations in the event of interruption of normalreplenishment or unpredictable fluctuations in theissue demand.

SALE. A sale is any expenditure of stock forwhich cash is received. Accountability is un-changed by a sale.

SALES OUTLETS. Sales outlets are retailstores, vending machines, amusement machines,and standard Navy clothing stores.

SEPARATE RESPONSIBILITY OPERA-TION. A separate responsibility operation inwhich two or more persons are responsible for theoperation of a sales activity and the bulkstoreroom that supplies that activity.

SERVICE ACTIVITY. A service activity is aship’s store facility that renders a service. Thebarbershop, laundry, dry-cleaning plant, andtailor shop are service activities.

SHIP’S STORE. A ship’s store consists of thesales outlets and services activities on board a ship.

SHIP’S STORE AFLOAT CATALOG. TheShip’s Store Afloat Catalog (SSAC) containsluxury and semiluxury type of items. It ispublished and maintained by NAVRESSO.

SHIP’S STORE CONTRACT BULLETIN.The Ship’s Store Contract Bulletin contains basicstaple-type items required to support needs of the

crew. It is published and maintained byNAVRESSO.

SHIP’S STORE OFFICER. The ship’s storeofficer is the officer in charge of the ship’s storeoperations aboard a ship. The ship’s store officeris the accountable officer.

SNACK BAR. A snack bar is a sales outletwhere ice cream products, drinks, and retail snackitems (such as candy and cookies) are sold.

SNACK BAR OPERATOR. A snack baroperator is the person in charge of the snack bar.

SPECIAL ORDER. A special order is the pro-curement and sale of a retail item to a specifiedindividual who has ordered the item. The item issold through a retail store, but is not carried asstock .

STANDARD NAVY CLOTHING ITEMS.Standard Navy clothing items are items authorizedin the Navy Clothing Price List for Men andWomen (NAVRESSO Pub 90).

STANDARD PRICE. A standard price is theprice at which an item of Navy clothing is boughtand sold.

STANDARD PRICE ADJUSTMENT. Astandard price adjustment is an involuntary pricechange on stocked standard Navy clothingresulting from a change in standard pricesprescribed in the Navy Clothing Price List forMen and Women (NAVRESSO Pub 90).

STOCK TURN. Stock turn is the movementof stock through the ship’s store operation. Stockis moved by its being expended from the ship’sstore through sales, markdowns below cost,markdowns to zero, transfers, issues (except issuesto use), and surveys (except surveys to the NavyStock Fund). A stock turn of 1.33 per account-ing period is required. This will result in four stockturns per year.

STOCKAGE OBJECTIVE. A stockage objec-tive is the maximum quantity of material to bemaintained on hand to sustain current operations.It includes the sum of stocks represented by theoperating level and the safety level.

SURVEY. A survey is an expenditure of stockfor immediate disposal. Surveys reduce ac-countability.

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TRANSFER. A transfer is the movement ofstock from the accountability of one ship’s storeofficer to that of another.

TRANSMITTAL. A transmittal is a group ofdocuments or records sent to another naval ac-tivity for information or action.

VENDING MACHINE. A vending machineis a sales outlet where canned or cup-type drinks,

candy, cookies, cigarettes, and other retail itemsare sold.

VENDING MACHINE CUSTODIAN. Avending machine custodian is the person in chargeof the vending machine operation.

VISUAL MERCHANDISING. Visual mer-chandising is the display of merchandise in ship’sstore activities. Rotation and arrangement ofstock, lighting, and signing help increase sale-ability.

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APPENDIX II

SUGGESTED SUPPLY MANAGEMENTINSPECTION CHECK-OFF LIST

SHIP’S STORE OPERATION

GENERAL

1. Are ship’s store spaces locked securely when unattended?

2. Have written orders, containing all required data, beenissued for the operation of the ship’s store functions?

3. Are personnel concerned aware of the written orders andare they familiar with their instructions?

4. Are the duties of keeping office records assigned to astorekeeper who is not in charge of other ship’s storefunctions?

5. Are the necessary printed forms available and are therequired records and files maintained?

6. Which of the following services are offered: foun-tain , laundry , vending machines ,barber , tailor dry cleaning ?,

7. Are prices, terms, etc., contained in the Ship’s StoreAfloat Catalogs divulged to vendors, their representatives,or other unauthorized personnel?

8. Are files of signed inventories, receipt papers, andbreakout and issue requests which furnish evidence of theresponsibility of custodians for stock in their custody keptunder lock by the ship’s store officer or designated officerassistant?

9. Are there any outstanding requests for checkage on hand?If so, has follow-up action been taken to charge these to payrecords?

10. Are all entries made in ink, in indelible pencil, or by useof a typewriter?

11. Are only authorized articles stocked for resale or use inthe store?

12. Does the cost of any specific item, such as stereos ornecklaces, exceed the monetary limitations?

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13. Are the special instructions relating to tax-free beer andtobacco products complied with?

14. Is the value of ship’s store stock within the prescribedlimitations?

15. Is the Stock Record (NAVSUP 464) prepared and main-tained for each item of ship’s store stock?

16. Is a monthly supply demand review conducted toidentify monthly surplus, dead, or slow-moving stock?

17. Are there any items of stock on board which are fit forresale condition and satisfactory for release but in excess ofnormal requirements? If so, what action has been taken todispose of the excess?

PROCUREMENT

18. Is shop’s store stock procured in accordance with pro-cedures outlined in NAVSUP P-487?

19. Are requisitions submitted on DOD Single Line ItemRequisition System Document (Manual) (DD 1348) or Requisi-tions and Invoice/Shipping Document (DD 1149)?

20. Is the Order for Supplies or Services/Request for Quota-tions (DD 1155) used for placing purchase orders and deliveryorders under contract?

21. Do purchase orders exceed $10,000 limitation per order?

22. Are standard Navy clothing items sold at standard pricesas issued by the Navy Clothing Price List for Men and Women(NAVRESSO P-90)?

23. Is only general stores material considered to be in thecategory “Hardware, Hobby Shop Materials, and Supplies”transferred to the ship’s store for resale of the hobby shopunder the conditions specified?

24. Is the procurement of minor equipment limited to thoseitems the unit cost of which does not exceed $100?

25. Is carbon dioxide gas charged as a cost of sales forvending machine operations?

26. Is the cost of gas cylinders expended as a cost ofvending machine operations?

27. Are proper written agreements in effect for leasedvending machines which have been installed?

28. Are daily deliveries of vending machine supplies processedin accordance with regulations set forth in NAVSUP P-487?

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29. Are laundry and dry cleaning services procured in accord-ance with NAVSUP P-487?

30. Is the Ship’s Store Afloat Catalog maintained in acurrent status?

RECEIPT AND INSPECTION

31. When stock is received, is it assembled on deck, checkedagainst papers, any broken cases securely sealed, andsafeguarded while being struck below?

32. Is stock received from other supply officers inspected forquantity by the ship’s store officer or by an authorizedinspector?

33. Is stock received from purchase or other governmentsources other than supply officers inspected for quantity andquality by the ship’s store officer or by an authorizedinspector?

34. Is material safeguarded by requesting the officer of theday to post petty officers in suitable locations until stores aresecured in locked spaces?

35. After verification, does the person responsible thereforeacknowledge receipt and custody by signature on the ap-plicable receipt documents?

36. When material is received without invoices, are dummyinvoices prepared?

37. When dealer’s bills are not received, is follow-up actiontaken to obtain same and process for payment?

38. Are erroneously prepared receipt documents processedproperly?

39. Are receipt documents posted to the Journal of Receipts(NAVSUP 9787) and Stock Record (NAVSUP 464)?

40. Are price adjustments processed as prescribed byNAVSUP P-487?

41. When material purchased is delivered directly to the shipand fast pay procedures do not apply, are dealers’ billscertified and forwarded promptly to the applicable payingactivity?

STOWAGE, BREAKOUTS, AND TRANSFERS

42. Is stock arranged and stowed as prescribed by NAVSUPP-487?

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43. Is movement of stock from bulk storerooms controlledby properly prepared and approved Intra-store Transfer Data(NAVSUP 973) forms?

44. Are stocks issued on a first-in, first-out basis?

EXPENDITURES

45. Are surveys of ship’s store stock properly processed?

46. Do surveys of merchandise carried in the retail store showretail extensions on the Report of Survey (DD 200)?

47. Are transfers of stock handled properly?

48. Are issues of stock handled properly?

49. Are the Retail Price Changesmarkdowns signed and authorizedbefore sale?

PROFITS

(NAVSUP 983) coveringby the ship’s store officer

50. Has the net profit during an accountable period exceeded15% of the cost of retail sales?

51. Has the store operated at a profit since the last annualsupply department inspection?

52. Have any surveys been charged to Ship’s Stores Profits,Navy, General Fund, without approval of Navy Resale andServices Support Office?

53. Are claims for loss or damage to personal wearing ap-parel properly prepared and handled?

SALESROOM AND SALES PROCEDURE

54. Are the hours of operation prescribed by the com-manding officer posted prominently?

55. Is the condition of the salesroom, stowage, and displayof merchandise satisfactory?

56. Is an up-to-date price list available for use by the storeoperator for verification of prices?

57. Does the price list contain the statement regarding limita-tions on purchases by authorized patrons?

58. If the cash register does not furnish the patron with alist of charges for the items purchased, itemized and totaled,does it provide him with a clear view of the registration ofthe amount of the purchase?

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59. Is the change fund amount stipulated in writing by thecommanding officer?

60. Are cash collection procedures followed by personnelauthorized to make collections?

61. Is the Cash Receipt Book (NAVSUP 470) properly main-tained and in possession of the resale outlet operator?

62. Is the Cash Register Record (NAVSUP 469) properlymaintained in custody of the person making cash collections?

63. Is the Cash Register Record in agreement with the CashReceipt Book?

64. If the cash registers are equipped for tape use, are thetapes retained as part of the ship’s store retained returns?

65. Are selling prices individually marked on ship’s storemerchandise?

66. Does the retail store carry all items on the current list ofbasic items approved by the ship’s store officer for ready saleto the crew?

67. Are the hours of operation for service activities postedprominently?

68. Are safety precautions posted near each machine?

69. Are sanitary regulations, approved by the senior memberof the medical department, prominently posted in all serviceactivities?

70. Does the ship’s store officer inspect all service activitiesat least once each business day?

71. Are adequate records maintained to control the opera-tion of the laundry?

72. Are special jobs for favored personnel prohibited in thelaundry?

73. In the barbershop are luxury services which cannot berendered to all personnel prohibited?

74. In the operation of the fountain is the objective ofservice to the maximum number of personnel adhered to withthe variety of items restricted as necessary?

75. Are adequate fountain cost controls established?

76. Are the multiple operator procedures followed whennecessary?

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77. Are adequate cash-handling procedures in effect?

78. Are tailor shop records adequate to be used in connec-tion with claims for lost articles as a production record?

79. Is an adequate vending machine cost control established?Are separate Vending Machine Control Records (NAVSUP236) maintained for each drink vending machine?

80. Is the handling of cash from sales in vending machinessatisfactory?

81. Determine whether or not the officers and enlisted menconsider the service activities to be rendering efficient andcourteous service.

RETURNS

82. Is the set of retained returns for the previous accountingperiod complete?

83. Was the Ship’s Store Balance Sheet and Profit and LossStatement (NAVCOMPT 153) properly prepared andrendered on time?

84. Are inventories recorded in ink or indelible pencil onShip’s Store Inventory Count Sheets (NAVSUP 238)?

85. Are inventories taken and certified by authorized person-nel at the times required?

86. Are the Journal of Receipts (NAVSUP 977) andJournal of Expenditures (NAVSUP 978) properly main-tained and closed out?

87. Are the stock records properly closed out?

88. Is the Financial Control Record (NAVSUP 235) properlymaintained and closed out?

MOST COMMON SMI DISCREPANCIES

1. Funds in excess of $50 were left in the cash register overnight.

2. The Cash Register Record was not properly closed and balanced at theend of each month.

3. Cash register overages and shortages of $1 or more were not investigatedand explained.

4. The original of the inventory was not placed under lock and key by theship’s store officer immediately upon completion of the closeout procedure.

5. The ship’s store officer’s original rough inventory was not verified withthe office records storekeeper’s working copy.

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6. The Inventory Control Record was not up-to-date.

7. Boxes or containers of stock were not marked with month and year ofreceipt before stowage.

8. Receipts and expenditures were not promptly and accurately posted tothe Ship’s Store Afloat Financial Control Record.

9. Surveys of stock were not indicated on the Ship’s Store OperatingStatement.

10. Actual quantities of tax-free cigarettes on hand did not agree with thequantities recorded in the tax-free cigarette log.

11. Surveys were charged to the wrong appropriation.

12. Combinations of locks to ship’s store spaces were not kept in sealedopaque envelopes and retained under lock and key by the supply officer.

13. Navy clothing items were not sold at standard price.

14. Unit cost prices were not properly determined (by rounding off the costprice of the last receipt to the nearest cent).

15. All signed receipt documents were not placed in the Accountability File.

16. The regulations concerning authorized patrons and the limitations on pur-chases by authorized patrons were not posted.

17. The prices indicated on the stock records did not agree with actual pricesof the items in the store.

18. A 1.33 to 1 stock turn had not been achieved during the accounting periodbefore the inspection.

19. Emergency access instructions were not posted outside all storerooms.

20. Sanitation instructions were not posted inside the store, fountain, barbershop, or on the vending machine.

21. A vending machine control record was not being maintained or was main-ta ined improper ly .

22. Vending machine cash had not been collected and counted daily or beforeany repairs.

23. Safety devices in the laundry were inoperative.

24. Opening Inventory caption on the NAVCOMPT Form 153 was not inexact agreement with the Closing Inventory caption on the last returns.

25. Individual amounts on the returns’ adding machine tapes were not inexact agreement with the individual documents attached to the tapes.

26. Retained returns were not arranged in the identical manner as the originalreturns.

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STANDARDS OF CONDUCT

Section I: GENERAL

This section of the appendix is published to emphasize the requirementthat all ship’s store personnel adhere to the Standards of Conduct containedin DOD Directive 5500.7 and SECNAVINST 5370.2 and to include the NavalSupply Systems Command Policy statement on loss prevention controls.

Section II: STANDARDS OF CONDUCT

1. DISCUSSION

a. All ship’s store personnel must observe the highest ethical standards intheir relations with vendors in compliance with the Department of DefenseStandards of Conduct as described below. Ship’s store personnel will ensurethat the management policies directing equal treatment to vendors andsuppliers in all areas of store operations are adhered to in all cases. Theacceptance of gratuities, gifts, prizes, luncheons or similar hospitality, or thegiving of preferential treatment to vendors’ products with respect to procure-ment, distribution, stocking, display, or resale is strictly prohibited. All ship’sstore personnel and vendors must be made aware of this prohibition.

b. All ship’s store personnel must be continually aware that their actionsand decisions are properly subject to the scrutiny of people both in and outof the government. Even though an actual conflict of interest may not exist,all personnel must avoid the appearance of such conflict from a public pointof view.

c. Private hospitality between friends may be inappropriate when one isa contractor’s representative and the other is a representative of the commandbefore which an official matter involving the contractor is pending or mightbe expected to arise.

2. POLICY

a. In accordance with the guidance in par. 1, the following policy isestablished for all ship’s store operations:

(1) Ship’s store personnel are subject to disciplinary action and in someinstances, criminal prosecution if they solicit, accept, or agree to acceptgratuities, in any form, from vendors, suppliers, or anyone else with whomthe ship’s stores do business, either directly or indirectly.

(2) Ship’s store personnel will not, under any circumstances, givepreferential treatment to vendors, suppliers, or anyone else in any area,including procurement, distribution, stocking, display, or resale of products.

3. ACTION

a. The Navy Resale and Services Support has:

(1) advised all Ship’s Store Afloat Catalog vendors and all contractorsdoing business with ship’s stores of the policy and prohibitions contained here;and

(2) prepared and issued, under separate cover, signs for display in allship’s stores to advise and remind personnel and vendors of this policy.

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b. Ship’s store officers will(1) review the DOD Standards of Conduct with all ship’s store

personnel on a semiannual basis;(2) remind local vendors and suppliers of the policy and prohibitions

contained here; and(3) ensure that signs received from the Navy Resale and Services

Support Office are conspicuously displayed in the ship’s store office and otherappropriate areas for observance by all ship’s store personnel and vendors.

Extracts from the Department of the Navy’s Standards of Conduct fromSECNAVINST 5370.2 are quoted below:

1. Purpose. This instruction implements and supplements DOD Direc-tive 5500.7 of 15 Jan 1977, Standards of Conduct in prescribing requiredstandards of ethical conduct governing all personnel of the Department ofthe Navy; related requirements applicable to all personnel in interpreting andexecuting the standards of conduct and related requirements; and respon-sibilities and procedures for monitoring and enforcing compliance with thestandards of conduct and related requirements within the Department of theNavy.

2. (not quoted)3. Scope and Effect

a. Applicability. The provisions of this instruction apply to all navalpersonnel as defined in subparagraph 4a. The provisions of subparagraph6.1(2) apply to all retired naval personnel and members of reserve components.The provisions of paragraph 12 also apply to all retired regular officers.

b. Violations. The regulations prescribed in paragraph 6 of thisinstruction are a general order upon which disciplinary or punitive proceedingsmay be based in appropriate cases. Noncompliance with other provisions ofthis instruction are expected to be corrected by timely and appropriate ad-ministrative measures.

4. Definitionsa. Naval personnel. All civilian officers and employees and all active

duty military personnel of the Department of the Navy, including specialgovernment employees and personnel of nonappropriated fundinstrumentalities.

b. (not quoted)c. (not quoted)d. Gratuity. Any gift, favor, entertainment, hospitality, transportation,

loan, any other tangible item, and any intangible benefit, for example, dis-counts, passes, and promotional vendor training—given or extended to, oron behalf of, naval personnel or their spouses, minor children, or households,for which fair market value is not paid by the recipient or the U.S. government.

e. Appropriate supervisor. That superior within the chain of authoritywho is acquainted with the duties of the naval personnel concerned and canbest determine the existence and effect of any conflict of interests of suchpersonnel. Ordinarily, this will be the immediate superior of the person con-cerned. Each commanding officer or activity head should ensure that all per-sonnel are aware of the identity of their appropriate supervisor.

5. General policies governing the conduct of naval personnela. Proper conduct of official activities.

(1) Naval personnel must become familiar with the scope ofauthority for, and the limitations concerning, the activities for which theyhave responsibilities.

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(2) The attention of naval personnel is directed to the statutoryprohibitions which apply to the conduct of naval personnel.

(3) Naval personnel must not make or recommend any expenditureof funds or take or recommend any action known or believed to be in viola-tion of U.S. laws, executive orders, or applicable directives, instructions, orregulations.

(4) In cases of doubt of the propriety of a proposed action ordecision in terms of regulation or law, naval personnel must consult legalcounsel or, if appropriate, a Standards of Conduct counselor or deputycounselor to ensure the proper and lawful conduct of naval programs andactivities.

b. Conduct prejudicial to the government. Naval personnel mustavoid any action, whether or not specifically prohibited by this instruction,which might result in or reasonably be expected to create the appearance of

(1) using public office for private gains,(2) giving preferential treatment to any person or entity,(3) impeding government efficiency or economy,(4) losing complete independence or impartiality,(5) making a government decision outside official channels, or(6) adversely affecting the confidence of the public in the integrity

of the government.c. Standards of personal judgment. All naval personnel will adhere

strictly to the Standards of Conduct and related requirements prescribed inthis instruction. In some instances, standards are imposed which require theexercise of personal judgment. Naval personnel must consider each suchinstance carefully and be prepared to account for the manner in which thejudgment is exercised. This is particularly true in situations which involveacceptance of hospitality or favors from persons or entities who do, or seekto do, business with the Department of Defense.

d. Dealings with business and industry representatives. Persons whorepresent the government in business dealings with representatives of industryhave positions of trust and grave responsibility which require them to observethe highest ethical standards. Practices which may be accepted in the privatebusiness world are not necessarily acceptable for naval personnel. No personwill allow himself to be placed in a position in which a conflict of interestmight arise or might justifiably be suspected. Such a conflict of interest mayarise or appear to arise by reason of the acceptance of gratuities, or by anyother action which could influence or reasonably be interpreted as influenc-ing the strict impartiality that must prevail in all business relationshipsinvolving the government. Strict impartiality is often particularly difficult tomaintain when business relationships are allowed to become overly personal.Naval personnel should at all times ensure that persons doing business or at-tempting to do business with the Department of Defense, or representing suchentities, are not permitted to ingratiate themselves to the extent that navalpersonnel hesitate to deny requests for special treatment made by suchpersons or otherwise to follow the rule of strict impartiality when dealing withsuch persons in their official capacities. Acceptance of gratuities (no matterhow innocently tendered or received) from those who have or seek businessdealings with the Department of the Navy maybe a source of embarrassmentto the department and to the naval personnel involved, may affect theobjective judgment of the recipient, and may impair public confidence in theintegrity of business relations between the department and industry. It isemphasized that prohibited conflicts and apparent conflicts of interests cansometimes arise even from relationships and transactions which thepersonnel concerned perceive as inconsequential. Where there is doubt as to

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the propriety of accepting gratuities, attending functions, or accepting otherinvitations of a hospitable nature, naval personnel will refrain therefrom.

e. Preferential treatment. Special treatment must not be accorded toparticular individuals or firms unless equivalent treatment is also accordedto other individuals or firms justifiably entitled hereto.

f. Acquiring conflicting financial interests. Notwithstanding the factthat they may have filed confidential statements of affiliations and financialinterests (DD Form 1555), naval personnel must at all times avoid acquiringor retaining financial interest which could disqualify them from performingtheir assigned duties or responsibilities. Some of the more likely situationsin which conflicts of interests might arise are where naval personnel havegovernment duties or responsibilities related to business entities—

(1) with which they, or their spouses, minor children, or householdmembers are associated as employees, officers, owners, directors, members,trustees, partners, advisors, or consultants,

(2) with which they, or their spouses, minor children, or householdmembers are negotiating or have arrangements for prospective employment, or

(3) in which they, or their spouses, minor children, or householdmembers have interests through ownership of stock options, bonds, securitiesor other financial arrangements, such as trusts, or through participation inpension or retirement plans.

g. Membership in associations. Naval personnel who are members orofficers of nongovernmental associations or organizations must avoid activitieson behalf of the association or organization that are incompatible with theirofficial government positions. SECNAVINST 5760.4 sets forth the Depart-ment of the Navy policy regarding participation by naval activities and navalpersonnel in the activities of private associations.

h. Equal opportunity. Naval personnel must scrupulously adhere tothe DOD program of equal opportunity regardless of race, color, religion,sex, age, or national origin in accordance with equal opportunity directives.See, for example, SECNAVINST 5350.10.

i. Reporting suspected violations. Naval personnel who have informa-tion which causes them to believe the other DOD personnel have violated astatute or standard of conduct imposed by this instruction should bring thematter to the attention of the appropriate command authority. The matterthereafter should be brought to the attention of the person concerned, forpossible resolution without further command action, unless the commanddetermines that such communication is not likely to remedy the problem orwill adversely affect a proper investigation of the matter.

j. Resolving violations. The resolution of Standards of Conductviolations must be accomplished promptly by one or more measures, suchas divestiture of conflicting interests, disqualification for particularassignments, changes in assigned duties, termination, or other appropriateaction, as provided by statute or administrative procedures. Disciplinaryactions must be in accordance with established personnel procedures. See par.6a following.

6. Regulations governing the conduct of naval personnel

a. Affiliations and financial interests, Naval personnel must notengage in any personal, business, or professional activity, or receive or retainany direct or indirect financial interest, which places them in a position ofconflict between their private interests and the public interests of the UnitedStates related to the duties or responsibilities of their official positions. For

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the purpose of this prohibition, the private interests of a spouse, minor child,and any household member are treated as private interests of the navalpersonnel.

(1) Unless otherwise expressly authorized by action taken under 18USC 208(b), all naval personnel who have or acquire an affiliation or a finan-cial interest which creates a conflict or appearance of a conflict with theirofficial duties must report the possibly disqualifying interest to the appropriatesupervisor and immediate subordinates. If the individual cannot adequatelyperform his official duties after such disqualification, he must divest himselfof such involvement or be removed from that position.

(2) Naval personnel need not disqualify themselves under thissection, however, for holding shares of a widely held, diversified mutual fundor regulated investment company. Such holdings are exempted as being tooremote or inconsequential to affect the integrity of the services of govern-ment personnel.

b. Using inside information. Naval personnel must not use, directlyor indirectly, inside information to further a private gain for themselves orothers if that information is not generally available to the public and wasobtained by reason of their DOD positions.

c. Using naval position. Naval personnel are prohibited from usingtheir official positions to induce, coerce, or in any manner unlawfully influenceany person, including subordinates, to provide any benefit, financial or other-wise, to themselves or others.

d. Dealing with present and former military and civilian personnel.Naval personnel must not knowingly deal on behalf of the government withpresent or former government personnel, military or civilian, whose participa-tion in the transaction would be in violation of a statute, regulation, or policyset forth in this instruction. While all applicable prohibitions are within theprohibition established by this subparagraph, attention is directed to the pro-hibition on retired regular officers selling to the government through the depart-ment in which they hold a retired status, 18 USC 281; the prohibition on formerpersonnel acting as an agent or attorney for anyone other than the UnitedStates in connection with “claims” against the government, 18 USC 207; andthe prohibition on paying appropriated funds to retired regular officers whoare selling to certain government agencies, 37 USC 801(c).

e. Commercial soliciting by naval personnel. To eliminate theappearance of coercion, intimidation, or pressure from rank, grade, or posi-tion, full-time naval personnel, except special government employees andReserve enlisted personnel on active duty for training, are prohibited frommaking personal commercial solicitations or sales to DOD personnel who arejunior in rank or grade, at any time, on or off duty.

(1) This limitation includes, but is not limited to, the solicitationand sale of insurance, stocks, mutual funds, real estate, and any other com-modities, goods, or services.

(2) This prohibition is not applicable to the one-time sale by anindividual of his own personal property or privately owned dwelling, or tothe off-duty employment of naval personnel as employees in retail stores orother situations not including solicited sales.

(3) With regard to solicitation by and of civilian personnel,the limitation applies only to solicitation of personnel under the supervision,at any level, of the solicitor.

f. Assignment of Reserve personnel for training. Naval personnelwho are responsible for assigning Reserves for training must not assign themto duties in which they will obtain information that could be used by them

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or their private sector employers to gain unfair advantage over civiliancompetitors.

g. Gratuities.(1) Except as provided in subparagraph 6g(2) below, naval personnel

and their spouses, minor children, and members of their households mustnot solicit, accept, or agree to accept any gratuity for themselves, membersof their families, or others, either directly or indirectly from, or on behalfof, a defense contractor. A defense contractor is a person or other entity which

(a) is engaged in or seeks business or financial relations of anysort with any DOD component,

(b) conducts operations or activities that are either regulatedby a DOD component or significantly affected by DOD decisions, or

(c) has interests that may be substantially affected by theperformance of the official duties of DOD personnel.

(2) This general prohibition does not apply to the following:(a) The continued participation in employee welfare or

benefit plans of a former employee when permitted by law and approved bythe appropriate Standards of Conduct counselor;

(b) The acceptance of unsolicited advertising or promotionalitems that are less than $5 in retail value;

(c) Trophies, entertainment, prizes, or awards for publicservice or achievement or given in games or contests which are clearly opento the public or which are officially approved for naval personnel participation;

(d) Things available to the public (such as university scholarshipscovered by DOD Directive 1322.6 and free exhibitions by Defense con-tractors at public trade fairs);

(e) Discounts or concessions extended Navy and MarineCorps-wide and realistically available to all naval personnel;

(f) Participation by naval personnel in civic and communityactivities when the involvement of Defense contractors is remote from thebusiness purposes of any contractor who is sponsoring, supporting, orparticipating in the activity (for example, participation in a little league orCombined Federal Campaign luncheon which is subsidized by a Defensecontractor);

(g) Social activities engaged in by officers in commandand other naval officials, or their representatives, with local civic leaders aspart of community relations programs of the Department of the Navy inaccordance with SECNAVINST 5720.44;

(h) The participation of naval personnel in widely attendedgatherings of mutual interest to government and industry, sponsored or hostedby industrial, technical, and professional associations (not by individual con-tractors), provided that they have been approved in accordance with DODInstruction 5410.20;

(i) Situations in which participation by naval personnelat public ceremonial activities of mutual interest to industry or local com-munities and the Department of the Navy serves the interest of the govern-ment and acceptance of the invitation is approved by the commandingofficer or other head of the activity to which the invited is attached;

(j) Contractor provided transportation, meals, or overnightaccommodations in connection with official business when arrangements forgovernment or commercial transportation, meals, or accommodations areclearly impractical and the individual reports the circumstances in writing tohis appropriate supervisor as soon as possible;

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(k) Attendance at promotional vendor training sessions whenthe vendor’s products or system are provided under contract to DOD andthe training is to facilitate the utilization of those products or systems by navalpersonnel;

(l) Attendance or participation of naval personnel in gather-ings, including social events such as receptions, which are hosted by foreigngovernments or international organizations, provided that the acceptance ofthe invitation is approved by the commanding officer or other head of theactivity to which the invitee is attached or, when there is doubt as to thepropriety of acceptance, by higher authority (see SECNAVINST 1650.1 forfurther information pertaining to fits from foreign governments);

(m) Customary exchanges of gratuities between naval personneland their friends and relatives or the friends and relatives of their spouses,minor children, or members of their household where the circumstances makeit clear that it is that relationship rather than the business of the persons con-cerned which is the motivating factor for the gratuity and where it is clearthat the gratuity is not paid for by any entity described in subparagraph 6g(1)above; and

(n) Situations in which, in the sound judgment of theindividual concerned or his superior, the government’s interest will be servedby naval personnel participating in activities otherwise prohibited. In any suchcase, a written report of the circumstances must be made by the individualor his appropriate superior in advance of acceptance, or, when an advancereport is not possible, within 48 hours after acceptance, to the appropriatesupervisor, if he is not otherwise aware of the acceptance, and to theappropriate Standards of Conduct counselor or deputy counselor.

(3) Naval personnel who receive gratuities, or have gratuitiesreceived for them in circumstances not in conformance with the standardsof this section, must promptly report the circumstances to the appropriatesupervisor for a determination as to the proper disposition. The appropriatesupervisor must consult with the Standards of Conduct counselor or deputycounselor.

(4) Procedures with respect to ROTC staff members are setforth in DOD Directive 1215.8.

h. Receipts in connection with official travel.(1) The acceptance of accommodations, subsistence, or services,

furnished in kind, in connection with official travel from sources other thanthose indicated in subparagraph 6g(1), is authorized only when the individualis to be a speaker, panelist, project officer, or other bona fide participantin the activity attended and when such attendance and acceptance is authorizedby the order-issuing authority as being in the overall government interest.

(2) Except as indicated in subparagraph 6h(1), naval personnel maynot accept personal reimbursement from any source for expenses incident toofficial travel, unless authorized by their commanding officer or the head oftheir activity, consistent with guidance provided by the appropriate Standardsof Conduct counselor (pursuant to 5 USC 4111 or other authority). Rather,reimbursement must be made to the government by check payable to theTreasurer of the United States. Personnel will be reimbursed by the govern-ment in accordance with regulations relating to reimbursement.

(3) In no case must naval personnel accept reimbursement,either in kind or in cash, which is extravagant or excessive in nature.

(4) When accommodations, subsistence, or services in kind arefurnished to naval personnel by nongovemment sources, consistent with thesubsection, appropriate deductions must be reported and made in the travel,per diem, or other allowance payable.

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i. (not quoted)j. Prohibition of contributions or presents to superiors. Naval

personnel must not solicit a contribution from other DOD personnel for agift to an official superior, make a donation or a gift to an official superior,or accept a gift from other DOD personnel subordinate to themselves. Thissection, however, does not prohibit voluntary gifts or contributions of nominalvalue on special occasions, such as marriage, illness, transfer, or retirement,provided any gifts acquired with such contributions must not exceed areasonable value.

k. Use of government facilities, property, and manpower. Navalpersonnel must not directly or indirectly use, take, dispose, or allow the use,taking, or disposing of, government property leased to the government, forother than officially approved purposes. Government facilities, property, andmanpower (such as stationery, stenographic and typing assistance, mimeographand chauffeur services) must be used only for official government business.Naval personnel have a positive duty to protect and conserve governmentproperty. These provisions do not preclude the use of government facilitiesfor approved activities in furtherance of naval community relations, providedthey do not interfere with military missions or government business. See SEC-NAVINST 5720.44 for community relations guidance.

l. Use of civilian and military titles or position in connectionwith commercial enterprises.

(1) All naval personnel, except special government employees, areprohibited from using their grade, rank, title, or position in connection withany commercial enterprise or in endorsing any commercial product. This doesnot preclude author identification for materials published in accordance withDOD procedures. A commercial enterprise is any entity which engages inactivities which produce income as defined in Int. Rev. Code of 195461, andwhich has not been exempted from paying income taxes to Int. Rev. Codeof 1954, 501(a).

(2) All retired military personnel and all members of Reservecomponents, not on active duty, are permitted to use their military titles inconnection with commercial enterprises, provided that they indicate theirinactive Reserve or retired status. If, however, such use of military titles inany way casts discredit on the Department of the Navy or the Departmentof Defense or gives the appearance of sponsorship, sanction, endorsement,or approval by the Department of the Navy or the Department of Defense,it is prohibited. In addition commanders of overseas installations mayfurther restrict the use of titles including use by retired military personnel andmembers of Reserve components, not on active duty, in overseas areas.

m. Outside employment of DOD personnel.(1) Naval personnel must not engage in outside employment

or other outside activity, with or without compensation, that(a) interferes with, or is not compatible with, the per-

formance of their government duties,(b) may reasonably be expected to bring discredit on the

government or the Department of the Navy, or(c) is otherwise inconsistent with the requirement of this

instruction, including the requirements to avoid actions and situations whichreasonably can be expected to create the appearance of conflicts of interests.

(2) Enlisted naval personnel on active duty may not be ordered orauthorized to leave their post to engage in a civilian pursuit, business, or pro-fessional activity if it interferes with the customary or regular employmentof local civilians in their art, trade, or profession.

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(3) Active duty regular officers of the Navy and Marine Corpsmannot be employed by any person furnishing naval supplies or war materialsto the United States. If such an officer is so employed, his entitlement to payceases for so long as he is so employed.

(4) Off-duty employment of military personnel by an entityinvolved in a strike is permissible if the person was on the payroll of theentity before the commencement of this instruction. After a strike begins andwhile it continues, no military personnel may accept employment by that in-volved entity at the strike location.

(5) Naval personnel are encouraged to engage in teaching,lecturing, and writing. Naval personnel, however, must not, either for orwithout compensation, engage in activities that are dependent on informa-tion obtained as a result of their government employment, except when theinformation has been published or is generally available to the public, or itwill be made generally available to the public and the official authorized torelease such information to the public gives written authorization for the useof nonpublic information on the basis that the use is in the public interest.

(6) Civilian Presidential appointees in the Department of the Navymust not receive compensation or anything of monetary value for anyconsultation, lecture, discussion, writing, or appearance, the subject matterof which is devoted substantially to naval responsibilities, programs, or opera-tions or which draws substantially from official material which has not becomepart of the body of public information.

n. Gambling, betting, and lotteries. While on government-owned,leased, or controlled property, otherwise while on duty for the government,naval personnel must not participate in any gambling activity, including alottery or pool, a game for money or property, or the sale or purchase ofa number slip or ticket. The only exceptions are for activities which have beenspecifically approved by the Secretary of the Navy.

o. Indebtedness. Naval personnel must pay their just financial obliga-tion in a timely manner, particularly those imposed by laws (such as federal,state and local taxes), so that their indebtedness does not adversely affect thegovernment as their employer. The Department of the Navy is not requiredto determine the validity or amount of disputed debts.

7. Responsibilities for actiona. (not quoted)b. (not quoted)c. Commanding officers and heads of activities. The basic responsibility

for complying with the requirements of this instruction rests with individualpersonnel concerned, but the primary responsibility for ensuring such com-pliance must rest with officers exercising command or similar authority overpersonnel. Each commanding officer or head of a command, bureau, office,or activity is specifically responsible for the following:

(1) The continuing dissemination of the applicable information inthis instruction to all naval personnel within his organization at least semi-annually, in a manner which will ensure familiarity and compliance with thepertinent provisions of this instruction by all personnel. (This is a continuingrequirement and is in addition to the initial briefing required by paragraph 10.)

(2) The establishment and continuing execution of the proceduresand controls prescribed in paragraph 9, below, to ensure that each positionis reviewed as required by paragraph 9j that all naval personnel within hisorganization who are required to file confidential statements of affiliationsand financial interests (DD Form 1555) do file them in a timely manner andthat such statements are promptly and carefully reviewed.

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(3) Making determinations pursuant to this instruction and 18USC 208(b) with respect to disqualification of personnel within his organiza-tion from performing duties in which they have conflicts of apparent con-flicts of interests.

(4) Ensuring that Reservists detailed to perform active duty fortraining at his organization are assigned duties which will minimize thepossibility that they may obtain information that could be used by them ortheir employers to gain an unfair advantage over civilian competitors.

(5) Receiving and taking prompt and appropriate action on reportsconcerning acceptance of gratuities or other violations of this instruction orrelated statutes by personnel within his organization.

AII-17

1. GENERAL

APPENDIX III

SHIP'S STORE OPERATION

Appendix III is published to outline the standards of customer servicethat normally may be expected from the ship’s store. These standards shouldbe used by type commanders, commanding officers, supply officers, and ship’sstore officers when evaluating the effectiveness of a ship’s store operationin terms of services offered to customers.

In order to make a realistic evaluation, the officer must take into con-sideration the facilities, equipment, space, and personnel available to theindividual ship’s store operation and match these capabilities with thestandards set forth here. If a ship does not possess the capability to meet allor part of any standard, its performance should be evaluated as if thatstandard or portion did not exist. At the same time, continuing action mustbe taken by all levels of command to upgrade the capabilities of all ships tomeet these standards.

a. The ship’s store is located in an area readily accessible to the crew andtroops.

b. A suitable display area is provided.

2. HOURS OF OPERATIONa. Prominently posted.b. Visible from exterior.c. Forty-two sales hours per week (underway).d. Twenty sales hours per week (in port).e. Customers allowed a minimum of 15 minutes after closing to conclude

shopping (walk-in stores only).f. Customers notified at least 1 week in advance of all store closings and

changes in store hours.g. Hours set to provide the entire crew an opportunity to shop.h. Staggered hours for different stores to provide service after working

hours.

3. POLICY SIGNSa. Policy signs should be prominently posted in the retail store for

customers to see.b. Checks: “Personal checks will be accepted up to amount of sale.”c. Availability of merchandise and services: “In order to better serve you,

we solicit your comments on items carried and services offered. Drop a notein the suggestion box. The ship’s store officer will give it personal attention.”

d. Special orders: “Special orders may be made through the ship’s storefor authorized merchandise not carried in stock.”

e. Profits: “All profits go to the Recreation Fund.”

AIII-1

f. Refunds: “If you buy defective merchandise in this store, here is whatthe ship’s store will do:

If the defective merchandise is covered by a manufacturer’sguarantee and that guarantee is still in effect, bring the itemback and we will refund your money.

If the defective merchandise is not covered by a manufacturer’sguarantee and if you have bought the item within the last 30days, bring it back and we will refund your money.”

g. Cigarettes: “Warning: the Surgeon General has determined thatcigarette smoking can be hazardous to your health.”

4. MERCHANDISE

a. The 100-percent in-stock position for those basic items listed in thecurrent Merchandising and Stocking Guide for Ship’s Stores (NAVRESSOPub 81) plus other high demand items as indicated by the ship’s individualsales experience.

b. Perishable items (such as candy, cigarettes, cigars, film, etc.) arein a fresh, saleable condition.

c. Items temporarily out of stock should be identified by proper signsat shelf locations.

d. Special order service available and convenient.

e. An adequate range of products of special interest to black customerswill be stocked.

5. PUBLICITY

a. Plan of the Day and ship’s newspaper are used to publicize sales.

b. Bulletin boards maintained current.

6. PRICING AND MARKDOWNS

a. Price list is prominently posted in the immediate area of the retailstore, if appropriate.

b. Selling price is clearly marked on each item shelf or bin, as appropriate.

c. Markdown plan is established to ensure action at the mostadvantageous time, considering such factors as peak-selling season, end-of-season clearance, special events, etc.

d. Markdowns taken on all merchandise soiled or damaged.

e. Markdowns are made available on an equal basis to all customers withno special consideration to any group of customers.

f. Voluntary price reductions and off-invoice buying allowances passedon to customers to extent feasible.

7. DISPLAY

a. Exterior display windows fully used and properly signed to presentattractive and effective merchandise displays. Displays changed frequentlyto stimulate customer interest.

AIII-2

b. All merchandise displayed in a manner that is

attractive,

quickly identifiable,

easily seen,

neatly arranged,

readily accessible for quick selection,

correlated for convenient selection and shopping ease, and

clean (this includes fixtures).

c. Tops of showcases kept clear of vendor-supplied merchandisecards/racks (walk-in stores).

d. Ledges used to attractively display merchandise and not to store it.e. Selling prices clearly indicated on shelves and bins, if appropriate.f. Suitable sign holders used for wall signs, directory signs, merchandise

signs, etc.

g. Special event signs used according to instructions in display bulletins.

h. New items featured and so identified.

8. APPLIANCESa. Electrical outlets available to test electrical items.b. All display models of electrical items in working order.

c. List of best selling records and tapes posted.

9. ATHLETIC CLOTHING AND EQUIPMENT

a. All motorcycle helmets meet the Z90.1 Safety Standards.b. Information available to all patrons concerning the hazards of

scuba diving when equipment is purchased.

10. HOBBY ITEMSa. Assistance offered customers in obtaining repair of power tools

under warranty when purchased on special orders.

b. Related categories displayed next to each other.c. All manufacturer’s merchandise of same category displayed next

to each other on shelves.

11. JEWELRYa. Merchandise price lines within the categories offered for sale.b. Items with a mechanism, such as watches, clocks, lighters, checked

to determine if they are in working order at the time of sale.c. For items that include guarantees, the guarantee given to the

customer with the items purchased.

12. LUGGAGE AND LEATHER GOODSa. Personal leather goods displayed in coordinated sets of matching

pieces, as appropriate.b. Price tags affixed to personal leather goods so they do not mar

or deface the leather.

AIII-3

13. PHOTOGRAPHIC SUPPLIESa. Film sold on a first-in, first-out basis, with short-dated film

segregated from fresh stock, and marked down and sold out. Expired filmreturned to vendor for appropriate credit, if any.

b. Cartons, instructions, books, warranty cards, and carrying cases foritems displayed stored in an appropriate place close to sales area.

14. STATIONERY SUPPLIESa. Ship’s store selling price of greeting cards and pocket-size books

adjacent to display.b. All seasonal greeting cards, gift wrap, and party goods removed the

day after the holiday.c. Magazines frequently screened to ensure current selections available;

offensive literature, recordings, or merchandise should not be offered for sale.d. Customers allowed to test typewriters offered for sale.

15. TOILETRIESa. Fragrances stored in cool, dark place to minimize evaporation.b. Careful age control and stock rotation to ensure that fragrances

are kept to peak standards of quality and appearance.c. Toiletries and combs for black customers stocked and displayed.d. Self-service merchandise displayed full face for easy product

identification when possible.

16. UNIFORMS AND UNIFORM ACCESSORIESa. Uniform trousers located near uniform shirts.b. Belts on display near trouser section, neckwear near dress shirt

sections, etc.c. Displays showing a uniform according to season maintained current.d. Uniform dress shirts arranged by size and sleeve length and clearly

marked as to price and size.e. Sign posted informing customers of availability of direct delivery

service on uniform items from the Uniform Support Center, Norfolk, Virginia,via mail orders and the toll-free and AUTOVON telephone numbers. Orderforms available.

VENDING MACHINES

1. Exterior of vending machines and adjacent area kept clean.

2. Prices and instructions prominently displayed on machines.

3. Adequate lighting for displays.

4. Adequate product selections.

5. Sold out indicators operating.

6. Glass free from breaks or cracks.

7. Inside of machine clean. Finish in good condition.

8. Only high quality products vended.

9. Packages neat and appetizing.

AIII-4

10. Product fresh and at proper temperature.

11. Safety devices installed and operating.

12. Refunds made cheerfully with no delay.

13. Customers reporting malfunctions treated courteously.

14. Malfunctioning machines promptly serviced or repaired.

15. Vending machine custodian properly trained in good customer relationapproaches.

16. Adequate number of trash receptacles available.

17. Fully stocked at regular intervals to ensure continuous product availability.

SNACK BAR

1. GENERALa. An ice cream machine is provided when authorized to be operated on

board.

2. HOURS OF OPERATION

a. Prominently posted.b. Forty-two sales hours per week (underway).c. Twenty sales hours per week (in port).d. Customers should be notified 1 week in advance when the outlet will

be closed or when any changes in store hours are made.e. Hours set to provide the entire crew an opportunity to buy from the

snack bar.f. Staggered hours for different snack bars to provide service after

working hours.

3. AVAILABILITY OF MERCHANDISEa. Products offered for sale are displayed. If display space is not

available, a sign indicating items available and price is prominently posted.b. Food items on display properly covered or protected from con-

taminantion.

c. Canned juices offered for sale.d. Popcorn offered for sale.e. Confections and snack items offered for sale.

4. CLEANLINESS

a. A presentable level of cleanliness maintained at all times.b. Facilities policed frequently for safety hazards.c. Back counters cleaned frequently.d. Snack bar operators attired appropriately and trained to render

efficient service to all customers.e. Facilities sprayed for insects on a regularly scheduled basis.

AIII-5

BARBERSHOP

1. GENERALa. Layouts provide for adequate ventilation, cooling, heating, lighting,

and hot and cold water.b. No Tipping sign posted.c. Authorized Grooming Standards for U.S. Navy Personnel sign posted.d. Barbers indoctrinated in customer courtesy, identification, and

complaint procedures.e. Shop attractive, clean, and tastefully decorated.f. Equipment in good condition and in adequate supply to provide

required services.g. When a barber chair is not in use, a small sign Not in Use placed on

the mirror.h. Hours of operation prominently posted.i. Ships having less than 100 accommodations, portable barbershop

utensils stored in a locker.j . Ships having 101 to 300 accommodations, a one-chair shop is

available with one additional chair for each additional 300 accommodationsor fraction.

k. If two or more barber chairs are required for troops, a separatetroop barbershop is provided.

2. SANITATIONa. Sanitary regulations posted and adhered to.b. Barbers dressed in clean washable coats. Personal hygiene practiced

by all barbers at all times.c. Barbers wash their hands and sterilize instruments before serving

each customer. Deodorants and mouthwash made available and their use bybarbers encouraged.

d. Each unit equipped with a sponge or paper towels to wipe outthe washbasin and backbar.

e. Freshly laundered white towels or paper towels used for each customer.f. Haircloths kept clean at all times. New neck strip used on each

customer.g. Bottles and jars kept closed when not in use.h. All instruments scrupulously cleaned immediately after use. Razors,

scissors, combs, clipper blades, and other tools thoroughly washed with soapand hot water to remove film and debris, then dried with disposable tissueand sanitized.

i . Clippers kept clean at all times. After each use, foreign matterremoved, clippers wiped with cotton saturated with sterilizing solution, anddried with a tissue.

j. If suspected that a customer has a communicable disease or infection,the clippers and other metallic instruments used will be segregated and theship’s medical officer contacted for disinfecting procedures to be followed.

k. Barbers having any infections or communicable diseases do notattend customers.

l. Barbers do not smoke while attending customers.m. Strops and hones kept clean at all times.n. No razor stropped or honed without having been previously sterilized.o. Therapeutic practices, such as treating pimples and ingrown hair,

prohibited.

AIII-6

p. Only type of material approved by the medical officer used to treatnicks. These materials applied only with freshly laundered towels or sterilecotton.

q. Common hairbrushes, dusters, and shaving brushes prohibited.r. Cut hair frequently removed from the floor by dustless methods.

3. HAIRCUTTINGa. Authorized customers provided with the authorized type of haircut

desired.b. The following services available based upon customer demand and

latest directives on hair grooming:(1) Regular haircut(2) Afro haircut(3) Tonic

c. Pictures of regular and afro haircuts mounted side by side in aprominent area of all shops.

d. Haircuts include shaving above and around the ears, below thesideburns, and across the back of the neck.

e. All haircuts completed by a neck astringent rub, talc dust, or both.

LAUNDRY AND DRY CLEANING

1. Twenty-four hour service—maximum three-day service.

2. Wash—24 pounds per man per week.

3. Finish press three work uniform shirts and trousers per officer andCPO/SNCO (E7-E9) accommodation per week.

4. Finish press one dress uniform shirt and trousers per crew (plus troops)accommodation per week.

5. If self-service, customer able to locate finished goods and check out within15 minutes.

6. Customer given claim check for garments turned in for processing.

7. Sign indicating when finished work will be ready for pickup. (Inby Out by )

8. Marking staples and tags removed from dry cleaning garments or stapledin such a manner as not to touch cloth (belt loops, buttonholes, etc.).

9. Policy to handle claims for lost or damaged customer goods in effect (claimfile available for inspection).

10. Counter personnel’s appearance and attitude pleasing.

11. Inspection of two finished garments chosen at random compare favorablywith similar commercial processing (no missing buttons, free of wrinkles, nodouble creases).

12. Entire customer service area including counter presents attractiveappearance.

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13. Dry-clean and finish press one dress uniform per accommodation permonth.

14. Only nonflammable dry cleaning solvent must be used in shipboard drycleaning plants. The solvent used must be tetrachloroethylene (per-chlorethylene), NSN 6810-00-819-1128 and NSN 6810-00-270-9982.

1.

2.

3.

4.

5.

6.

TAILOR SHOP

Garments finished for customer within 5 working days.

Customers serviced promptly at counter (within 5 minutes).

Customer given claim check for garments turned in for alteration.

Entire customer area (including counter) presents attractive appearance.

Counter personnel appearance and attitude pleasing.

Random inspection of two finished garments per day indicates work doneas requested and comparable with commercial standards.

7. Hours of operation prominently posted.

CUSTOMER EVALUATION REPORT

USS DATE

In order to evaluate the services provided by the ship’s store facilities, it isrequested the following questionnaire be completed:

Please check appropriate block.

AIII-8

APPENDIX IV

DOCUMENT DISTRIBUTION

SECTION I—NAVSUP FORMS

NAVSUP FORMS DISTRIBUTION

REQUISITION RECEIPT, MEN’s (NAVSUP FORM 28)REQUISITION RECEIPT, WOMEN’S (NAVSUP FORM 28A)

(HEALTH AND COMFORT ISSUES)

For personnel in pay status

Original To the disbursing officer

One copy To the Accountability File (SSA-21)

One copy To person receiving issue

For personnel in nonpay status

Original To the supply officer

Two copies To the Expenditures to Use File (SSA-6)

One copy To the Expenditures Invoice File (SSA-14)

One copy To the Accountability File (SSA-21)

One copy To person receiving issue

SHIP’S STORE FINANCIAL CONTROL RECORD (NAVSUP FORM 235)

Original To the Financial Control File(SSA-1)

VENDING MACHINE CONTROL (NAVSUP FORM 236)

Original To the Vending Machine Control File(SSA-16)

INVENTORY COUNT SHEET (NAVSUP FORM 238)

White (original) To the Accountability File (SSA-21)

Yellow To recordskeeper for postings

Pink To responsible custodian

Blue For use as price list (optional)

AIV-1

NAVSUP FORMS

STOCK RECORD (NAVSUPFORM 464)

Original Held underkeeper

DISTRIBUTION

lock and key by the records-

CASH REGISTER RECORD (NAVSUP FORM 469)

Original Held by ship’s store officer or cashcollection agent

CASH RECEIPT BOOK (NAVSUP FORM 470)

Original Held by responsible custodian

OVER-RING/REFUND VOUCHER (NAVSUP FORM 972)

Original Attached to applicable page of the NAV-SUP Form 469

INTRA-STORE TRANSFER DATA (NAVSUP FORM 973) (See fig. AIV-1.)

Original To the Accountability File (SSA-21)

Duplicate To bulk storeroom custodian

Triplicate To the Number Control and BreakoutFile (SSA-2)

Quadruplicate To receiving responsible custodian

JOURNAL OF RECEIPTS (NAVSUP FORM 977)

Original To the Journal of Receipts and Journal ofExpenditures File (SSA-3)

JOURNAL OF EXPENDITURES (NAVSUP FORM (978)

Original To the Journal of Receipts and Journal ofExpenditures File (SSA-3)

RETAIL PRICE CHANGE (NAVSUP FORM 983)—Markdowns Below Cost—and Markdowns to Zero

Original To the Charges Against Ship’s StoreProfits File (SSA-22)

One copy To the Accountability File (SSA-21)

RETAIL PRICE CHANGE (NAVSUP FORM 983)—Retail Markdowns and—Markons

Original To the Accountability File (SSA-21)

AIV-2

AIV-3

NAVSUP FORMS DISTRIBUTION

RETAIL PRICE CHANGE (NAVSUP FORM 983)—Standard PriceAdjustments

—Purchase Variances

Original To the Fiscal Gains or Losses File (SSA- 15)

One copy To the Accountability File (SSA-21)

NUMBER CONTROL (NAVSUP FORM 980)

Original To the Number Control and BreakoutFile (SSA-2)

TAX-FREE CIGARETTE INVENTORY (NAVSUP FORM 1234)

Original To the Accountability File (SSA-21)

NAVCOMPT FORMS

NAVCOMPT FORMS DISTRIBUTION

SHIP’S STORES BALANCE SHEET AND PROFIT AND LOSS STATE-MENT (NAVCOMPT FORM 153)

Original and one copy To FAADCPAC or FAADCLANT, asappropriate, with returns

One copy To retained returns

One copy To commanding officer

Two copies To special services officer

One copy To Navy Supply Corps School, Athens,Georgia, for the accounting period ending30 September

SUMMARY OF MATERIAL RECEIPTS/TRANSFERS (NAVCOMPTFORM 176)

Original To FAADCPAC or FAADCLANT, asappropriate, with returns along with twocopies of each DD Form 1149 invoicebeing summarized

One copy To retained returns with one copy ofeach DD Form 1149 invoice beingsummarized

DISCOUNT EXPIRES (NAVCOMPT FORM 442)

Original Attached to original DD Form 1155submitted for payment

AIV-4

NAVCOMPT FORMS DISTRIBUTION

VOUCHER FOR DISBURSEMENT AND/OR COLLECTION (NAV-COMPT FORM 2277)—Contractor’s Remittance for Rental of LeasedAmusement Machines

Original and all copies To disbursing officer

Two copies Returned by the disbursing officer:

one copy—Charges Against Ship’s StoreProfits (SSA-22);

one copy—Accountability File (SSA-21)

VOUCHER FOR DISBURSEMENT AND/OR COLLECTION (NAV-COMPT FORM 2277)—Disbursement of Ship’s Store Profits

Original and all copies To disbursing officer

Two copies Returned by disbursing officer:

one copy—Charges Against Ship’s StoreProfits (SSA-22);

one copy—Accountability File (SSA-21)

VOUCHER FOR DISBURSEMENT AND/OR COLLECTION (NAV-COMPT FORM 2277)—Vendor’s Remittance for Sales of Travelers’ Checks

Original and all copies To disbursing officer

Two copies Returned by disbursing officer:

one copy—Charges Against Ship’s StoreProfits (SSA-22);

one copy—Accountability File (SSA-21)

DD FORMS

DD FORMS DISTRIBUTION

ARMED FORCES MEASUREMENT BLANK

ORTHOPEDIC BOOTS AND SHOES (DD FORM 150)

SPECIAL SIZED CLOTHING FOR MEN (DD FORM 358)

SPECIAL SIZED CLOTHING FOR WOMEN (DD FORM 1111)

Original and three To shore supply support activitycopies

One copy To Outstanding Requisition File (SSA-12)

One copy To Incoming Material File (SSA-20)

One copy To Receipt Inspector’s File (SSA-23)

AIV-5

DD FORMS

REPORT OF SURVEY (DD FORM

Original For

DISTRIBUTION

200)

surveys to ship’s store profits:

To Charges Against Ship’s StoreProfits (SSA-22)

For surveys to Navy Stock Fund:

To Navy Stock Fund File (SSA-7)

One copy To Accountability File (SSA-21)

One copy To Expenditure Invoice File (SSA-14)

REQUISITION AND INVOICE/SHIPPING DOCUMENT (DD FORM1149) (See figs. AIV-2 and AIV-3.)

DD FORM 1149—Bulk Sale to Another Activity

Original To Accountability File (SSA-21)

One copy To Cash Sales File (SSA-8)

One copy To Expenditures Invoice File (SSA-14)

One copy Retained by retail store operator

One copy Retained by purchaser

One copy Provided to commanding officer of therequesting ship

DD FORM 1149—Material Exchanged for Similar Items

Original To

One copy To

One copy To

One copy To

DD FORM 1149—Cash Refund

Accountability File (SSA-21)

Expenditure Invoice File (SSA-14)

vendor

recordskeeper for postings

Original To disbursing officer with check from thevendor

One copy To Accountability File (SSA-21)

One copy To Expenditure Invoice File (SSA-14)

One copy To recordskeeper for postings

One copy To vendor

One copy To Receipts from Purchase File (SSA-4)

One copy To Credit Memorandum and Cash RefundFile (SSA-19)

AIV-6

AIV-7

AIV-8

DD FORMS DISTRIBUTION

DD FORM 1149—Credit Memorandum

Original To Credit Memorandum and Cash RefundFile (SSA-19) with original credit memo-randum until applied against new pur-chase

One copy To Accountability File (SSA-21) with copyof credit memorandum

One copy To Expenditure Invoice File (SSA-14)

One copy To recordskeeper for postings

One copy To vendor

Remaining copies To Credit Memorandum and CashRefund File (SSA-19)

DD FORM 1149—Cost of Operations Invoice

Original To retained returns

One copy To Expenditure Invoice File (SSA-14)

DD FORM 1149—Dishonored Checks

Original To FAADCPAC and FAADCLANT, asappropriate, with returns along withoriginal checks

One copy To retained returns along with a copy ofchecks

One copy To Expenditure Invoice File (SSA-14)along with a copy of dishonored check

DD FORM 1149—Health and Comfort Issue Recap (For personnel in anonpay status)

Original and one copy To Expenditure to Use File (SSA-6)

One copy To disbursing officer for issues chargeableto an individual’s pay record

To supply officer for issues chargeable toOPTAR

One copy

One copy

With signature of disbursing officer orsupply officer to Accountability File(SSA-21)

To Expenditure Invoice File (SSA-14)

AIV-9

DD FORMS DISTRIBUTION

DD FORM 1149—Issue to Other Appropriations(Such as General Mess and General Stores)

Original and one copy To Expenditure to Use File (SSA-6)

One copy To Accountability File (SSA-21)

One copy To Expenditure Invoice File (SSA-14)

One copy To accountable officer (such as supplyofficer or food service officer)

DD FORM 1149—Memorandum Cash Sale Invoice Deposit of Cash withthe Disbursing Officer

Original To Accountability File (SSA-21)One copy To Expenditure Invoice File (SSA-14)Two copies To Returns File (SSA-10)Three copies Retained by the disbursing officer when

the DD Form 1149 is forwarded forsignature

DD FORM 1149—Receipt from Other Appropriation (Such as GeneralMess or General Stores)

Original and one copy To Expenditure to Use File (SSA-6)

One copy To Accountability File (SSA-21)

One copy To Completed Requisition File (SSA-13)

DD FORM 1155—Order for Supplies or Services/Request for Quotations(See figs. AIV-4 through AIV-9 for variations.)

FOR U.S. MERCHANDISE:

When fast pay procedures apply:

Signed original and To vendortwo copies

One copy To Receipt Inspector’s File (SSA-23)

One copy To Incoming Material File (SSA-20)

All remaining copies To Outstanding Purchase Order File(SSA-11A)

When fast pay procedures do not apply:

Original Retained in Outstanding Purchase OrderFile (SSA-11A)

One signed copy To vendor

One copy To Receipt Inspector’s File (SSA-23)One copy To Incoming Material File (SSA-20)

All remaining copies To the Outstanding Purchase Order File(SSA-11A)

AIV-10

AIV-11

AIV-12

AIV-13

AIV-14

AIV-15

AIV-16

SHIP’S STORE

APPENDIX V

MANAGEMENT OBJECTIVES

The following list of management objectives is provided as a correlated,ready reference. These objectives should be reviewed periodically and usedas a guide in achieving the desired operating results.

1. Four stock turns per year are required. Achieving a stock turn of atleast 1.33 per accounting period will result in attaining the annual goal.

2. Monthly review of all stock and stock records.

3. Maintaining cost of operations expenses at 2.5% but not more than5% of sales per accounting period.

4. Attaining a gross profit of approximately 15% to cover general operatingexpenses (such as General Fund assessment, cost of operations, markdowns,surveys, etc.) and not jeopardize profits available for transfer to the recrea-tion fund.

5. Attaining a minimum of 32-percent net profit on can drink vendingmachines.

6. Attaining the planned operating profit in the snack bar.

7. Maintaining an in-stock position on all items of recurring demand andkeeping inventories within prescribed limitations.

OPERATIONAL ANALYSIS REPORT

The primary purpose of the Operational Analysis Report is to point outstock turn and the performance of other phases of the ship’s store operation.(Refer to fig. AV-1 as you read the information below.)

Figures reported on Operational Analysis Reports are obtained from theShip’s Store Balance Sheet and Profit and Loss Statement (NAVCOMPT Form153). Formulas used are as follows (caption numbers refer to captions on theOperational Analysis Report):

Data Block and Caption Explanations of Entries

Gross Profit Retail Sales (caption 1) minus Cost of RetailSales (caption 2).

AV-1

Figure AV-1.—Operational Analysis Report.

AV-2

Data Block and Caption

Operating ProfitPercentage

Vending MachineProfit Percentage

Amusement MachineProfit Percentage

Ship’s Store Stock Turn

Explanations of Entries

Operating Profit (caption 8) divided byRetail Sales (caption 1).

Vending Machine Profit (caption 14) dividedby Drink Vending Machine Sales (caption11).

Amusement Machine Profit (caption 16)divided by Amusement Machine Sales (cap-tion 15).

Total of the following captions

2—Cost of Retail Sales

5—Operating Expenses

9—Bulk Sales

10—Transfers to OSO

12—Cost of Sales—VM divided by Ship’sStore Opening Inventory (caption 20).

It should be noted that stock turns are based on opening inventory only,rather than on the average inventory for the period. While it is realized thaton some ships it would be advantageous to average the beginning and closinginventories, it is not considered that this would significantly alter the stockturn since ship’s stores are on a 4-month accounting period, rather thanmonthly.

SHIP’S STORE MANAGEMENT REPORT

1. Purpose

The primary purpose of the Ship’s Store Management Report is to pro-vide the commanding officer a list of key indicators concerning the ship’s storeoperation. The report will highlight sales, inventory, cash collection, and otherdata that represent significant changes and/or problems in the ship’s storeoperation.

2. Processing the Report

The supply officer will complete the Ship’s Store Management Report andforward it to the commanding officer by the fifth working day of the month.However, for the last month of the accounting period, the report should besubmitted by the fifteenth day of the month. The commanding officer shouldreview the report, record any remarks directly on the report, and return itto the supply officer. The supply officer should then forward the report tothe ship’s store officer to be filed in the Returns File (SSA-10). At the endof the accounting period, the monthly reports will be filed with the retainedreturns. (See fig. AV-2.)

AV-3

Figure AV-2.—Memorandum for Ship’s Store Management Report.

AV-4

3. Preparation

The information on the Ship’s Store Mangement Report should be takenfrom ship’s store records. The report should be prepared monthly using theformat illustrated in figure AV-3.

Data Block and Caption Instructions for Entries

1. SALES Enter the sales for the Current Month andTotal Sales the Accounting Period to Date as reported

on the Memorandum Cash Sale InvoiceDeposit of Cash with Disbursing Officer(DD Form 1149).

2. DRINK VENDING MACHINE OPERATION

a. Sales

b. Profits

c. Profit Percentage

3. INVENTORY

a. Over/Under Inventory

Total AuthorizedInventory

Balance Inventory

Over/Under

b. Stock Turn

c. Spot Inventory of BulkStoreroom

Number of ItemsChecked

Inventory Accuracy

Enter the sales for the Current Month andthe Accounting Period to Date as reportedon line N of the Vending Machine Controls(NAVSUP Form 236).

Enter the amount for the Current Monthand the Accounting Period to Date as re-ported on line U of the NAVSUP Form 236.

Enter the profit percentage for the CurrentMonth and the Accounting Period to Dateas reported on the NAVSUP Form 236.(Profit percentage objective: 32%-47% forcanned drink machines.)

Enter the amount reported on line C ofthe Inventory Control Record.

Enter the amount reported on line G of theControl Record.

Circle Over or Under as applicable. Enterthe amount reported on line H of the Inven-tory Control Record.

Enter the stock turn as reported on the In-ventory Control Record.

Enter the total number of items checkedduring the spot inventory.

Use the following formula to obtain inven-tory accuracy:

Number of items checked correctly dividedby total number of items checked (Inventoryaccuracy objective: 100%)

AV-5

Figure AV-3.—Ship’s Store Management Report.

AV-6

Figure AV-3.—Ship’s Store Management Report—Continued.

AV-7

Figure AV-3.—Ship’s Store Management Report—Continued.

AV-8

Data Block and Caption Instructions for Entries

d. Last Physical/Price Enter date of last inventory.Line Inventory taken on

Disproportionate Circle either YES or NO as appropriate.Difference existed If YES, explain in item 9, Comments.

e. The following unau- Enter any unauthorized items carried inthorized stock items stock. Authorized stock items are listed inare currently carried in NAVSUP P-487.stock:

f. The in-stock position Enter any emblematic item for which theof the following emble- in-stock position exceeds 90 days.matic items exceeds 90days’ anticipated sales:

4. CASH COLLECTION

a. Cash Collection Agent Circle either YES or NO as appropriate. Ifand Cash Register Re- NO, explain in item 9, Comments.cord (NAVSUP Form469) audited at leasttwice weekly by theship’s store officer

b. Actual cash registerreadings were auditedtwice weekly by theship’s store officer andverified in the CashRegister Record (NAV-SUP Form 469)

c. Cash Register Records(NAVSUP Forms 469)indicate cash collec-tions were made dailyand as required byNAVSUP P-487

d. Cash Receipt Books(NAVSUP Forms 470)indicate cash was turnedover to the disbursingofficer daily and as re-quired by NAVSUPP-487

The ship’s store officer’s initials will berecorded in the NAVSUP Form 469 eachtime audits are done.

Circle either YES or NO as appropriate. IfNO, explain in item 9, Comments.

Circle either YES or NO as appropriate. IfNO, explain in item 9, Comments.

Circle either YES or NO as appropriate. IfNO, explain in item 9, Comments.

AV-9

Data Block and Caption Instructions for Entries

e. Total cash collected for Circle either YES or NO as appropriate. Ifthe month as recorded NO, explain in item 9, Comments. (Objec-on the following forms tive: all amounts reported equal onecompared: another)

Cash Register Record (NAVSUP Form 469)Cash Receipt Book (NAVSUP Form 470)Memorandum Cash Sales Invoice of Cash Deposited with DisbursingOfficer (DD Form 1149)

f. The most significant dif-ference (overage orshortage) between cashcollected in any salesoutlet that was notcovered by an Over-ring/Refund Voucher(NAVSUP Form 972)was $

Explanation of the dif-ference

5. RECEIPTS AND PRICING

a.

b.

Receipt documents forthe month were for-warded to FAADC asindicated on the Journalof Receipts (NAVSUPForm 977)

Random spot checks ofthe selling prices of aminimum of 15 items aweek in the reta i lstore(s) revealed thenumber did not matchthe price on the StockR e c o r d ( N A V S U PForm 464)

6. PROFIT

a. Gross Profit

b. Operating Profit

Enter the largest difference as recorded inthe Cash Register Record (NAVSUP Form469) not covered by a NAVSUP Form 972.

Enter a brief statement on the results of theexamination of the difference conducted asper NAVSUP P-487.

Circle either YES or NO as appropriate. IfNO, explain in item 9, Comments.

After conducting a random spot check of15 items per week, enter the number of itemsin which the prices did not match those listedon the Stock Record (NAVSUP 464). (Ob-jective: zero errors)

Use the following formula to compute grossprofit using the NAVSUP Form 153:

C02 minus C10 divided by C02. (Objective:15%)

Use the following formula to computeoperating profit using the NAVSUP Form153:

C25 divided by C02. (Objective: 6%)

AV-10

Data Block and Caption

c. Markdowns andSurveys

d. Laundry Claims

e. Cost of Operations

7.

8.

9.

All FAADC letters onunpaid dealers’ bills andother letters on reconcili-ation have been answered

Instructions for Entries

Use the following formula to compute thetotal amount of markdowns and surveys us-ing the NAVSUP Form 153:

B23 plus B24 divided by C02. (Objective:2%)

Enter the amount of laundry claims reportedon line C13 of the NAVSUP Form 153.(Objective: 0)

Use the following formula to compute thetotal amount of cost of operations using theNAVCOMPT Form 153:

B22 divided by C02. (Objective: 2.5% to5.0%)

Circle either YES or NO as appropriate. IfNO, explain in item 9, Comments.

SAFETY, SECURITY, AND MATERIAL DISCREPANCIES

a.

b.

c.

Last inspection of ship’sstore spaces conducted

All stores, storerooms,and other spaces haverequired locks andemergency entry pro-cedures posted

Space/Discrepancy/Status

COMMENTS:

Enter date of last inspection.

Circle either YES or NO as appropriate. IfNO, explain in item 9, Comments.

Enter a list of safety, security, and materialdiscrepancies in ship’s store spaces, in-cluding any corrective action being taken.

Enter a brief explanation of any item circledNO and any other significant items, prob-lems, etc.

AV-11

APPENDIX VI

REFERENCES

Afloat Shopping Guide (ASG), NAVSUP P-4400, Naval Supply SystemsCommand, Mechanicsburg, PA, 1982.

Afloat Supply Procedures, NAVSUP P485, Naval Supply Systems Command,Washington, DC, 1985.

Armed Services Commissary Store Regulations (ASCSR), DODINST1330.17, Washington, DC, 1978.

Basic Military Requirements, NAVEDTRA 10054-E1, Naval Educationand Training Program Development Center, Pensacola, FL, 1985.

Consolidated Afloat Requisitioning Guide Overseas (CARGO), NAVSUPP-4998A (Atlantic Fleet), NAVSUP P-4998P (Pacific Fleet), NavalSupply Systems Command, Mechanicsburg, PA, 1986.

Department of the Navy Correspondence Manual, SECNAVINST 5216,5C,Washington, DC, 1983.

Military Requirements for Chief Petty Officer, NAVEDTRA 10047, NavalEducation and Training Program Development Center, Pensacola, FL,1985.

Military Requirements for Petty Officer First Class, NAVEDTRA 10046,Naval Education and Training Program Development Center, Pensacola,FL, 1985.

Naval Supply Systems Command Manual, Vol. 1, Introduction to Supply,Ch. 78, Naval Supply Systems Command, Washington, DC, 1966 (basic).

NAVRESSOINST 4065 (series), Navy Resale and Services Support Office,Fort Wadsworth, Staten Island, NY.

NAVRESSOINST 4065.12A, Minimum Levels of Patron Service.

NAVRESSOINST 4065.17, Distribution Productivity.

NAVRESSOINST 4065.20, COMSYSTRO TRF Authorization.

NAVRESSOINST 4065.21, Meat Department Procedures.

NAVRESSOINST 4065.22A, Produce Department Procedures.

NAVRESSOINST 4065.23, Grocery Department Procedures.

AVI-1

NAVRESSOINST 4065.24, Licensees’ Statement of Understanding.

NAVRESSOINST 4065.25, Control of Theft by Commissary StorePersonnel.

NAVRESSOINST 4065.26A, Produce Order Form.

NAVRESSOINST 4065.29, Cyclical Review List for COMSYSTOS.

NAVRESSOINST 4065.31, Markdown Log.

NAVRESSOINST 4065.34, Front End Procedures.

NAVRESSOINST 4065.36, Accounting Handbook.

Navy Customer Service Manual, NAVEDTRA 10119-B, Naval Educationand Training Program Development Center, Pensacola, FL, 1984.

Navy Resale and Services Support Office (NAVRESSO) PublicationNo. 82, Navy Resale and Services Support Office (NAVRESSO), 1983.

Retail Operation Management (ROM), Navy Resale and Services SupportOffice (NAVRESSO) letter dated 7 March 1985.

Ships’ Maintenance and Material Management (3-M) Manual, OPNAVINST4790.4, Chief of Naval Operations, Washington, DC, 1984.

Ship’s Store Afloat, NAVSUP P-487, Revision 2, Naval Supply SystemsCommand, Washington, DC, 1986.

Ship’s Store Afloat Catalog (SSAC), Navy Resale and Services SupportOffice, Fort Wadsworth, Staten Island, NY.

Ship’s Store Contract Bulletins, Navy Resale and Services Support Office,Fort Wadsworth, Staten Island, NY.

AVI-2

INDEX

A

Administration, 3-19 to 3-23correspondence, 3-19 to 3-21files and records, 3-21policy signs, 3-22 to 3-23procedural instructions, 3-22publications and directives, 3-21 to 3-22

Advancement, rewards and responsibilities of,1-1 to 1-2

Auditing expenditures, 5-18 to 5-22

Auditing procurement records, 4-19 to 4-22

Auditing receipts, 5-4 to 5-6

Auditing returns, 7-14 to 7-26assembling and substantiating the returns,

7-19 to 7-26delay and delinquency, 7-14merged returns, 7-14Ship’s Store Balance Sheet and Profit and

Loss Statement, 7-14 to 7-19

Auditing techniques, 7-6 to 7-14

Audits and inspections, 3-25 to 3-26Automated commissary system (ACS) and

daily deliveries, 8-13 to 8-16

B

Barbershop schedule and appointments, 3-14

Breakouts, 5-7

C

Can-type drink vending machines, 6-22Cash handling, 6-8 to 6-10

Cash register operations, 8-22 to 8-23Check-out procedures, 8-20 to 8-27

Commissaries, 8-1 to 8-27front end procedures, 8-17 to 8-27

authorized patrons, 8-19definitions, 8-19pass desks and identification

checks, 8-19authorized tender, 8-19 to 8-20check-out procedures, 8-20 to 8-27

cash register operations, 8-22 to8-23

safeguarding the funds at check-out, 8-23 to 8-27

scheduling of check-out per-sonnel, 8-21

supervising check-out produc-tivity and accuracy, 8-21 to8-22

sales floor, 8-17 to 8-19meat sales department (S-3),

8-17 to 8-18produce sales department (S-4),

8-18 to 8-19management of funds, 8-3 to 8-4

gifts, personal loans, employeechecks, and miscellaneous expendi-tures, 8-4

security of funds, 8-3 to 8-4authorized cash collectors, 8-3physical security, 8-3 to 8-4restrictions, 8-3transportation of funds, 8-4

management of stock, 8-4 to 8-17authorized stock objectives, 8-4 to

8-10inventory, 8-16 to 8-17procurement methods, 8-13 to 8-16

automated commissary system(ACS) and daily deliveries,8-13 to 8-14

warehouse and distributioncenters, 8-14 to 8-16

receipts, 8-12 to 8-13control of receipts, 8-12 to 8-13receiving numbers, 8-13

I-1

Commissaries—Continuedmanagement of stock—Continued

special stock items and legal re-strictions, 8-11 to 8-12

bonus coupons, 8-12bonus merchandise, 8-12concessions, 8-12medical items, 8-11pest control agents, 8-11portable fire extinguishers, 8-12sample merchandise, 8-12unauthorized stock items, 8-11

to 8-12vending machines, 8-12

stock control systems, 8-10stock review and customer requests,

8-10 to 8-11organization, control, and administration,

8-1 to 8-2billets, 8-2NAVRESSO, 8-1senior enlisted assignments and re-

sponsibilities, 8-2training, 8-2

scope of operation, 8-1summary, 8-27

Coordinated Shipboard Allowance List(COSAL), 3-25

Correspondence, 3-19 to 3-21Cup-type drink vending machine, 6-19 to

6-22Customer services, 3-26 to 3-29

evaluating customer services, 3-26providing responsive services, 3-26resolving customer complaints, 3-26 to

3-29

D

Defense Logistics Agency, 2-1 to 2-3defense supply centers, 2-1 to 2-2DLA distribution system, 2-2 to 2-3

Definitions of ship’s store terms, AI-1 toAI-5

Directives and publications, 3-21 to 3-22Document distribution, AIV-I to AIV-17Dollar bill changers, 6-24

E

Electronic amusement machines, 6-23 to 6-24Excess stock, disposition of, 5-14Expenditures and receipts, 5-1 to 5-25

F

Files and records, 3-21Financial Control Record, preparation of the,

7-32 to 7-37Fleet accounting and disbursing centers

(FAADCs) audit, 3-25 to 3-26Flow process chart, preparing a, 3-8Foreign merchandise, disposed of, 5-14Fountain or snack bar supervision, 6-24

to 6-28Front end procedures, 8-17 to 8-27

authorized patrons, 8-19authorized tender, 8-19 to 8-20check-out procedures, 8-20 to 8-27sales floor, 8-17 to 8-19

Funds, management of, 8-3 to 8-4gifts, personal loans, employee checks,

and miscellaneous expenditures, 8-4security of funds, 8-3 to 8-4

I

Inspections and audits, 3-25 to 3-26fleet accounting and disbursing centers

(FAADCs) audit, 3-25 to 3-26internal inspection and audit, 3-25supply management inspection, 3-25

Internal inspection and audit, 3-25Introduction, 1-1 to 1-4

scope of this rate training manual, 1-3 to1-4

Ship’s Serviceman rating, 1-1 to 1-3important sources of information for

the senior Ship’s Serviceman, 1-2to 1-3

rewards and responsibilities ofadvancement, 1-1 to 1-2

Inventories, 7-2 to 7-6definition and purpose, 7-3mid-accounting period inventory, 7-6preparation for inventory, 7-3 to 7-4supervision of procedures, 7-4 to 7-6

Inventory, 8-16 to 8-17Inventory control records, 4-5 to 4-11

J

Journal of Expenditures, 7-10 to 7-14Journal of Receipts, 7-10

I-2

L

Laundry schedule, best type of, 3-11 to 3-12

M

Management, 3-1 to 3-29administration, 3-19 to 3-23

correspondence, 3-19 to 3-21classified information, 3-20principles of letter writing, 3-20

to 3-21writing guides, 3-19 to 3-20

files and records, 3-21disposing of obsolete files, 3-21maintaining the files, 3-21organizing the files, 3-21

policy signs, 3-22 to 3-23procedural instructions, 3-22publications and directives, 3-21 to

3-22issuance, 3-22maintenance, 3-22procurement, 3-21 to 3-22stowage, 3-22

customer services, 3-26 to 3-29evaluating customer services, 3-26providing responsive services, 3-26resolving customer complaints, 3-26

to 3-29loss of or damage to personal

apparel, 3-26 to 3-28procedure for handling claims,

3-29establishing work schedules, 3-11 to 3-14

amount of work processed weekly,3-11

barbershop schedule and appoint-ments, 3-14

appointment system, 3-14division schedule, 3-14

best type of laundry schedule, 3-11to 3-12

capacity of laundry equipment, 3-11sample laundry schedule, 3-12 to

3-14size and competence of the laundry

crew, 3-11inspections and audits, 3-25 to 3-26

fleet accounting and disbursingcenters (FAADCs) audit, 3-25to 3-26

internal inspection and audit, 3-25supply management inspection, 3-25

Management—ContinuedMaintenance and Material Management,

3-23 to 3-25Coordinated Shipboard Allowance

List (COSAL), 3-25PMS schedules, 3-23, to 3-24

cycle schedule, 3-23quarterly schedule, 3-23 to

3-24weekly schedule, 3-24

recommendations for overhaul orrepair, 3-24 to 3-25

personnel management, 3-14 to 3-19assignment of duties, 3-15

fair division of work, 3-15recognition of responsibilities,

3-15delegation of authority, 3-15 to

3-16training your staff, 3-16 to 3-17

effective communication, 3-16 to3-17

formal training courses, 3-17on-the-job training, 3-16rotation of duties, 3-16

your ability as a leader, 3-19your ability as a supervisor, 3-17 to

3-19evaluating the work of your

personnel, 3-18 to 3-19maintaining a suitable span of

control, 3-18planning a physical layout, 3-5 to

3-6designing a layout analysis chart, 3-5

to 3-6using layout analysis charts, 3-6

layout of a retail self-serviceactivity, 3-6

layout of service activities, 3-6planning work flow, 3-6 to 3-11

preparing a flow process chart, 3-8using flow process charts, 3-8 to 3-11

safety precautions, 3-29ship’s service organization, 3-1 to 3-5

organization charts, 3-2 to 3-5billet assignment chart, 3-5combination chart, 3-5functional chart, 3-3 to 3-4structural chart, 3-3

organization planning, 3-2dynamic aspects, 3-2mechanical aspects, 3-2

principles of organization, 3-2Meter readings, 6-23

I-3

N P

Navy Resale and Services Support Office(NAVRESSO), 2-7 to 2-10

Navy supply system, 2-1 to 2-11Defense Logistics Agency, 2-1 to 2-3

defense supply centers, 2-1 to 2-2ownership and distribution, 2-2replenishment requirements, 2-2supply management, 2-2

DLA distribution system, 2-2 to 2-3distribution depots, 2-2 to 2-3specialized support depots, 2-3

Navy accounting and finance, 2-10 to2-11

fleet accounting and disbursingcenters, 2-10

Navy regional finance centers, 2-10personnel support activity detach-

ments, 2-10 to 2-11Navy Resale and Services Support Office

(NAVRESSO), 2-7 to 2-10how NAVRESSO assists ship’s stores

afloat, 2-9 to 2-10ship’s stores division, 2-8 to 2-9

branches, 2-8 to 2-9functions, 2-8

Navy Resale System, 2-7Navy supply system, 2-3 to 2-7

inventory control points (ICPs), 2-4to 2-5

Naval Supply Systems Command, 2-3to 2-4

determination of requirements,2-3 to 2-4

distribution of stock, 2-4procurement of materials, 2-4

Navy distribution system, 2-5 to 2-7mobile logistics support force,

2-7Navy supply centers and Navy

supply depots, 2-6 to 2-7Navy retail offices, 2-5

O

On-the-job training, 3-16Organization charts, 3-2 to 3-5

billet assignment chart, 3-5combination chart, 3-5functional chart, 3-3 to 3-4structural chart, 3-3

Overseas contract bulletins, 4-17 to 4-18

Personnel management, 3-14 to 3-19assignment of duties, 3-15delegation of authority, 3-15 to 3-16training your staff, 3-16 to 3-17your ability as a leader, 3-19your ability as a supervisor, 3-17 to 3-19

PMS schedules, 3-23 to 3-24cycle schedule, 3-23quarterly schedule, 3-23 to 3-24weekly schedule, 3-24

Policy signs, 3-22 to 3-23

Price changes, 5-12 to 5-13Pricing and marking of merchandise, 6-7 to

6-8Procurement, 4-1 to 4-26

auditing procurement records, 4-19 to4-22

distribution, 4-21maintenance of logs, 4-21 to 4-22procurement document reviews, 4-19

to 4-21purchase operation reviews, 4-19

authorized merchandise, 4-1 to 4-4foreign merchandise for special

orders, 4-3foreign merchandise for stock, 4-2

to 4-3limitations, 4-3 to 4-4

prohibited items, 4-4qualitative limits, 4-3quantitative limits, 4-3unlisted items, 4-3 to 4-4

U.S. merchandise for special order,4-1 to 4-2

U.S. merchandise for stock, 4-1procurement of equipment and operating

supplies, 4-22 to 4-23major equipment, 4-22minor equipment, operating supplies,

and services, 4-22 to 4-23procurement methods, 4-22 to

4-23procurement sources, 4-23

procurement on ships without SupplyCorps officers, 4-24 to 4-26

procurement resources and methods forship’s store stock, 4-14 to 4-19

ashore supply activities, 4-16standard Navy clothing, 4-16unusual sizes of Navy clothing,

4-16

I-4

Procurement—Continued R

procurement resources and methods forship’s store stock—Continued

purchases, 4-17 to 4-19cash purchases, 4-18dealing with sales representa-

tives, 4-18 to 4-19Navy exchanges, 4-18open purchase, 4-18overseas contract bulletins, 4-17

to 4-18simplified requisition and pur-

chase procedure, 4-18Ship’s Store Afloat Catalog, 4-16Ship’s Store Contract Bulletins,

4-15 to 4-16transfers, 4-16 to 4-17

from excess stock lists, 4-17from other appropriations, 4-17from other departments aboard

ship, 4-17from other supply officers, 4-17from resupply sources, 4-17

stock control, 4-4 to 4-13authorized inventory and increases,

4-5inventory control records, 4-5 to

4-11inventory control for ship’s

store stock, 4-8 to 4-9inventory control record for

standard Navy clothing stock,4-9 to 4-11

stock record review and maintenance,4-11 to 4-13

mechanical errors, 4-11procedural errors, 4-11 to 4-13

stocking the ship’s store, 4-13 to4-14

crew preference, 4-13ship’s deployment, 4-14technical assistance, 4-13 to 4-14

Consolidated Afloat Requisition-ing Guide Overseas (CARGO),4-13 to 4-14

NAVRESSO/fleet assistancerepresentatives, 4-14

NAVRESSO Publication No. 81,4-13

Procurement methods, 8-13 to 8-16

Publications and directives, 3-21 to 3-22

Receipts, 8-12 to 8-13

Receipts and expenditures, 5-1 to 5-25expenditures, 5-8 to 5-24

auditing expenditures, 5-18 to 5-22distribution, 5-22posting, 5-22preparation, 5-18 to 5-22

expenditures of other supplies, 5-22to 5-24

issues, 5-22 to 5-24transfers, 5-24

supervising expenditures, 5-8 to 5-18claims for reimbursement for

personal property, 5-14disposal of foreign merchandise,

5-14disposition of excess stock, 5-14issues, 5-9miscellaneous transactions, 5-14

to 5-18price adjustments for standard

Navy clothing, 5-13 to 5-14price changes, 5-12 to 5-13sales, 5-12surveys, 5-9 to 5-12transfers, 5-8 to 5-9

expenditures on ships without SupplyCorps Officers, 5-24 to 5-25

issues, 5-25sales to Navy exchanges, 5-25surveys, 5-25

receipts of stock on ships without SupplyCorps officers, 5-7 to 5-8

distribution, 5-8posting, 5-8shortages in shipment, 5-7 to 5-8

receipts, 5-1 to 5-7auditing receipts, 5-4 to 5-6

discounts, 5-5 to 5-6distribution to files, 5-6fast pay procedures, 5-6posting, 5-5processing dealers’ bills, 5-5processing receipt documents,

5-4 to 5-5breakouts, 5-7preparation for receipt, 5-1 to 5-2

authorized inspection, 5-1bulk storeroom, 5-2date and time of delivery, 5-1routing plan, 5-1 to 5-2working party, 5-1

I-5

Receipts and expenditures—Continuedreceipts—Continued

stowage, 5-6 to 5-7supervising receipts, 5-2 to 5-4

receipts directly into the ship’sstore, 5-2 to 5-3

receipts of bonus-free items, 5-4receipts of partial shipments, 5-3

to 5-4receipts of shipments without

invoices, 5-4receipts on board ship, 5-2short, excess, or damaged ship-

ments, 5-3Records and returns, 7-1 to 7-34

analysis of ship’s store operations, 7-26to 7-30

external analysis, 7-29 to 7-30FAADC analysis, 7-29NAVRESSO analysis, 7-29 to

7-30internal analysis, 7-26 to 7-29

markups, 7-27operation expenses, 7-27sales-stock ratio, 7-26 to 7-27Ship’s Store Profits, Navy, 7-28

to 7-29vending machines, amusement

machines, and dollar billchangers, 7-27 to 7-28

auditing returns, 7-14 to 7-26assembling and substantiating the

returns, 7-19 to 7-26arrangement of original and

retained returns, 7-24disposition of retained returns,

7-26forwarding of original returns,

7-25 to 7-26make up of original (forwarding)

and retained records, 7-24delay and delinquency, 7-14merged returns, 7-14Ship’s Store Balance Sheet and

Profit and Loss Statement, 7-14to 7-19

additional requirements, 7-18certification statement, 7-18distribution of the NAVCOMPT

153, 7-18 to 7-19Expenditures caption, 7-14 to

7-17Profit and Loss Statement (Ex-

penditures section), 7-17 to7-18

Records and returns—Continuedauditing returns—Continued

Ship’s Store Balance Sheet andProfit and Loss Statement—Con-tinued

Profit and Loss Statement (Re-ceipts section), 7-17

profit computations, 7-18Receipts caption, 7-14

auditing techniques, 7-6 to 7-14auditing closeout, 7-6 to 7-14

Journal of Expenditures, 7-10to 7-14

Journal of Receipts, 7-10Ship’s Store Afloat Financial

Control Record, 7-8 to 7-10stock record cards, 7-6 to 7-8

inventories, 7-2 to 7-6definition and purpose, 7-3mid-accounting period inventory, 7-6preparation for inventory, 7-3 to 7-4

advance recording, 7-4inventory sheets, 7-3 to 7-4inventory teams, 7-3scheduling, 7-4

supervision of procedures, 7-4 to 7-6actual count, 7-4extending and summarizing the

inventories, 7-6first count, 7-4inventory affidavit, 7-5price line inventory, 7-5reconciliation of the first and

second counts, 7-5second count, 7-5security, 7-5verification of stock records, 7-5

to 7-6operational objectives, 7-30 to 7-31ship’s store profits, 7-1 to 7-2

charges against ship’s store profits,7-2

general fund, 7-1 to 7-2recreation fund, 7-2

ships without Supply Corps officers,7-32 to 7-34

closeout of records, 7-32closing out the cashbook, 7-32closing out the NAVSUP 209,

7-32inventories, 7-32preparation of the Financial Control

Record, 7-32 to 7-37Recreation fund, 7-2References, AVI-1 to AVI-2

I-6

Reimbursement for personal property, claimsfor, 5-14

Resale System, Navy, 2-7Retail Operation Management (ROM) system,

9-1 to 9-2objectives and purposes, 9-1 to 9-2personnel who will be involved in ROM,

9-2

S

Sales floor, 8-17 to 8-19

Salesroom supervision, 6-1 to 6-17salesroom supervision on ships without

Supply Corps officers, 6-13 to 6-17ship’s store operation, 6-6 to 6-13store operator, 6-1 to 6-2visual merchandising, 6-2 to 6-6

Ship’s Serviceman rating, 1-1 to 1-3

Ship’s Store Afloat Catalog, 4-16

Ship’s Store Afloat Financial Control Record,7-8 to 7-10

Ship’s Store Contract Bulletins, 4-15 to 4-16

Ship’s store management objectives, AV-1 toAV-11

Ship’s store operation, AIII-1 to AIII-8

Ship’s store operations, 6-1 to 6-28fountain or snack bar supervision, 6-24 to

6-28cost controls, 6-24 to 6-27sanitation, 6-27 to 6-28

safety precautions, 6-28salesroom supervision, 6-1 to 6-17

salesroom supervision on shipswithout Supply Corps officers,6-13 to 6-17

ships store operation, 6-6 to 6-13authorized patrons, 6-7cash handling, 6-8 to 6-10hours of operation, 6-7miscellaneous sales, 6-10 to 6-12pricing and marking of merchan-

dise, 6-7 to 6-8sanitation, 6-13security for ship’s store spaces,

6-12 to 6-13tax-free tobacco products, 6-10

store operator, 6-1 tocustomer service,selection, 6-1

6-26-2

Ship’s store operations—Continuedsalesroom supervision—Continued

visual merchandising, 6-2 to 6-6accessories, 6-5charging of display aids and

major and minor equipment,6-5

equipment and facilities, 6-4modernization, 6-4 to 6-5principles, 6-2 to 6-4signs, 6-5 to 6-6

vending machine supervision, 6-18 to 6-24mechanical problems, 6-18servicing problems, 6-18vending machine cost controls, 6-18

to 6-24can-type drink vending

machines, 6-22cup-type drink vending machine,

6-19 to 6-22dollar bill changers, 6-24electronic amusement machines,

6-23 to 6-24meter readings, 6-23other types of vending machines,

6-22

Snack bar or fountain supervision, 6-24 to6-28

Stock control, 4-4 to 4-13

Stock, management of, 8-4 to 8-17authorized stock objectives, 8-4 to 8-10inventory, 8-16 to 8-17procurement methods, 8-13 to 8-16receipts, 8-12 to 8-13special stock items and legal restrictions,

8-11 to 8-12stock control systems, 8-10stock review and customer requests, 8-10

to 8-11

Stock record cards, 7-6 to 7-8

Suggested supply management inspectioncheck-off list, AII-1 to AII-17

Supply management inspection, 3-25

Supply system, Navy, 2-1 to 2-11

T

Tobacco products, tax-free, 6-10

I-7

V W

Vending machine supervision, 6-18 to 6-24Warehouse and distribution centers, 8-14mechanical problems, 6-18

servicing problems, 6-18 to 8-16

vending machine cost controls, 6-18 to Work schedules, establishing, 3-11 to6-24 3-14

1-8

Assignment Questions

Information: The text pages that you are to study areprovided at the beginning of the assignment questions.

Assignment 1

Textbook Assignment: “Navy Supply System and Management.” Pages 2-1 through 3-6.

Learning Objective: Recognizethe general organization,mission, and functions of theNaval Supply Systems Command(NAVSUP) and the DefenseLogiotics Agency (DLA).

1-1. The term “supply system” collectivelyrefers to which of the followingorganizations and/or field activities?

1. Navy Resale and Services SupportOffice (NAVRESSO)

2. Defense Logistics Agency (DLA) only3. Naval Supply Syatems Commend (NAVSUP)

only4. Defense Logistics Agency (DLA) and

Naval Supply Systems Command (NAVSUP)

1-2. The first and foremost mission of theintegrated Navy/Defense Logistics DefenseSystem is to provide

1. strategic locations for materials2. materials through civilian contractor3. optimum economy4. responsive support to the operating

forces

1-3. Which of the following defense supplycentere controls medical supplies andclothing?

1. Defense Personnel Support Center,Philadelphia, Pa.

2. Defense Industrial Supply Center,Philadelphia, Pa.

3. Defense General Supply Center,Richmond, Va.

4. Defense Construction Supply Center,Columbus, Oh.

1-4. The basic function of the defense supplycenters is inventory management.

1. True2. False

1-5. In computing the replenishmentrequirements of an item, a defense supplycenter will take into account which of thefollowing factors?

1. Information furnished by vendorsfrom past requirements

2. Past demand for items3. Information that is furnished by the

defense supply centers4. Program information furnished by each

military service and past experienceof each center

1-6. What activity(ies) control(a) thewholesale distribution of stock among thefour military services?

1. Defense supply centers2. Federal Supply Agency3. Navy Finance Center4. Navy Resale and Services Support

Office

1-7. All stocks controlled by a defense supplycenter are financed by what fund?

1.2.3.4.

Navy Stock FundDefense Stock FundDefense Industrial FundA prorated portion of the stockfund for each military service

1-8. What is the primary function of a DLAdistribution depot?

1.

2.

3.

4.

To issue and receive materiala fromdefense supply centersTo serve as a storage point for (DLA)meterialsTo receive requisitions directly endto issue stock locallyTo provide training and assistance inthe diatrubution of materiala in theNavy Supply System

1-9. Distributionrequisitions

1. True2. False

depots can acceptin cases of emergencies.

1

1-10. The DLA’s principal distribution depots 1-16. Under the Navy Supply System, allare located in what cities? materials fall under the heading

“replenishment”1.

and can be immediatelyMechanicaburg, PA; Memphis, TN; Ogden, replenished.UT; and Tracy, CA

2. San Diego, CA; Norfolk, VA; Pensacola, 1. TrueFL; and Mayport, FL

3. Oakland, CA; Long Beach, CA; andCubic Point, PI

4. Long Beach, CA; Memphis, TN; Ogden,UT; and Tracy, CA

1-11. To provide direct support to the Navy,the DLA has established what total numberof specialized support depots (SSDs)?

1. One2. Two3. Five4. Four

1-12. The DLA specialized support depot(s)is/are the Navy supply center(s) locatedin which of the following cities?

1. San Diego, CA only2. Long Beach, CA and Norfolk, VA3. 0akland, CA and Norfolk, VA4. San Diego, CA and Long Beach, CA

1-13. The Navy Supply System is integratedwith which of the followingorganizations?

1. Federal Supply Agency2. Navy Ships Parts Control Center

(SPCC)3. Defense Logistics Agency4. Navy Resale and Services Support

Office

1-14. The Naval Supply Systems Command isresponsible for the development andsupervision of the Navy Supply System.

1. True2. False

1-15. You are determining materialrequirement, for your shop. Which ofthe following references will provide youwith the best resources?

1. Ship’s Store Afloat Catalog andstock record cards

2. Coordinated Shipboard AllowanceList (COSAL) only

3. Stock record cards and areacontract bulletins

4. COSAL and Ship’s Store Afloat Catalog

2. False

1-17. In the Navy Supply System, there arefive phases of distribution. What isthe first phase?

1. Storage2. Transportation3. Control4. Accumulation of material at CONUS

bases

1-18. The Navy Supply System has what totalnumber of inventory control points (ICPs)?

1. Five2. Two3. Three4. Four

1-19. One of the Navy Supply System inventorycontrol points is the Navy AviationSupply Office (ASO). Where is thisactivity located?

1. Mechanicsburg, PA2. Philadelphia, PA3. Great Lakes, IL4. Alexandria, VA

1-20. The current list of cognizance symbolsand their associated inventory managercan be found in which of the followingpublications?

1. NAVSUP Manual, Volume II, and NAVSUPP-485

2. NAVSUP Manual, Volume II, and NAVSUPP-487

3. NAVSUP P-485 and NAVSUP P-4874. COSAL and NAVSUP P-487

1-21. All inventory control point is under thejoint control of what twoorganizations?

1. Naval Supply Systems Command andthe Fleet Material Support Office

2. Naval Ship Systems Command and theNavy Ships Parts Control Center

3. NAVSUP and the responsible systemscommend

4. Navy Comptroller Office and FleetMaterial Support Office

2

1-22. Inventory control points perform all ofthe Following functions EXCEPT

1. receiving appropriate quantities ofmaterials

2. controlling procurement3. maintaining close liaison with the

systems command4. maintaining warehouses for materials

received

1-28.

1-29.1-23. In managing Navy-owned retail items

under DLA control, Navy retail offices(NROs) are restricted to what facet ofinventory management?

1. Storage2. Financial3. Procurement4. Replenishment

1-24. The Navy’s two Navy retail officesare located in what cities?

1. Washington, DC and Mechanicsburg,PA

2. San Diego, CA and Washington, DC3. Norfolk, VA and Odgen, UT4. Mechanicsburg, PA and Norfolk VA

1-25. The Navy Fleet Material Support Officeis responsible for retell stocks ofDLA/GSA items.

1. True2. False

1-26. The Navy’s distribution system is made upof what total number of activities?

1. Five2 Two3. Three4. Four

1-27. What two major types of activities inthe Navy’s distribution system have theprimary mission of supply?

1. Navy Fleet Material Support Officeand Naval Supply Systems Command

2. Navy retail offices and NavalFacilities Engineering Command

3. Naval supply centers and navalsupply depots

4. Federal Supply Agency and navalsupply centers

1-30.

1-31.

1-32.

1-33.

1-34.

1-35.

Naval supply centers and naval supplydepots are responsible for which of thefollowing functions involving Navysupply materials?

1. Warehousing2. Distributing3. Controlling4. All of the above

The mobile logistics support forceships act as extension of the Navy’sdistribution system.

1. True2. False

Which of the following are strictlyNavy supply departments?

1. Naval shipyards2. Naval air stations3. Naval stations4. All of the above

As pert of their mission, which of thefollowing activities have to providespecialized supply support to the commandat which they are located?

1. Naval supply centers2. Naval supply depots3. Naval shipyards4. All of the above

Navy supply centers and Navy supplydepots were established for thecentralized administration of varioustypes of supply activities.

1. The2. False

Navy supply centers are based overseas.

1. True2. False

Navy supply depots are based in CONUS.

1. True2. False

Primary support responsibility for Navysupply centere and Navy supply depotscomes from what authority?

1. Federal Supply Agency (FSA)2. Naval Supply Systems Commend

(NAVSUP)3. Defense Supply Center (DSA)4. Defense Logistics Agency (DLA)

3

1-36.

1-37.

1-38.

The inventory control department of anNSC or NSD performs all the followingfunctions EXCEPT

1. determining requirements2. managing inventories3. controlling receipts4. issuing materials

Which of the following divisions of anNSD or NSC is NOT under the inventorycontrol department?

1. Receipt division2. Technical division3. Customer service division4. Disposal division

In the management of materials, thematerial department of an NSD or NDCplans and directs which of thefollowing functions?

1. Disposal2. Issue3. Storage4. All of the above

The following are two departments of a NavySupply center or depot. In items 1-39 through1-45, indicate in which department eachdivision would be found.

1-39.

1-40.

1-41.

1-42.

1-43.

1-44.

1-45.

1. Inventory control department2. Material Department

Storage

Purchase

Retail stores

Freight terminal

Requirements

Labor and equipment

Whose responsibility is it to keep thefleet supplied with fuel, food, generalstores, and services through underwayreplenishment?

1. Naval supply depots2. Fleet Material Support Office3. Mobile logistics support force4. Naval supply centers

INTO

A. Storage Division

B. Purchase Division

C. Requirements Division

D. Retail Stores Division

E. Receipt Control Division

F. Freight Terminal Division

G. Labor and Equipment Division

Figure 1A.

ANSWERING QUESTIONS 1-46 THROUGH 1-47, REFERFIGURE 1A.

1-46.

1-47.

1-48.

1-49.

The inventory control department of aNavy supply center or depot includeswhich of the follwing divisions?

1. B, C, and E2. B, D, and F3. D, E, and F4. E, F, and G

The material department of a Navysupply center or depot encompasseswhich of the following divisions?

1. A, B, C, and D2. A, C, E, and F3. A, D, F, and G4. B, D, E, and G

From which of the following types ofships should you obtainfood items?

1. Stores ship (AF)2. Feet combat support3. Destroyer/submarine4. Combat stores ships

frozen and dry

ships (AOE)tenders (AO/AS)(AFS)

Which of the follwing ships is NOTdesigned for mobile logistics support?

1. USS ACADIA (AD42)2. USS DULUTH (LPD6)3. USS POLLOX (AFS4)4. USS EVERGLADES (AD24)

4

1-50.

1-51.

1-52.

1-53.

Which of the following termsspecifically refers to a helicoptertransfer of materials or stores?

1. INREP2. VERTREP3. UNREP4. CASREP

Learning Objective: Identify thepurpose, general organization, andfunctions of the Navy Resale andServices Support Office (NAVRESSO)and delineate the major componentsof this system.

What is the overall purpose of the NavyResale System?

1. To provideforces

2. To provideattractive

3. To provideassistance

4. To provide

Support to the operating

personnel withfacilitiescommand support andto fleet ships storesauthorized patrons with

quality merchandise and services atreasonable prices

Learning Objective: Recognizethe principles you should followin the development of yourorganization’s structure includingthe purpose and functions of thevarious organizational charts.

Organizational planning is a process ofwhich of the following actions?

1. Identifying and grouping duties2. Defining and delegating authority3. Assigning responsibilities and

creating relationships4. All of the above

Which of the following factors areinvolved in good organizationalplanning?

1. Direct management and subordinatepersonnel

2. Mechanical aspects3. Dynamic aspects4. Both 2 and 3 above

1-54.

1-55.

1-56.

1-57.

In good organizational planning themechanical aspects deal exclusivelywith what facets of the organization?

1. The organization’s structure,functions, and tasks

2. Personalities of individuals3. Performance abilities of

individuals4. Human relations

Which of the following examplesrepresents an accurate application ofthe mechanical aspects of an office?

1. Charts are prepared that depict theoffice’s workload

2. Job performances of individuals areevaluated

3. personnel reports are prepared4. Training is provided for

individuals

The dynamic aspects of an organizationinvolve which of the follwing factors?

1. Abilities2. Interests3. Personalities4. All of the above

The resin purpose of preparingorganizational charts is for the managerto use these charts as a management tool.

1. True2. False

IN ANSWERING QUESTIONS 1-58 THROUGH 1-61,SELECT FROM COLUNN B THE TYPE OF ORGANIZATIONALCHART THAT MATCHES THE FUNCTION OR PURPOSEDESCRIBED IN COLUMN A.

A. PURPOSES B. CHARTS

1-58. May be used in a 1. Functionalsimple organization chartto show all compo-nents with their 2. Structuralfunctions and names chartof personnel assigned.

3. Combination1-59. Shows only the basic chart

arrangements of thecomponents and, in 4. Billetthe case of a ship’s assignmentservice organization, charta complete breakdownof all existing com-ponents, such asdivisions, branches,sections, or units.

5

A. PURPOSES B. CHARTS

1-60. Lists the components 1. Functionalof an organization chartwith the job titleand/or rank or grade 2. Structuraland names of personnel chartassigned.

3. Combination1-61. Lists the component chart

of an organization withthe major job tasks 4. Billetgrouped by similarity. assignment

chart

1-62. How should components or lines ofauthority be arranged in a structuralorganization chart?

1. Major components should be arrangedhorizontally in line with eachother

2. Subsidiary component should bearranged in a vertical planebeneath the major components

3. Lines of authority drawn betweencomponents should clearly indicaterelationships

4. All of the above arrangement maybe made

1-63. Which of the principles below should befollowed when job duties are listed ona functional chart?

1. Closely related functions must belisted under different component

2. Duties that are performedinfrequently need not be listedunder specific components

3. Each significant function must beprovided for within theorganization

4. Dissimilar functions may be listedunder one component

1-64. A billet assignment chart is sometimesreferred to as what other type ofchart?

1. Functional chart2. Structural chart3. Position chart4. Personnel assignment chart

1-65. The billet assignment chart is used tochow the assignment of personnel byname and division only.

1. True2. False

1-66. In a fairly simple organization, whichof the following charts can seine toshow all three aspects (components,functions, and personnel) of theorganization?

1. Billet assignment chart2. Structural chart3. Functional chart4. Combination chart

Learning Objective: Identifythe factors you should consider whenplanning a physical layout that willmake the most effective use of spaces,equipment, and personnel in the serviceand resale activities.

1-67. Which of the following factors shouldyou consider when doing a layoutanalysis?

1. Mission of the ship’s store orservice activity

2. Use of personnel3. Use of equipment4. All of the above

1-68. What specific information should beshown on a layout chart?

1.

2.3.4.

Office functions as they relate totasksWork production dataFloor plan of the work spacesBillet assignment requirements

1-69. Layout charts of work spaces aregenerally drawn on what scale?

1. 1 inch to a foot2. 1/2 inch to a foot3. 1 1/2 inch to a foot4. 1/4 inch to a foot

6

1-70. You are doing a layout analysis of work 1-73. In planning a layout of a retailspaces in the ship’s store. To obtain self-service activity, you shouldthe best arrangement for movable consider which of the followingfurniture and equipment, which of the factors?following methods should you use?

1.

2.

3.

4.

Make a list of the movablefurniture and equipment, and makerecommendation for placementbeside each itemMove the office furniture andequipment within the ship’s storespaces until you obtain the bestarrangementDraw the movable furniture andequipment to scale directly on thelayout chartUse templates fashioned fromcardboard or plastic and rearrangethe templates on the layout chartuntil you obtain the beatarrangement

1-71. A layout analysis in designed primarilyto improve the use of which of thefollowing resources of a facility orwork space?

1. Space2. Personnel3. Equipment4. All of the above

1-72. Convenient arrangement of equipmentwill enable your people to turn outmore work in a shorter time.

1. Proper and intelligent circulationof customer traffic throughout thestore

2. Placement of traffic-stopping,appealing displays

3. Adequate store protection frompilferage

4. All of the above

1-74. How wide should the aisle apace in aself-service ship’s store be?

1. 1 to 2 feet2. 2 to 3 feet3. 3 to 4 feet4. 4 to 6 feet

1-75. Which of the policies below should befollowed in the layout of aself-service store?

1. Aisle spaces should all be the samewidth

2. Other exits besides the check-outpoint(s) should be provided

3. Customers should be induced tocirculate the entire store beforereaching the check-out stand

4. All of the above

1. True2. False

7

Assignment 2

Textbook Assignment: “Management (continued) and Procurement.” Pages 3-7 through 4-5.

2-1.

2-2.

2-3.

Learning Objective: Identifythe procedures for flow processanalysis and determine the bestmethods for devising effectiveworkflow process charts forvarious resale and serviceactivities. Determine the factorsthat should be used in theestablishment of work schedules andoperating times for various resaleand service operations.

Whet information is listed on a flowprocess analysis?

1. Inventory of spaces and equipment2. List of functions as they relate to

tasks3. Work count for individual work items4. Sequence of steps that must be

performed in an operation

What total number of different symbols canyou use to identify the steps on a flowprocess chart?

1. Five2. Two3. Six4. Four

Which of the following factors should youconsider when establishing a laundryschedule?

1.

2.

3.4.

The amount of work to be processed ina given time frameThe number and competency of thepersonnel assignedPreference of the commendAll of the above

Figure 2A.

IN ANSWERING QUESTIONS 2-4 through 2.8, SELECTTHE FLOW CHART SYMBOL IN FIGURE 2A THATACCURATELY CORRESPONDS TO THE FUNCTION USED ASTHE QUESTION.

2-4. Transportation.

1. A2. B3. C4. D

2-5. Operation.

1. B2. C3. D4. E

2-6. Inspection.

1. E2. D3. C4. B

2-7. Delay.

1. D2. C3. B4. A

2-8. Storage.

1. D2. C3. B4. A

8

2-9. Normally, what total number of pounds oflaundry should your laundry facilityprocess per week per person?

1. 8 lb2. 16 lb3. 20 lb4. 24 lb

2-10. Laundry facilities should be adequate toprocess 16 pounds of finished work perweek per each chief petty officer orofficer.

1. True2. False

2-11. To get a rough idea of how much laundryyou may be required to process, you mustmultiply your crew size by what number?

1. 112. 163. 3.154. 24

You are laundry supervisor on the

USS ACADIA (AD42) which has 3000

members aboard. Two hundred are

chief petty officers and 130 are

officers.

Figure 2B

IN ANSWERING QUESTIONS 2-12 THROUGH 2-14,REFER TO FIGURE 2B.

2-12. What total number of pounds of laundryshould be processed weekly for yourship’e crew?

1. 20,000 lb2. 30,000 lb3. 72,000 lb4. 85,000 lb

2-13. What total number of pounds of laundrywill be processed for the chief pettyofficers and officers weekly?

1. 3000 lb2. 5000 lb3. 5280 lb4. 7920 lb

2-14. What total numberwill be processedaboard monthly?

1. 256,320 lb2. 275,520 lb3. 288,000 lb4. 320,800 lb

of pounds of laundryfor all members

2-15. The best laundry schedule is one thatprovides for

1. daily service2. service every other day3. biweekly service4. the requirements of the ship

2-16. Concerning each laundry lot, a goodlaundry schedule should include whichof the following items of information?

1. Hour of pickup and the day and hourof delivery

2. Type of lot and the personnel whodelivered it

3. Individuals and groups to whom thelot belongs

4. All of the above

2-17. The primary purpose for the use of theappointment system for the schedulingof appointments in the barbershop is toprovide

1. the barbers with ample time forcleaning their tools betweenappointments

2. division officers and pettyofficers better control when dealingwith personnel

3. better service for barbershoppatrons

4. the barber with the opportunity tooverschedule appointments in caseappointients are missed

2-18. In scheduling haircuts in thebarbershop, you should consider whichof

1.2.

3.4.

the following factors?

The number of personnel aboardThe number and competency ofbarbersThe daily workload of each barberAll of the above

9

2-19.

2-20.

2-21.

2-22.

2-23.

2-24.

2-25.

The barbershop appointment scheduleshould be designed so that the numberof patrons who must wait for a barberdoes NOT exceed what maximum number perbarber?

1. One2. Two3. Three4. Four

A barber can usually give asatisfactory haircut in what totalnumber of minutes per patron?

1. 10 minutes2. 15 minutes3. 20 minutes4. 30 minutes

In an 8-hour day, a busy barber shouldnormally be able to complete what totalnumber of haircuts?

1. 192. 243. 304. 36

Which of the following systems is/arerecommended for the scheduling ofappointment in the barbershop?

1. Appointment system2. Division schedule3. Both 1 and 2 above4. Quarterly schedule

In the appointment system, what personshould maintain the appointment sheets?

1. Barber2. Senior barber3. Barbershop supervisor4. Division leading petty officer

In the division schedule system, whatperson controls the scheduling ofappointments in the barbershop?

1. Barber2. Barber supervisor3. S-3 division officer4. Division petty officer

Barbershop appointment sheets shouldbe retained in the barbershop for whatmaximum period of time?

1. 1 week2. 2 weeks3. 3 weeks4. 4 weeks

2-26. In addition to other reasons, thebarbershop supervisor should save allappointment sheets in case personnelcomplain about not being able to gethaircut appointments and because somemembers who fail inspection might tryto claim that they really did receivehaircuts in the barbershop beforeinspection.

1. True2. False

Learning Objective: Recognize theways in which managers determine ifmanpower is being used effectivelyin work assignments.

2-27. Which of the following statementsrepresents a principle of organizationand a personnel management guideline agood supervisor should follow?

1. Duties must never be assigned tospecific individuals

2. Obscure jobs should not be assignedas responsibilities

3. Infrequent jobs should never beassigned until the last minute

4. Each duty that must be performedshould be assigned to a specificindividual in the organization

2-28. When individuals are assigned to jobs,they should have a thorough knowledge ofall of the procedures required.

1. True2. False

2-29. When you have your best person do allthe work, which of the followingmeasures are you taking?

1. Penalizing the person for being agood, dependable worker

2. Rewarding the parson by letting theperson take on more responsibility

3. Putting the person in a position tobe liked by everyone

4. Making other Individuals dislike theparson

Learning Objective: Recognize howauthority is delegated through fairand responsible leadership anddetermine the circumstances underwhich delegation of authorityshould take place.

10

2-30.

2-31.

2-32.

2-33.

2-34.

2-35.

The principle of unity of commendstates that the final responsibilityand authority at each level rest withone person.

1. True2. False

As a supervisor, you must remember thatauthority should be commensurate withwhich of the following attributes?

1. Respect2. Responsibility3. Accountability4. Knowledge

You should delegate authority as fardown the chain of commend as possiblewithout loss of control over policy orprocedure.

1. True2. False

Delegation of authority relievessuperiors of overall responsibility.

1. True2. False

Which of the following recommendationwill provide good guideline foreffective delegation of authority?

1. Provide clearly stated policyguideline

2. Select capable subordinates3. Set up proper controls4. All of the above

Learning Objective: Identify thecategories into which types ofstock items procured for resale ina ship’s store are divided, andidentify the methods used forauthorization of merchandise forresale.

Ship’s store merchandise is basicallydivided into what total number ofcategories?

1. One2. Two3. Three4. Four

2-36.

2-37.

2-38.

2-39.

2-40.

2-41.

2-42.

Most of the stock that is ordered byship’s store is included in which of thefollowing categories?

1. U.S. merchandise for stock2. U.S. merchandise for special order3. Foreign merchandise for stock4. Foreign mechandice for special order

The Ship’s Store Afloat Catalog ispublished by which of the followingorganizations?

1. Navy Finance Center2. Defense Logistics Agency3. Navy Resale and Services Support

Office4. Government Accounting Office

Which of the following resources is/are(a) tool(s) used in procurement of chip’sstore stock?

1. NAVSUP P-4872. Ship’s Store Afloat Catalog3. Ship’s Store Contract Bulletin4. All of the above

Items for special orders are generallycarried in stock.

1. True2. False

What officer can direct the ship storeofficer to collect for special orders inadvance?

1. Division Officer2. Supply officer3. Executive officer4. Commending officer

A special order certification includes allEXCEPT which of the following informationconcerning the person, who is placing theorder?

1. Name2. Division3. Grade or rate4. Time in service

What cost limitation associated with anauthorized item of U.S. merchandiseapplies to special orders for this item?

1. $500 per unit cost of the item2. The ability of the patron to pay3. The same limitation that applies for

all such items held in stock4. The same limitation that is shown in

the Ship’s Store Afloat Catalog or theAuthorized Stock List for the item

11

2-43. Items listed in the Ship’s Store Afloat 2-49.Catalog for special orders should also beordered for stock.

1. True2. False

2-44. Standard Navy clothing items of unusualsizes on special orders are procured forwhich of the following reasons/persons?

1. For stock during deployment only2. For special order stock only3. For individuals only4. For engineer repay teams only

2-45. Procurement of gold rating badges andservice stripes on special orders forpatrons is limited to E-7s and above.

1. True2. False

Learning Objective: Identify theappropriate procedures for theprocurement of foreign and U.S.merchandise.

2-46. When are you allowed to stock foreignmerchandise?

1. When your ship is outside the3-mile limit only

2. During your ship’s deployment only3. When your ship is in the local area

of operation only4. Anytime as long as limitations are

observed

2-47. For the Pacific Fleet Foreign MerchandiseProgram, warehouses of foreignmerchandise have been established inYokosuka, Japan and Subic Bay, Republicof the Philippines.

1. True2. False

2-48. Procurement of which of the followingitems of foreign merchandise isprohibited for ship’s stores afloat?

1. Furs2. Autos3. Wines4. All of the above

2-50.

2-51.

2-52.

2-53.

Foreign merchandise from approvedcommunist-controlled areas can beprocured within specific limitations.

1. True2. False

Stocks of foreign merchandise in theship’s store may present a problem thatis not associated with U.S. merchandisefor which of the following reasons?

1. Foreign merchandise does not have thesales appeal of U.S. merchandise

2. Losses resulting from markdowns offoreign merchandise must be absorbedby the ship’s store

3. Foreign merchandise must be disposedof before the ship returns to the U.S.

4. Foreign merchandise cannot betransferred to other ships

Which of the following guidelines canhelp you avoid being overstocked withforeign merchandise?

1. Consult and use the NAVRESSObulletins

2. Estimate carefully the potentialsales

3. Obtain all foreign merchandise early4. All of the above

Your ship will leave Marseilles, France,for Pensacola, Florida, on 10 June afteroperating in the area for over 90 days.What is the latest date that you shouldschedule delivery of foreign merchandisein Marseilles other than special orderitems for members of the crew?

1. 1 May2. 20 May3. 30 May4. 10 May

Your ship is operating in an overseasarea from May 1 to May 28. Whatlimitation must you observe for procuringforeign merchandise?

1. Cash basis only2. Special orders only3. Commanding officers cost limitations

only4. Substitution of like items of U.S.

merchandise only

12

2-54.

2-55.

2-56.

2-57.

2-58.

2-59.

By what means can SH2 Lisa Rankin procureforeign merchandise while her ship is inPensacola, Florida?

1. Special orders through the ship’sstore

2. Special orders through the local Navyexchange

3. Special orders through the exchangemail order program

4. Program orders through NAVRESSOrepresentative

The advantage of making customers awareof using the exchange mail order programis the opportunity for your ship toreceive rebate checks.

1. True2. False

At lest how often does NAVRESSOdistribute rebate checks to shipsparticipating in mail order sales?

1. Monthly2. Quarterly3. Triennially4. Annually

Rebate checks go directly to ship’s storeprofits, Navy, as which of the followingtypes of receipts?

1. Refund2. Contribution3. Gain by Inventory4. All of the above

In addition to general limitations thatapply to all merchandise, qualitativelimits are specified for which of thefollowing types of merchandise?

1. Cameras2. Jewelry3. Sun glasses4. Leather goods

Which of the following items is/are NOTauthorized for stock and sale throughship’s store?

1. Beer2. Wallets3. Nail files4. Sunglasses

2-60. Authorized items of stock such aslighters, cups, and stationery that bearyour ship’s identification should belimited to what total number of days ofstocks?

1. 1202. 603. 304. 90

2-61. You should limit stock with your ship’sidentification to what maximumpercentage of your ship’s totalcomplement?

1. 10%2. 20%3. 25%4. 40%

2-62. What limiting factor applies to thequantity of tax-free tobacco products youmay stock?

1. Anticipated sales for 90 days2. Sales of the previous 90 days3. Anticipated sales while your ship is

beyond the 3-mile limit4. Anticipated sales to 40 percent of

your ship’s complement

Learning Objective: Recognize thecycle used by the Navy for effectivestock control, and identify howstock turn affects the senior Ship’sServicemen as a buyer.

2-63. The primary purpose of effective stockcontrol in a ship’s store is to ensure astock level that will accomplish which ofthe following objectives?

1. Keep the storeroom full at all times2. Provide most of the essential items

most of the time3. Generate maximum sales with minimum

inventory4. Offer a complete range of all

authorized items

2-64. Procurement of chip’s store stock isfinanced by what source?

1. Current year’s appropriation2. Navy Stock Fund3. Ship’s Store Profits Navy4. Profile from each individual store

13

2-65.

2-66.

2-67.

2-68.

2-69.

In a ship’s store afloat, what primaryfactor(s) determine(s) the amount ofinventory?

1. Procurement2. Markups3. Surveys4. Sales

In a ship’s store, profits on sales aredetermined by which of the followingfactors?

1. The amount of markup over cost on theitems sold

2. The value total inventory3. The volume of sales4. The total inventory value of the

retail store

Your failure to maintain sufficient stockon board will ultimately result indecreased sales for your ship’s store.

1. True2. False

NAVRESSO recommence that you maintainwhet optimum ratio of sales to stock atcost price to your beginning inventoryfor each 4-month accounting period?

1. 1.20 to 12. 1.50 to 13. 1.10 to 14. 1.33 to 1

“Stock turn” simply means that a 90-dayssupply of stock should “turn over” oneand one-third times in a period of whetmaximum number of days?

1. 3602. 1203. 1804. 90

2-70. An accounting period covers how manymonths?

1. 62. 23. 34. 4

2-71. You can obtain your stock turn figure byusing what formula?

1. By multiplying cash sales by openinginventory

2. By dividing opening inventory by cashsales

3. By dividing expenditures by openinginventory

4. By subtracting cash sales from openinginventory

IN ANSWERING QUESTIONS 2-72 THROUGH 2-74,SELECT THE STOCK TURN FIGURE IN COLUMN B THATCORRECTLYINVENTORYQUESTION.

A.

2-72.

2-73.

2-74.

CORRESPONDS TO THE EXPENDITURES/OPENINGFIGURES LISTED IN COLUMN A FOR EACH

EXPENDITURES/ B. STOCK TURNOPENING INVENTORY

$8,000 $6,000 1. 1.54

$7,400 $6,200 2. 1.40

$16,000 $10,400 3. 1.33

4. 1.19

2-75. Optimum stock level (inventory) isdefined as an optimum supply of stock tocover what total number of days?

1. 902. 1203. 1804. 365

14

Assignment 3

Textbook Assignment: “Procurement (continued) and Receipts and Expenditures.” Pages 4-5 through 5-4.

Learning Objective: Determine theauthorized inventory and allowancesfor a ship’s store afloat.

3-1. The basic initial authorized inventoryallowance for ship’s store stock isnormally based upon which of thefollowing factors?

1. Size of the ship2. Onboard personnel count3. Preference of ship’s store personnel4. All of the above

3-2. In the basic initial authorized inventoryallowance, what maximum amount of moneyis generally allowed par person per monthfor procurement of stock?

1. $122. $183. $254. $28

3-3. The basic initial authorized Inventoryallowance per person per month providesfor what maximum number of months ofship’s store stock?

1. 12. 23. 34. 4

3-4. Service ships, such as ASS, ADs, and ARs,are authorized extra monies per personper month to support ship’s storecustomers. What maximum amount of moneyper person per month represents thisauthorized increase?

1. $62. $93. $104. $18

3-5.

3-6.

3-7.

3-8.

3-9.

When your ship is deployed, what maximumadditional amount of money per person permonth represent the authorized increase?

1. $102. $123. $154. $18

Procurement of foreign merchandise forship’s store stock should be consideredas an authorized addition to the ship’sstore inventory

1. True2. False

Which of the follwing items of stockshould be considered as a separateauthorized increase to your inventorywhether the ship is deployed or in CONUS?

1. Tax-free cigarettes2. Canned sodas3. Stereos over $5004. Hobby items

When your inventory limitation isincreased for deployment, you should senda letter to NAVRESSO with a copy to thetype commander.

1. True2. False

When your ship’s inventory limitation isincreased for deployment purposes, theassociated letter of explanation shouldcontain which of the follwinginformation?

1. Monetary value of this increase2. Reason for the Increase3. Period of time the increase will

cover4. All of the above

15

3-10.

3-11.

3-12.

3-13.

3-14.

When your ship is deployed, the ship’stotal authorized inventory should includewhich of the following amounts?

1. Original authorized inventory2. Canned soda inventory3. An additional $18 per person per

month4. All of the above

Learning Objective: Determine how toanalyze the inventory control records andhow to make associated recommendations tothe chip’s store officer.

The control record is the tool that ship’sstore managers use in maintaining arunning check on working capitalavailable for purchase of new stock.

1. True2. False

Normally, the two inventory controlrecords you should use are the InventoryControl Record for Ship’s Store Stock andthe Inventory Control Record for StandardNavy Clothing Stock.

1. True2. False

Under which of the followingcircumstances can you include standardNavy clothing on the Inventory ControlRecord for ship’s store stock?

1. When your inventory balance forstandard Navy clothing exceede $300

2. When you cell standard Navy clothingthrough the same cash register used forship’s store stock

3. When your inventory balance forstandard Navy clothing is less than$300 and sales are less than $300 amonth

4. Both 2 and 3 above

Generally, your inventory control recordfor ship’s store stock should bemaintained at least how often?

3-15.

3-16.

3-17.

3-18.

3-19.

A 15% markup in the actual cost price ofeach item of stock is currently beingused in ship’s stores afloat. If theactual cost of stock item is $100,determine the retail price of the stockitems.

1. $ 872. $1053. $1154. $125

A careful review of which of the followingdocumentation should provide you withvaluable information concerning thehistory of sales and ordering data youwill need for future procurement of anitem of ship’s store stock.

1. Stock Record (NAVSUP Form 464)2. Armed Forces Measurement Plan (DD

Form 358)3. Afloat Shopping Guide4. Open purchase contract

You have just completed a review of thestock records for an item of ship’s storestock. Ideally, your maximum stockposition should represent the stock yourequire for what total number of days?

1. 902. 1803. 304. 60

You are supervising the maintenence ofthe stock record cards. The two types oferrors for which you should be on thealert are mechanical and proceduralerrors.

1. True2. False

A mechanical error results when facts andvalues have not been properly recorded onthe stock record card for an item ofstock.

1. True2. False

1. Quarterly2. Monthly3. Daily4. Weekly

16

3-20.

3-21.

3-22.

3-23.

Of the following errors concerning themaintenance of a stock record card for anitem of ship’s store stock, which one isconsidered to be a mechanical error?

1. The low limit for this item wasrecorded wrong

2. The ship’s store is out of this stockitem

3. The markings on this item are too high4. There is too much stock on hand of

the item

Learning Objective: Determine themethods and resources you should use forthe selection and procurement of chip’sstore stock.

When you are selecting merchandise forprocurement of stock for a ship’s storeafloat, which of the following factorsshould you consider?

1. Crew preference2. Operational schedules of your ship3. Special operating conditions4. All of the above

In selecting merchandise for the ship’sstore, which of the following resourcescan provide you with valuable technicalassistance?

1. NAVRESSO fleet assistanceRepresentatives

2. NAVRESSO Publication No. 813. Ship’s Store Afloat Catalog4. All of the above

You can acquire assistence from NAVRESSOby making e telephone request, visitinga fleet assietance office, and sending aletter request for an advisory.

1. True2. False

IN ANSWERING QUESTIONS 3-24 THROUGH 3-27, SELECTTHE APPROPRIATE DOCUMENT FROM COLUMN B THAT YOUSHOULD USE FOR ORDERING STOCK FROM PROCUREMENTSOURCE LISTED AS THE QUESTION IN COLUMN A.

3-24.

3-25.

3-26.

3-27.

A. PROCUREMENTSOURCE

Ship’s Store ContractBulletin for area

Ship’s Store AfloatCatalog

Ashore supplyactivity forstandardNavy clothing

Ashore supplyactivity forunusual sizesof Navy clothingfor men

B. PROCUREMENTDOCUMENTS

1. Order forSupplies orServices/Request forQuotations(DD Form 1155)

2. Armed ForcesMeasurementBlank (DDForm 358)

3. DOD SingleLine ItemRequisitionSystemDocument (DDForm 1348)

4. Requisitionand Invoice/ShippingDocument (DDForm 1149)

3-28. In regard to methods of procurement forship’s store stock, you can acquireship’s store merchandise either bypurchase from a commercial source or bytransfer.

1. True2. False

3-29. A transfer of stock takes place any timeyou submit requisitions to which of thefollowing sources?

1.2.

3.

4.

A commercial vendor of any typeAn ashore supply activity or anothermilitary organization or governmentagencyAnother naval vessel, supply officer,or department or section of your ownshipBoth 2 and 3 above

17

IN ANSWERING QUESTIONS 3-30 THROUGH 3-33, SELECT 3-37.FROM COLUMN B THE APPROPRIATE DOCUMENTATION(S)YOU MUST SUBMIT TO EFFECT A TRANSFER OF STOCKFROM THE PROCUREMENT RESOURCE LISTED IN COLUMN AAS THE QUESTION.

3-30.

3-31.

3-32.

3-33.

A. PROCUREMENT B. PROCUREMENTRESOURCES DOCUMENTS

Other supply officers 1. Order for Suppliesor Services/

From excess stock Request forlist Quotations (DD

Form 1155)From otherappropriations 2. DOD Single Line

Item RequisitionFrom other departments System Documentaboard your ship (DD Form 1348)

3. Either 1 or 2above asappropriate

4. Requisition andInvoice/ShippingDocument (DD1149)

3-34.

3-35.

3-36.

Before considering procurement of ship’sstore stock by purchase, you should firsttry to acquire the stock by transfer.

1. True2. False

When you use the overseas contractbulletins to purchase items of ship’s storestock, you should prepare and submit thepurchase orders in exactly the same way formerchandise that you would order throughwhich of the following other procurementsources?

1.

2.

3.4.

Ship’s Store Contract Bulletins forareas within CONUSAfloat supply activities for standardNavy clothingOther appropriations of your own shipOther departments of your own chip

When using the simplified requisition andpurchase procedure for purchase of ship’sstore stock, you most prepare and submitwhich of the following documents?

3-38.

3-39.

3-40.

3-41.1.

2.

3.4.

Requisition and Invoice/ShippingDocument (DD Form 1149)DOD Single Line Item RequisitionSystem Document (DD Form 1348)Either 1 or 2 above, as applicableOrder for Supplies orServices/Request for Quotations (DDForm 1155)

18

When other procurement resources are notavailable to you, you can purchaselimited quantities of authorized items ofship’s store stock from Navy exchanges.What form should you use to effect thistype of purchase?

1.

2.

3.

4.

Requisition and Invoice/ShippingDocument (DD Form 1149)DOD Single Line Item RequisitionSystem Document (DD Form 1348)Order for Supplies orServices/Requset for quotations (DDForm 1155)Armed Forces MeasurementForm

Wheneverpurchasestore.

1. True

358)

possible you shouldmethod for purchase

2. False

When dealing with commercial

Blank (DD

use the openof ship’s

sales repre-sentatives, which of the following guide-lines should you follow?

1. Avoid all contact with commercialsales representatives

2. Accept gifts and favors privately3. Set order time for contact with sales

representatives but strictly follow thepolicies set forth in the DOD Standardsof Conduct

4. Refer sales representatives toanother ship

Learning Objective: Determine theresponsibilities of the senior Ship’sServicemen for the auditing of procure-ment records and identify the appropriateprocedures to be used in the review ofprocurement documents.

One of the primary responsibilities ofthe senior Ship’s Servicemen isassisting the ship’s store officer in anaudit of the chip’s store’s records andreturns.

1. True2. False

All activities with purchase authoritymust undergo an external purchase opera-tion review at least how often?

1. Every year2. Every 6 months3. Every 3 months4. Every 18 months

3-42. In auditing the format of a completedprocurement document, you should check tosee that the document correctly includeswhich of the following information?

1. Required specific statements asneeded

2. Fast pay or other purchase agreementrequirements as applicable

3. Specific identification ofmerchandise

4. All of the above

IN ANSWERING QUESTIONS 3-43 THROUGH 3-46, SELECTFROM COLUMN B THE CORRECT DISTRIBUTION OF THEORIGINAL AND/OR COPY(IES) OF THE ORDER FORSUPPLIES OR SERVICES/REQUEST FOR QUOTATIONS (DDPORN 1155) LISTED IN COLUMN A AS THE QUESTION.FAST PAY PROCEDURES DO NOT APPLY.

3-43.

3-44.

3-45.

3-46.

A. DD FORMS 1155

Original only

One copy only(does not requiresignature)

One signed copyonly

All otherremaining copies

B. DISTRIBUTIONS

1. To vendor

2. To IncomingMaterial File

3. To OutstandingPurchase Order

4. To ExpenditureInvoice File

3-49.

3-50.

3-51.

File 3-52.

3-47. In a ship’s store afloat, all procurementdocuments must be logged to which of thefollowing records?

1. Requisition Log2. Purchase Order Log3. Either 1 or 2 above as applicable4. Stock Tally Log

Learning Objective: Recognize the ways inwhich the senior Ship’s Serviceman becomes 3-53.involved with the procurement of equipmentto be used in the resale and service areasof a ship’s store afloat

3-48. Major equipment is defined as having amonetary value greater than what amount?

1. $ 502. $ 903. $1004. $500

The procurement of major equipment thatincludes (major) laundry equipment,barber chairs, and cash registers iscontrolled directly by what specificauthority?

1. NAVRESSO2. NAVSEA3. NAVSUP4. NAVFAC

The installation of replacement vendingmachines that are greater in weight thenthe machines that are being replaced mustbe approved by what primary authority?

1. NAVSUP2. NRVSEA3. NAVRESSO4. NAVFAC

The installation of replacement vendingmechines that weigh the same or lessthan the mschines that are being replacedcan be approved by what authority?

1. NAVSUP2. NAVSEA3. NAVRFSSO4. NAVFAC

Which of the following monetary costvalues associated with a single unit ofequipment in a ship’s store or servicearea is/are included in the categoryreferred to as major equipment?

1. $1152. $ 963. $ 504. Both 2 and 3 above

Learning objective: Determine thepreparation requirements andprocedures for receipts of ship’sstore stock.

When ship’s store stock is to be receivedaboard ship, which of the following stepsrepresent the correct sequence to befollowed?

1. Preparation, inspection, relocatingstowage

2. Inspection, preparation, stowage,relocation

3. Stowage, relocation, preparation,inspection

4. Relocation, stowage, inspection,preparation

19

3-54.

3-55.

3-56.

3-57.

Which of the following conditions 3-58.represent the best time frame in terms of(a) your ship’s operational schedule; and(b) receipt of ship’s store stock onboard?

1. (a) Ship gets underway at 1000;(b) stock is received at 0600 the sameday

2. (a) ship arrives in port at 0800;(b) stock is received at 0900 the sameday

3.3-59.

(a) Ship arrives in port Friday andremains in port until the followingThursday;(b) stock is received 1000 on Tuesdaywhile the ship is in port

4. (a) ship arrives in port on 29 August(Monday) and departs 5 September(following Monday):(b) stock is received on 2 September(Friday) 3-60.

Before ship’s store stock arrives on board,you should notify what official as to thenumber of people you will need for aworking party?

1. Commanding officer2. Executive officer3. Division officer4. Weapons officer

In the case of large receipts of ship’sstore stock, which of the followingpersonnel should be assigned wheneverpossible to be spotters, checkers, andmembers of the working party?

1. All available chief petty officers2. Ship’s Servicemen3. Storekeepers4. Boatswain’s Mates

At the actual time of receipt ofship’s store stock, the bulk storeroomcustodian should be performing whichof the following duties?

1. Checking stock on the pier2. Rechecking stock control records

for the incoming stock3. Spot checking security points

along the route of the incomingstock

4. Standing by at the bulk storeroomand waiting to receive the stock

The leading Ship’s Serviceman or theship’s store officer should be on handto supervise the receipt of stock thatis delivered by which of the followingq eans?

1. Truck2. Helicopter3. Highline transfer4. All of the above

usually, what document is used as thereceipt paper for items received froma commercial dealer?

1. The dealer’s invoice2. The carrier’s bill of lading3. A copy of the procurement document4. A copy of the invoice prepared at

supply support activity

After assuming legal responsibilityof the stock received, the bulkstoreroom custodian should forward theaccountable documents to whatorganization or individual?

1. Contractor2. Supply center3. Ship’s store officer4. Supply officer

A. Laundry soap that was delivereddirectly to the laundry

B. Fountain pens that ware delivereddirectly to the retail

C. Cigarettes that were delivereddirectly to the levels storeroom

D. Razors that were delivereddirectly to the barbershop

Figure 3A

THE ITEMS LISTED IN FIGURE 1 REPRESENT ASHIPMENT OF SHIP’S STORE STOCK. INANSWERING QUESTION REFER TO FIGURE 3A.

3-61. For which of the following items of stockshould the ship’s store office recordschow that delivery was made to the bulkstoreroom?

1. A and C only2. B and C only3. A, B, and C only4. A, B, C, and D

20

3-62.

3-63.

3-64.

3-65.

3-66.

Direct breakouts to a sales or serviceactivity should be posted to which of thefollowing documents?

1. NAVSUP 4642. NAVSUP 9803. NAVSUP 2354. All of the above

In a combined operation of ship’s storestock direct turnover does not requiresecond copies of procurement documents.

1. True2. False

When you are inspecting receipts onunopened cartons from the factory forquantity, you can accept the quantityshown on the outside of the carton ascorrect.

1. True2. False

Learning objective: Determine thecorrect procedures to be followedin the receipt of shipments withshortages or excess stock.

If a receipt from another supply officeris short, which of the following actionsshould you take?

1. Forward a letter to the issuingactivity within 5 days of receiptexplaining the shortage

2. Expend the shortage by survey fromthe Navy Stock Fund (NSF)

3. Expend the shortage by survey fromShip’s Store Profits, Navy

4. Request the balance of the shipmentfrom the issuing activity

When a receipt is in excess, what documentshould the recordskeeper use to take upthe excess?

1. DD Form 2502. DD Form 11493. DD Form 11554. DD Form 1348-1

3-67. Your ship has received a short shipmentand you have requested a correcteddealer’s bill. Before processing theincorrect bill for payment, what totalnumber of days after notification shouldyou wait for the vendor to provide youwith a corrected bill?

1. 52. 103. 184. 20

3-68. On 3 June you received a partialshipment of merchandise from a commercialsource. By 13 June, you received threeadditional partial shipments, the lastcompleting the order. What maximumnumber of receiving numbers should youassign to this order?

1. One2. Two3. Three4. Four

3-69. Which of the following documents ismaintained as a record of receipts?

1. NAVUP Form 9782. NAVSUP Form 9773. NAVSUP Form 2384. NAVSUP Form 235

3-70. When a shipment is received withoutshipping papers, what form should you useto prepare a dummy invoice?

1. DD Form 11482. DD Form 11493. DD Form 13484. DD Form 1348-1

3-71. After having prepared a dummy invoice,you receive an actual invoice in asubsequent accounting period. Which ofthe following actions should you take toaccount for a difference in value?

1. Prepare an additional invoice on DDForm 1149 for the difference andrecord the amount on the FinancialControl Record

2. Prepare an adjustment in DD Form1149, post the net differences tothe Journal of Receipts, and includethis amount as a receipt in the nextset of returns

3. Prepare an adjusting DD Form 250,post to the stock records, and filethe document in the retained files

4. Back down the original entry, postthe correct figures, and submit theinvoice with the returne for thecorrect accounting period

21

3-72. Bonus-free items mustForm 1155 showing thequantity, and no-cost

1. True2. False

be covered by a DDdescription,valve of the items.

3-73. Which of the following actions should youtake when bonus-free items are identical?

1. Post the total quantity to the stockrecord card and establish a sellingprice

2. Give a two-for-one value sale3. Mark the original items down

half-price4. Mark the original and bonus-free

items down half-price

3-74. Bonus-free items should be sold justas though they were regularly ordereditems.

1. True2. False

Learning Objective: Identify theprocedures for checking, proceeding,posting, and distributing varioustypes of receipt documents.

3-75. What person should maintain, under lockand key, the accountability file copy ofeach receipt document?

1. Storeroom custodian2. Authorized inspector3. Ship’s store officer4. Supply officer

22

Assignment 4

Textbook Assignment: “Receipts and Expenditures (continued) and Ship’s Store Operations.”Pages 5-5 through 6-4.

Learning Objective: Identify theprocedures for checking,processing, posting, anddistributing various types ofdocuments. (Continued)

IN ANSWERING QUESTIONS 4-1 THROUGH 4-6 REFERTHE AUDITING OF POSTING PROCEDURES.

4-1. When correct posting procedures arefollowed, discrepancies in countingbetween the authorized inspector and

TO

the receiving storekeeper should be rareevents.

1. True2. False

4-2. As an auditor, you should establisha system by which you can examine thereceipt procedures used by yourrecordskeeper.

1. True2. False

4-3. The amount posted to your Journal ofReceipts should represent the amount thatresults from correct posting procedures.Which of the following series of stepsrepresents the correct sequence to befollowed?

1.

2.

3.

4.

Basic cost of merchandise, lessdiscount (if any), less credit (ifany), plus transportationBasic cost of merchandise, plustransportation, less credit (if any),less discount (if any)Basic cost of merchandise, lessdiscount (if any), plustransportation, less credit (if any)Basic cost of merchandise, lesscredit (if any), plus transportationless discount (if any)

4-4. In a combined operation, receipts postedin the Financial Control Record (NAVSUP235) should be at what value?

1. Coat price only2. Retail price only3. Cost price less credit4. Cost price less discount

4-5. posting copies of receipt documentsshould be initialed to show that allposting has been done.

1. True2. False

Learning Objective: Recognize theauditing procedures to be followedin the processing and distributionof dealers’ bills.

4-6. In processing a dealer’s bill forpayment, all of the following documentsmust be forwarded as supporting documentsEXCEPT which one?

1.2.

3.

4.

One copy of the DD Form 1155The authorized inspector’s originalcertification copy of the DD Form1155The responsibility copy of theDD Form 1155The original and three copies ofthe dealer’s bill

4-7. You should submit dealer’s bills forpayment to which of the following personsor activities?

1. Navy Finance Center2. Navy Accounts and Finance Center,

Washington, D.C.3. Local disbursing officer4. Nearest paying activity for

preparation of public vouchers andpayment (FAAOC)

23

4-8. Within what total number of days from thedate of receipt of the material ordealer’s bill (whichever is later) shouldyou forward the dealer’s bills forpayment?

1. 5 days2. 10 days3. 15 days4. 30 days

4-9. Which of the following forms should youattach to an invoice that offers adiscount?

1. NAVCOMPT Form 1542. NAVCOMPT Form 4423. NAVSUP Form 4484. NAVSUP Form 1075

4-10. Under fast pay procedures, whatindividual or organization assumesresponsibility and risk for supplies thathave not been received?

1. The supplier2. The receiver3. The shipper4. The factory

4-11. Under fast pay procedures, as long as thesupplier is notified within 90 days afterdelivery, the responsibility and riskcondition on a shipment of ship’s storestock remains in effect for what maximumperiod of time?

1. 90 days2. 180 days3. 365 days4. Forever

4-12. Which of the following persons orcommands should be notified in cases ofshipments in which merchandise isdamaged, not received, or not inconformance with the DD Form 1155?

1. The supplier2. NAVRESSO (Code SSD)3. Both 1 and 2 above4. NAVSUP

4-13. Receipts from all sources of procurementshould be filed together?

Learning Objective: Identify theprocedures by which stowage,intrastore transfers, and other typesof movement of ship’s store stockare accomplished and documented.

4-14. Which of the following security measureswill help you to prevent pilferage ofship’s store stock?

1. Storing ship’s store stock in lockedspaces

2. Prohibiting entry of unauthorizedpersons into storerooms (except inemergencies), when the bulk storeroomcustodian is not present

3. Stowing ship’s store stock only incompartments or storerooms that areunder the custody of the responsiblecustodian

4. All of the above

4-15. When bulk stores are being inventoried,what person must be on hand during theinventory?

1. Leading patty officer2. Storeroom custodian3. Supply officer4. Ship’s store officer

4-16. Which of the following actions should youtake to ensure good stock rotation?

1. Mark all cases with the month andyear of receipt

2. Use NAVRESSOINST 4067.4 to establishthe date of manufacture

3. In the receipt process, move out oldstock and put the new on bottom ofthe pallet

4. All of the above

4-17. At times, manufacturers age and stowagecodes can be obtained from which of thefollowing persons/resources?

1. Leading supply chief2. Supply officer3. Both 1 and 2 above4. NAVRESSOINST 4067.4

1. True2. False

24

4-18.

4-19.

4-20.

4-21.

Ventilation, temperature, andhumidity are storage factors thatrequire special attention in the storageof which of the following types of stock?

1. Watches and jewelry2. Radios and tape recorders3. Film and fountain supplies4. Soap and toothpaste

What are the two types of intrastoretransfers?

1. Breakouts2. Transfers3. Breakouts4. Transfers

What document

andandandand

transfersissues for useissues to usesurveys

should you use to accountfor the movement of stock from the bulkstoreroom to the ship’s store?

1. NAVSUP 9732. DD Form 11553. NAVSUP 12504. DD Form 1348

Under which of the following conditionsare Intrastore Transfer Data form NOTrequired for stock movement?

1. In a separate operation2. In a walk-in store operation3. In a combined operation4. In an issue for use

Learning Objective: Recognize thedifferences in the receipt proceduresto be followed when stock is receivedaboard a ship with a supply corpsofficer and aboard a ship without anassigned supply corps officer.

QUESTIONS 4-22 THROUGH 4-26 REFER TO A SHIP’SSTORE AFLOAT OPERATION IN A SHIP WITHOUT ASUPPLY CORPS OFFICER ASSIGNED.

4-22. A shipment is received from anothersupply officer and there is a shortage.Which of the following actions should betaken for processing of thereceipt documents?

4-23.

1.

2.

3.

4.

The original should be signed, thequantity indicated should beaccepted, and the loss should besurveyedThe recordskeeper should list thequantity of the shortage on theoriginal and all copies of thereceipt document and should thensign the original and return it tothe transferring activityThe recordskeeper should list thequantity of the shortage on theoriginal and all copies of thereceipt document, then the chip’sstore officer should sign theoriginal and return it to thetransferring activityThe ship’s store officer should signthe original receipt document,Indicate the quantity of shortage,and return the original to thetransferring activity for correction

When a shortage occurs on a delivery froma commercial carrier, on what documentshould you record the shortageInformation when your ship has no SupplyCorps officer?

1. The dealer’s invoice2. The original purchase order3. The government bill of lading or

other shipping document4. The receipt document taken from

the outstanding purchaseorder file

25

4-24.

4-25.

4-26.

On a ship without a Supply Corps officer,whet person should enter the quantity andunit retail price on all copies of thereceipt document?

1. The responsible custodian2. The ship’s store officer3. The authorized inspector4. The recordskeeper

If you are on a ship without a SupplyCorps officer, to which of the followingrecords should you post the quantity of astock item received and any changes inunit cost or selling price?

1. Journal of Expenditures2. Journal of Receipts3. Stock Tally Card4. Financial Control Record

When stock is received on a ship withouta Supply Corps officer, a total of howmany copies of the receipt documentshould be forwarded to the appropriateFAADC at the end of each month?

1. One2. Two3. Three4. Four

Learning Objective: Identify thedifferent types of expenditures forship’s store stock in terms ofmethods and accountability, anddetermine the correct proceduresfor documenting the various kindsof expenditures.

UNLESS OTHERWISE STATED, ALL QUESTIONS REFER TOSHIP’S STORES AFLOAT WITH SUPPLY CORPS OFFICERSASSIGNED.

4-27. Which of the following methods representthe correct expenditure procedure forship’s store stock?

1. Transfers2. Surveys3. Sales4. All of the above

IN ANSWERING QUESTIONS 4-28 THROUGH 4-31, SELECTFROM COLUMN B THE CORRECT STATUS OFACCOUNTABILITY THAT RESULTS FROM THE METHOD OFEXPENDITURE OF SHIP’S STORE STOCK LISTED INCOLUMN A AS THE QUESTION.

A. METHODS OF ExPENDITURE B. ACCOUNTABILITY

4-28. Transfer 1. Increases4-29. Issue 2. Reduces4-30. Survey 3. Either 1

or 2 above,as appro-priate

4-31. Sales 4. Remainsthe same

4-32.

4-33.

4-34.

When you transfer meterial from yourexcess stock list to another supplyofficer, what price should you use?

1. Retail price2. Cost price3. Price set by the transferring officer4. Cost plus 5% surcharge

What is the recommended way foryour ship’s store to handle a request formerchandise from the Marine Corps or froma ship operated by the MaritimeAdministration?

1. As a transfer to another government2. As an issue to end use3. As a gratuity4. As a cash sale

Which of the following issues is anissue for use?

1. An Issue to survivors of a marinedisaster

2. An issue of clothing of individualsizes for personnel servicing inthe general mess

3. Articles of clothing for burial ofthe dead

4. Bleach and soap to the laundry

26

4-35.

4-36.

4-37.

4-38.

4-39.

4-40.

What primary factor do you need toconsider in determining whether Youshould prepare a breakout or an issuefor use document?

1. The purpose of the transfer2. The transferring activity3. The activity from which the material

was originally received4. The cost of the item

Which of the following issues for use ischargeable to the ship’s OPTAR ratherthan your ship’s store profits?

1. Decorator kit to the ship’s store2. Repair pert to a vending machine3. Clothing to the repair division4. soap to the laundry

To which of the following appropriationsshould surveys for ship’s store stock becharged?

1. Navy Stock Fund2. Ship’s Store Profits, Navy (General

Fund )3. Ship’s Store Profits, Navy (own

ship’s)4. All of the above

Which of the following damages will NOTbe covered by the Navy Stock Fund (NSF)?

1. Fire in the storeroom resulting frombad wiring

2. Flood of water in the storeroom3. Merchandise damaged from negligence on

part of ship’s store personnel4. Merchandise damaged as a result of

ship’s repairs

Which of the following commandsmaintain(s) the Ship’s Store Profits,Navy (General Fund)?

1. NAVSUP2. NAVRESSO3. NAVSEA4. All of the above

For surveyed material subsequentlyreceived, the recordskeeper posts a redink entry in which of the followingrecords?

1. Applicable stock records2. Journal of Expenditures3. Roth 1 and 2 above4. Journal of Receipts

4-41. Which of the following items of stockmust always be revalued by survey?

1. Tax-Free cigarettes2. Foreign merchandise3. Navy clothing4. Special order items

4-42. When an item of Navy clothing is revaluedfrom the standard price of $10, at whatprice should it be listed for resale inthe store?

1. $7.002. $2.503. $5.004. $4.50

4-43. As the leading Ship’s Serviceman, whichof the following concerns should you haveregarding price changes?

1. The authority to supervise theprocedures involved in accomplishinga change

2. An awareness of the reasons for andcauses of price changes

3. The authority to advise the ship’sstore officer when a price change isneeded

4. The authority to exercise all of theconcerns above

4-44. All gains and lessee resulting fromvoluntary price changes are credited orcharged to which of the Following funds,appropriations, or accounts?

1. Ship’s Store Profits, Navy2. Operating funds for the ship3. Navy Stock Fund4. Profits of the ship’s store

4-45. A reasonable number of markdowns during anaccounting period is a good indicationthat you are accomplishing which of thefollowing goals?

1. Operating a clean ship’s store2. Maintaining adequate financial

records3. Using good buying practices4. Exercising some degree of stock

control

4-46. At which of the following times shouldyou mark down seasonal items?

1. At the beginning of the season2. Just prior to the end of the season3. At the end of the season4, At any of the above times

27

4-47. Which of the practices below representsthe best guideline you can follow formaking markdowns?

1. Mark down items progressively2. Mark down items sufficiently to

sell them3. Mark down items to cost and when

sales increase, make a markon4. Mark down all items to cost which

are left over after each accountingperiod

4-48. Which of the following situationsrepresents the most common involuntaryprice change?

1. Perishable stock, such as candy orfilm, reduced to cost because it isold

2. Standard price adjustment for Navyclothing

3. Defective or dirty merchandise whichcannot be returned to the vendormarked down to 50% of cost

4. A purchase variance

4-49. Claims for property lost, destroyed, ordamaged to a service member in the U.S.Navy should be charged to the ship’sstore profits.

1. True2. False

4-50. After what total number of days areperishable and catalogexcess stock?

1. Excess of 180 days2. Excess of 240 days3. Excess of 30 days4. Excess of 90 days

items considered

4-51. Excess stock can be expended in whichof the following ways?

1. Transfers to other supply officers2. Reductions in price for sale on board3. Returns to vendor for cash, credit,

exchange4. All of the above

PERIODICALLY, YOU SHOULD AUDIT EXPENDITUREDOCUMENTS TO MAKE CERTAIN YOUR SHIP’S STOCKRETURNS CAN BE COMPLETED ACCURATELY. INANSWERING QUESTIONS 4-52 THROUGH 4-55, SELECTFROM COLUMN B THE DOCUMENTATION YOU SHOULD AUDITFOR THE TYPE OF EXPENDITIURE LISTED IN COLUMN AAS THE QUESTION.

A. TYPE OF EXPENDITURE B. DOCUMENTATION

4-52. Transfer 1. DD Form 2004-53. Issue 2. NAVSUP Form

9734-54. Price change 3. NAVSUP Form

9834-55. Survey 4. DD Form 1149

Learning Objective: Identify the role ofthe senior Ship’s Serviceman as asupervisor as this role relates to theship’s store operations and customerservice.

4-56. As a senior ship’s Servicemen, you willfind that your principal function in the

retail operation will be as a supervisorof various activities.

1. True2. False

4-57. As a supervisor of the retail storeoperations, you will be responsible forall of the following duties EXCEPT whichone?

1. Helping to select an effective storeoperator

2. Improving customer service3. Training the store operator4. Serving as the sales officer

4-58. Based upon fleet experience, the beetpolicy you can follow is to ensure thatthe operator of a retail activity isrotated at least how often?

1. Every 12 months2. Every 2 accounting periods3. Every 3 months4. Every 4 accounting periods

28

4-59.

4-60.

4-61.

4-62.

4-63.

4-64.

It will usually take at least how long fora new ship’s store operator to acquire agood knowledge of a retell operationassociated record, and controls?

1. 6 months2. 2 months3. 9 months4. 4 months

The practice of allowing one operator tofunction in a ship’s store for toolong usually promotes which of thefollowing conditions?

1. Increased customer satisfaction2. Reduced shoplifting3. Invitation of collusion4. Increased sales

The personality and ability of yourship’s store operator will have no effecton customer satisfaction.

1. True2. False

All of the following assets are importantcharacter traits and attributes that agood ship’s store operator should possess.Of these characteristics, which one isLESS important, as a rule, than the otherthree?

1. Honesty2. Dependability3. Freedom from excessive financial

worries4. Better than average mathematical

ability

Your operator’s personality should bebasically pleasant, or at leastinoffensive and consistent.

1. True2. False

Which of the following personalqualities is/are considered to benecessary for a store operator to beeffective?

1. Willingness to learn2. Honesty3. Dependability4. All of the above

Learning Objective: Recognize theprinciples involved in creating effectivedisplays and signs and how outsideassistance can be provided by NAVRESSO forimprovements to the ship’s store.

4-65. What is the overall basic purpose of anychip’s store?

1. To generate profits for theRecreation Fund

2. To train personnel for advancement3. To sell merchandise4. To serve its patrons

IN ANSWERING QUESTIONS 4-66 THROUGH 4-72, SELECTFROM COLUMN B THE RECOMMENDED AREA FOR DISPLAYOF THE MERCHANDISE LISTED IN COLUMN A.

A. MERCHANDISE B. DISPLAY AREAS

4-66.

4-67.

4-68.

4-69.

4-70.

4-71.

4-72.

Cigarettes 1.

Small items 2.

Large items3.

New items

Pilferable items 4.

Expensive items

Fast-moving items

Golden area

Bottom or lowershelves

Area visible toship’s store operator

Area readilyaccessible toship’s storeoperator

4-73. Display arrangements should be influencedthe most by which of the followingfactors?

1. Correlation of items2. Prevention of pilferage3. Attractiveness4. Customers’ convenience and ease in

shopping

4-74. Which of the following factors should youconsider when you are improving yourstore?

1. Layout2. Location3. Condition of equipment on hand4. All of the above

29

4-75. You have determined that several areas ofyour ship’s store are in need ofimprovements and you have discussed yourrecommendation and findings with theship’s store officer. What should be yournext step for acquiring theseimprovements?

1. Complete a letter request to NAVRESSOfor permission to modernize

2. Place an order for the requiredsupplies

3. Place an order for the requiredservices

4. Have all minor equipment replaced

30

Assignment 5

Textbook Assignment: “Ship’S Store Operations (continued) and Records and Returns.”Pages 6-5 through 7-4.

5-1.

5-2.

5-3.

5-4.

Learning Objective (Continued):Recognize the principles involvedin creating effective displaysand signs, and how outsideassistance can be provided byNAVRESSO for improvements toship’s stores.

All minor equipment and supplies that youprocure for display purposes in theship’s store should be charged to whataccount?

1. OPTAR2. Ship’s Store Profits, Navy3. Ship’s store profits (your own ship)4. Navy Stock Fund

Upon approval from the type commander,major modernization equipment thatinvolves the alteration of the ship’sstructure should be charged to whataccount?

1. Navy Stock Fund2. Ship’s Store Profits, Navy3. OPTAR4. Ship’s store profits (your own ship)

Effective signs in a ship’s store shouldcontain which of the followingcomponents?

1. Lead line2. Head line3. Descriptive information and price4. All of the above

Price information on a ship’s store signshould be clearly stated. Which of thefollowing formats should NOT be used on aship’s store sign?

1. $.80 a day2. $253. 1.95 to 5.954. Price as marked

Learning Objective: Identify thecorrect procedures for the operation ofthe retail outlet of the shipt’s store.

5-5. Of the personnel below, which ones areNOT authorized to buy ship’s store andclothing stock through the ship’s store?

1. Enlisted personnel on board foractive duty training

2. Public Health Service personnel3. Reserve personnel not on active duty4. Air Force officer en route to duty

5-6. For which of the follwing purposes mayauthorized patrons purchase ship’s storeitems?

1. Resale2. Barter3. Gift4. All of the above

5-7. Final approval of proposed ship’s storehours is made by what officer?

1. Ship’s store officer2. Executive officer3. Commanding officer4. Type commander

5-8. The ceiling on net profit for a ship’sstore afloat is what percent of the costof retail sales?

1. 15%2. 17%3. 23%4. 33%

5-9. Merchandise that has already been pricedin the ship’s store can be re-marked onlyby the authority of what NAVSUP form?

1. NAVSVP FOrm 9732. NAVSUP Form 9773. NRVSUP Form 9784. NAVSUP FOrm 983

31

5-10. Standard Navy clothing can be revaluedonly by the authority of a signedDD Form 200.

1. True2. False

5-11. Fountain sales to private messes can bemade only on a one-time basis within whatmaximum time frame?

1. Once a month2. Once every 60 days3. Once per accounting period4. Once every 6 months

5-12. Credit sales to private messes must bepaid within what maximum time frame?

1. By the 15th of each month2. Before the end of the accounting

period3. By the 30th of each month4. Before the end of the fiscal year

5-13. Which of the following types of legaltender can be excepted as cash for salesin the ship’s store?

1. U.S. currency2. Traveler’s checks3. Printed personal checks4. All of the above

5-14. Until you receive sufficient cash fromsales to start the change fund for yourship’s store, you will need an advance.Upon written approval by the commandingofficer, which of the followingindividuals can be authorized to advanceyou the money?

1. Ship’s store officer2. Disbursing officer3. Designated collection agent4. Each of the above

5-15. All cash must be collected from theship’s store under which of thefollowing circumstances?

1. When the accountable officer or retailstore operator is relieved

2. When the store is closed for morethan 72 hours

3. When the accounting period ends4. Each of the above

5-16. Mandatory collection will save you theburden of advancing change funds andexchanging receipts.

1. True

5-17. What person has the only key to theregister and will record the endingregister reading at the close of businesseach day?

1. Supply officer2. Ship’s store officer3. Designated collection agent4. Either 2 or 3 above, depending upon

authorization by the commandingofficer

5-18. Shortages or overages must besubstantiated by an overring/refundvoucher if they are in excess of whatamount?

1. $12. $53. $104. $15

5-19. The cash receipt book Is maintained bywhat person?

1. Ship’s store operator2. Cash collection agent3. Supply officer

5-20. There is only one authorized procedure forcollecting cash in the ship’s store.

1. True2. False

5-21. Which of the following publicationsauthorizes the ship’s store officer togrant refunds?

1. NAVSUP Manual2. NAVCOMPT Manual3. Armed Services Exchange Regulations4. NAVSUP P-487

5-22. Ship’s store refund vouchers (NAVSUP Form972) must be approved by what person?

1. Supply officer2. Ship’s store operator3. Ship’s store officer4. Commending officer

5-23. Defective merchandise that is covered bya guarantee is returned for refund. Whatdisposition should be made of thismerchandise?

1. Returned to the vendor foran adjustment or replacement

2. Repaired by commercial sources3. Sold at a reduced price4. Surveyed

2. False

32

IN ANSWERING QUESTIONS 5-24 THROUGH 5-28, SELECTTHE FORM LISTED IN COLUMN B THAT CORRESPONDS TOTHE PURPOSE LISTED IN COLUMN A.

A. PURPOSES FOR WHICH USED B. FORM

5-24. Verification entries of 1. NAVSUP 470sales

5-25. Record of daily register 2. NAVSUP 235readings

3. NAVSUP 4695-26. Record of cash collected

from store operator 4. DD 1149

5-27. Record of refunds made

5-28. Record of depositsend of month

5-29.

5-30.

5-31.

5-32,

Restrictions on the sale of tax-freetobacco products apply to which of thefollowing products or condition?

1. Foreign manufactured products2. Domestic products3. Sales within the a 3-mile limit of

the United States4. All of the above

Tax-free cigarette may be taken ashoreunder which, if any, of the followingconditions?

1. When the chip is in its home port2. Upon permission being given by the

ship’s store officer3. When the ship has been out for 120

days or more4. None of the above

What maximum number ofcigarette are allowedauthorized areas?

1. 2 packs2. 2 cartons3. 3 cartons4. 5 packs

tax-freeashore in

At the end of the accounting period thevalue of all bulk sales should be postedto which of the following forms?

1. NAVSUP 12342. NAVSUP 4703. NAVSUP 9784. DD 1149

5-33.

5-34.

5-35.

5-36.

5-37.

5-38.

5-39.

As a leading Ship’s Serviceman, you areresponsible for ensuring that your peopletake which of the following actions inregard to security?

1. Maintain security of funds2. Comply with security of spaces3. Observe general shipboard security4. All of the above

Retail spaces are included in which ofthe following security groups?

1. Group I2. Group II3. Group III4. Group IV

Service spaces in which of the follwinggroups are controlled by Ship’sServicemen?

1. Group I2. Group II3. Group III4. Group IV

Regulation governing sanitation in ship’sstore spaces are contained in NAVMEDP-5010.

1. True2. False

Learning Objective: Recognize themethods of resolving mechanical andservicing problems associated with theoperation and maintenance of vendingmachines.

Which of the following conditions willcause mechanical problems of shipboardvending nuchines? -

1. Erratic movement of the chip2. Customers’ abuse3. Both 1 and 2 above4. Normal movement of the ship

Which of the following forms must you useto request vending repair services?

1. DD Form 11492. DD Form 11553. NAVSUP Form 9774. NAVSUP Form 1234

Services for repair of vending machines,are charged directly to Ship’s StoreProfits, Navy, functional account 75400.

1. True2. False

33

5-40. Cash from vending machines should becollected at which of the followingtimes?

1. Daily2. Immediately before repair3. Both 1 and 2 above4. Twice weekly

5-41. Cash from vending machines must becollected on holidays and weekendswhenever collection exceed at least whatamount?

1. $502. $1003. $1504. $200

5-42. Daily collections of vending machineswill satisfy all collection requirements.

5-47. In the vending machine control, itemssuch as springs, fuses, and other repairparts should be recorded in what columnof the NAVSUP 2357

1. Receipts2. Expenditures3. Cost of Operation4. Other

5-48. The cost of vending machine sales and thecost of vending machine operation shouldbe subtracted from cash received fromsales. This figure should give you whichof the following amounts?

1. Net profit2. Gross profit3. Cost of repair parts4. All of the above

1. True2. False

5-43. The NAVSUP 236 should be completed howoften?

Learning Objective: Recognize thesignificance of ship’s store profitsand identify the ways in which profitsare generated, distributed, and used.

1. Daily2. Weekly3. Monthly4. Quarterly

5-44. What is the acceptable average figure fornumber of drinks per gallon of syrup incup-type machines?

1. 752. 903. 1004. 115

5-45. Which of the following guidelineprovide(s) you with the best indicationto help you determine the amount of salesin cup-type vending machines?

1. Cash actually collected2. Record of syrup used3. Meter readings4. All of the above

5-46. Which of the following NAVSUP formsshould you use to prepare your vendingmachine control form at the end of eachmonth?

1. NAVSUP 4642. NAVSUP 4693. NAVSUP 4704. All of the above

5-49. Money for the General Fund accrues fromwhich of the following sources?

1. A percentage assessment on the netcash sales of each chip

2. The excess profits reported byvarious ships

3. The balance of ship’s storeprofits remaining after the lossor decommissioning of a ship

4. All of the above sources

5-50. Ship’s store profits generated duringan accounting period should NOT exceedwhat percentage of the cost of retailsales?

1. 5%2. 1083. 15%4. 20%

5-51. A large pert of the monies from theGeneral Fund supports which of thefollowing facilities or programs?

1. Navy recreation centers2. Construction of swimming pools3. Navy motel operation program4. Navy motion picture program

34

5-52. The largest expenditure from the GeneralFund financially supports or covers whichof the following goals or conditions?

1. Modernization of ship’s facilities2. Shortages that occur and are too

large to be equitably absorbed by theship

3. Initial installation of the ship’sstore facility

4. Procurement of vending machines forthe chip

5-53. NAVRESSO is the procurement activityfor all vending machines, popcornmachines, and soft ice cream mechinesaboard chip.

1. True2. False

5-54. Loans for purchase of vending machinesare made from the General Fund throughNAVRESSO and must be reported accordingto NAVRESSO inatructions.

1. True2. False

5-55. Profits that have been transferred tothe Recreation Fund from the Trust Fundbelonging to the chip are expended asdeemed necessary by what officer?

1. Recreation officer2. Ship’s store officer3. Operations officer4. Commanding officer

5-56. Which, if any, of the following personsmakes recommendatione to the commandingofficer on the amount of funds to betransferred to the Recreation Fund?

1. Operation officer2. Recreation officer3. Ship’s store officer4. None of the above

5-57. Reserve monies should be retained inthe ship’s store account for which ofthe following purposes?

1. TO finance laundry operations duringyard periods

2. To lower losses in profits resultingfrom surveys

3. To offset the effects of markdownsbelow cost

4. To cover all of the above situations

5-58. When you are projecting the amount ofship’s store profits you will laterforward to the Recreation Fund, on whatform can you find the amount of FundsBrought Forward for the prior accountingperiod?

1. Standard Form 10342. DD Form 11493. DD Form 11554. NAVCOMPT Form 153

5-59. When may interim profits be transferred tothe Recreation Fund?

1. Monthly only2. At the end of each quarter3. At the end of the accounting period4. At any time when deemed necessary by

the commanding officer

5-60. Charges are made against ship’s storeprofits for which of the followingpurposes?

1. For repayment of loans received fromNAVRESSO

2. For payment of assessment by theGeneral Fund

3. For reimbursement to personnel whohave incurred lees or damage toapparel as a result of a shiptsservice operation

4. All of the above

5-61 . Which of the following objective doesan inventory accomplish?

1. Gives an accurate value of stock onhand

2. Reestablishes the responsibility ofchip’s store operators

3. Provides the basis for transfer ofaccountability from one ship’s storeofficer to another

4. All of the above

5-62. Inventories must be taken before ship’sstore records may be closed out.

1. True2. False

5-63. Inventory figures provide the openingentries on which of the followingdocuments?

1. Ship’s Store Afloat FinancialControl Record (NAVSUP 235)

2. Stock Record Cards (NAVSUP 464)3. Journal of Receipts (NAVSUP 977)4. All of the above

35

5-64. Inventories help in stock control by 5-71.allowing the senior Ship’s Servicemanto determine whether the ship’s store isoverstocked or understocked withindividual stock items?

1. True2. False

5-65. With which, if any, of the following 5-72.persons does the responsibility to acquireand maintain a complete and an accurateinventory rest?

1. Supply officer2. Commanding officer3. ship’s store officer4. None of the above

5-73.5-66. What minimum number of inventory teams

is/are required for a two-count ship’s storeinventory syetem?

1. One2. Two3. Three4. Four

5-67. An inventory team may consist of onlyone person if personnel are notavailable.

1. True2. False

5-68. A first-count inventory team may includewhich of the following individual?

1. ship’s store officer2. A designated officer assistant3. Any commissioned officer4. Each of the abve

5-69. A senior enlisted person in the supplyrating (E-6 or above) and one otherenlisted person can form second-countinventory teams.

1. True2. False

5-70. Monthly inventories may be conducted by aqualified senior enlisted member (E-6 orabove) in a supply rating upon writtenauthorization from what official?

1. Commanding officer2. Executive officer3. Supply officer4. Type commander

A set of inventory count sheets shouldconsist of what total number of copies(including the original)?

1. Six2. Two3. Three4. Four

What individual serialize the countsheets before they are distributed tothe inventory teams?

1. Supply officer2. Leading petty officer3. Ship’s store officer4. Ship’s store operator

Ths ship’e store officer must maintain anumber control, in duplicate, of allinventory count sheets issued with theteam and spaces that are assigned to eachsheet.

1. True2. False

5-74. When inventory count sheets must be heldovernight, the ship’s store officer isauthorized to leave each spece countsheet with the responsible custodian ofthe spaces to be inventoried.

1. True2. False

5-75. Information on the stock items to beinventoried must be recorded in advanceon the inventory count sheet. Which ofthe following persons must record thisinformation?

1. Recordskeeper2. The responsible custodian of the

spaces to be inventoried3. Inventory team leader4. Either 2 or 3 above, depending upon

availability

36

Assignment 6

Textbook Assignment: “Records and Returns (Continued) and Commissaries.” Pages 7-4 through 8-2.

Learning Objective (continued):Recognize the significance ofchip’s store profits andidentify the ways in whichprofits are generated,distributed, and used.

6-1. Advance information must be recorded onwhich of the following copies of theinventory sheet?

1. Copy 1 only2. Copy 2 only3. copy 3 only4. All four copies

6-2. Fixture numbers on inventory countsheets are assigned by NAVRESSO.

1. True2. False

6-3. Which of the following types of informationshould NOT appear on an inventory countsheet?

1. Vendor’s name2. Description3. Unit of issue4. Location of stock

6-4. Inventories should be planned so that theship’s store is closed for the shortestpossible period of time. Under normalconditions, what time frame shouldrepresent an adequate amount of time forthe ship’s inventory to be completed?

1. 12 hours2. 24 hours3. 36 hours4. 48 hours

6-5. The time frame for a ship’s storeinventory should be determined afterconsultation has taken place with oramong which of the following officials?

1. Ship’s store officer2. Executive officer3. Supply officer4. All of the above

6-6. In combined responeibility, bulkstorerooms should be inventoried andbalanced with the stock record cardbefore retail outlets are inventoried.

1. True2. False

6-7. Which of the following copies of theinventory count sheet should be usedby the first-count team?

1. Pink2. White3. Yellow4. Both 2 and 3 above

6-8. In the first count, inventory spacesshould be counted in which of thefollowing directions?

1. Right to left2. Left to right3. TOP to bottom4. Both 2 and 3 above

6-9. When inventory sheets are completed,they should be signed by the individualsconducting the inventory and forwardedto which of the following persons?

1. Supply officer2. Ship’s store officer3. Comnmnding officer4. Recordskeeper

6-10. The second inventory count should berecorded on which of the following copiaesof the inventory count sheet?

1. White2. Pink3. Blue4. Both 2 and 3 above

37

6-11.

6-12.

6-13.

6-14.

6-15.

6-16.

The second inventory count can be made by 6-17. Other than the ship’s store officer.the same inventory team that conducted thefirst count.

1. True2. False

For the second inventory count, it isusually a good idea to use a differenttechnique than the one in the firstinventory count.

1. True2. False

Upon completion of the inventory, whichof the following actions should be takenin regard to ship’s store spaces?

1. The combination to the lock shouldbe changed

2. The spaces should be locked withthe custodian’s personal padlock

3. A sentry should be posted to guardthe spaces

4. Spaces should be secured with a lockand a numbered seal and the sealnumber should be logged

After the seal number on an inventoriedspace is recorded in a logbook, thenumber must be verified by which of thefollowing persons?

1. Supply officer2. Ship’s store officer3. Custodian of the space4. Both 2 and 3 above

Price line inventories are a tool theship’s store officer can use toaccomplish which of the following goals?

1. Reestablish responsibility2. Transfer accountability3. Establish correct money value for

the balance of ship’s store stock onhand

4. All of the above

Price line inventories should generally betaken at least how often in self-serviceship’s stores?

1. Quarterly2. Weekly3. Monthly4. Quarterly

which of the follwing persons may directan inventory to be held?

1. Type commander (TYCOM)2. Commanding officer (CO)3. Supply officer (SO)4. All of the above

6-18. Which of the following forms should youuse to verify the physical counts fromthe inventory with the hulk storeroomcard balances?

1. NAVSUP 2382. NAVSUP 4643. NAVSUP 9774. NAVSUP 978

6-19. The inventory is usually extended bywhich of the following persons?

1. Bulk storeroom custodian2. Ship’s store operator3. Recordskeeper4. Leading petty officer

6-20. What copy of the inventory count sheetsshould the ship’s store officer use toverify the extensions made on the workingcopy?

1. Yellow2. Blue3. White4. Pink

6-21. The practice of taking a surpriseinventory in midaccounting periods ishighly recommended.

1. True2. False

6-22. A surprise inventory taken in amidaccounting period serves which of thefollowing purposes?

1. It allows for an interim check to bemade on the ship’s store operation

2. It provides a review of the stockposition of the ship’s store

3. It provides a means by whichfinancial condition of the store canbe determined

4. All of the above

38

6-23.

6-24.

6-25.

6-26.

6-27.

Learning Objective: Identity thepurpose, techniques, and procedurethat should be used on the auditingof varioue ship’s store records.

An audit of ship’s store records servesto accomplish which of the followinggoals?

1. Reveal errors2. Prevent the reoccurrence of

accounting problems3. Reveal irregularities4. All of the above

Of the following sequences, which shouldyou use to correctly close out Ship’s Storerecords?

1.

2.

3.

4.

Stock Records, Journal of Receipts,Journal of Expenditures, andFinancial Control RecordFinancial Control Record, StockRecords, Journal of Receipts, andJournal of ExpendituresJournal of Receipts, Journal ofExpenditures, Stock Records, andFinancial Control RecordStock Records, Financial ControlRecord, Journal of Receipts, andJournal of Expenditures

Which of the following types of datashould be posted on stock recordcards?

1. Receipts2. Quantity of each item shown on

inventory sheets3. Expenditures4. All of the above

In separate operations, inventory totalsin both bulk and total balance must berecorded on the stock record cards.

1. True2. False

6-28.

You are spot-checking the stock recordcards to ensure that the recordskeeper iscalculating the total sales correctly.What formula should the recordskeeper beusing to calculate total sales?

1. Beginning Inventory + Receipts -Expenditure - Returns = Total Sales

2. Closing Inventory + Rsceipts -Expenditures - Beginning Inventory =Total Sales

3. Receipts + Closing Inventory -Expenditures - Returns = Total Sales

4. Beginning Inventory + Receipts -Expenditures - Closing Inventory -Total Sales

What document should you check to verifythe sales figure posted to the Ship’sStore Afloat Financial Control Record?

1. Cashbook2. Journal of Receipts3. Journal of Expenditures4. Memorandum Cash Sales Invoice (DD

1149)

6-29. In the Ship’s Store Afloat FinancialControl Record, a large differencebetween the Receipts and Expenditurescolumns always requires investigation.which of the follwing auditingprocedures should you perform toascertain if the difference is the resultof a bookkeeping error?

1. Recheck the extension totals andposting of receipts and expendituresdocuments

2. Examine the preparation of the CashSales Invoices

3. Check the extensions4. All of the above

6-30. After a difference between the Receiptsand Expenditures Columns at the Ship’sStore Afloat Financial Control Record hasbeen investigated, a remaining shortageor overage of that maximum percentage ofsales should still be consideredexcessive?

1. 1%2. 2.5%3. 3%4. 5%

39

6-31. A large difference will always exist inthe cup-type Vending Machines andFountain columns on the Ship’s StoreAfloat Financial Control Record. Thisdifference is the result of which ofthe following causes?

1. Patron abuse to the machines2. Entries that were posted at cost

price3. Too many test drinks4. All of the above

6-32. In the operation of a cup-type vendingmachine, gross profit is usually whatmaximum percentage of total sales?

1. 20%2. 30%3. 50%4. 60%

6-33. In the fountain or snack bar operation,gross profit should fall within whatminimum to maximum percentage of totalsales?

1. 15% to 20%2. 20% to 25%3. 30% to 40%4. 5% to 10%

6-34. When large deviation occur from therecommended gross profit parcentages in asnack bar or vending machine operation,which of the following actions should youtake?

1. Write the difference off2. Investigate the differences3. Force the figure in your opening

inventory4. Do all of the above

6-35. In the first recap for the retail storeall differences should be reported on thereverse side of what form?

1. NAVCOMPT 1532. NAVCOMPT 1763. NAVCOMPT 4424. NAVSUP 977

6-36. You can obtain your cost of operationfigure for vending machines by adding allvending machine entries in the Cost ofOperation column of the NAVSUP Form 235.

6-37. You are closing out the Journal ofReceipts. What maximum number of columnsshould you total?

1. Five2. Two3. Six4. Four

6-38. Entries to the Journal of Expendituresare made at what price value?

1. Retail2. Cost plus transportation3. Cost4. Retail minus discount

6-39. Which of the following expendituresshould have been entered on the NAVSUP978?

1. Transfers2. Surveys3. Both 1 and 2 above4. Receipts from OSO

6-40. When the NAVSUP 978 is being closed out,the cost of operations figure should beextracted from what form?

1. NAVSUP Form 2352. NAVSUP Form 2383. NAVSUP Fom 9774. NAVSUP Form 980

6-41. In closing out the NAVSUP 978, you canfind the cost of all vending machinesales by extracting information fromwhich of the following forms?

1. NAVSUP From 2352. NAVSUP From 2363. Both 1 and 2 above4. NAVSUP 469

6-42. The value of bulk sales on the NAVCOMPT 153is the total of all bulk sales invoices atcost price contained in the Cash Salesfile.

1. True2. False

6-43. When closing out the NAVSUP 978, youshould determine all gains and losses onwhat form?

1. NAVSUP From 2382. NAVSUP Form 12343. DD Form 11494. DD Form 1155

1. True2. False

40

6-44. In closing out the NAVSUP 978, you shouldtake the closing inventory from which ofthe following forms?

1. NAVSUP Form 2382. NAVSUP Form 4643. NAVSUP Form 9774. NAVSUP Form 978

6-45. Your total inventory should be brokendown into what two categories?

1. Cost of vending machine operationsand cost of snack bar operations

2. Clothing and ship’s store stock3. Clothing and cost of operations4. Ship’s store stock and cost of

operations

6-46. The last figure that you must post on theJournal of Expenditures is the cost ofsales--retail. You should arrive at thisfigure by which of the following means?

1. Compute it from information in thefirst two columns of the NAVSUP 235

2. Add all receipts and subtract allissues on the NAVSUP 235

3. Force the figure since you know thevalue of all other entries, includingthe totals

4. Compute from information reported onyour NAVCOMPT 153

6-47. The cost of sales --retail figure absorbsall errors and directly influences theship’s store profits.

1. True2. False

6-48. An accurate set of ship’s store returnsin dependent primarily on which of thefollowing factors?

1. A high sales figure2. A low sales figure3. An accurate closeout4. Both 2 and 3 above

Learning Objective: Determine theprocedures you should follow forconducting an audit of ship’s storereturns.

6-49. Within what maximum period of time fromthe end of the accounting period must theship’s store returns be submitted?

1. 15 days2. 20 days3. 30 days4. 5 days

6-50.

6-51.

6-52.

6-53.

6-54.

6-55.

Normally, the time frame for anaccounting period is 4 months. Underwhich of the following circumstances canthis time frame be shortened or extended?

1. When the accountable officer is beingrelieved

2. When merged returns have beenauthorized

3. Both 1 and 2 above4. When operations prevent the ship

from preparing the returns

Which of the following dates is not adate on which an accounting period ends?

1. 31 January2. 30 June3. 30 September4. 31 May

Which of the following dates representthe end of the only accounting periodthat CANNOT be merged?

1. 31 May2. 30 September3. 31 January4. 30 June

Under unusual or emergency circumstanceswhen returns must be merged for theperiod from September through 31 October,an original request for exception must beforwarded to what authority?

1. Navy Resale Services Support Office2. Naval Supply Systems Commend3. Navy regional finance center4. Fleet accounting and disbursing

center

The original of the letter thatauthorized your merged returns mustbe included with the returns when thereturns are submitted.

1. True2. False

When ship’s store returns must besubmitted late, a letter from thecommending officer explaining the reasonsfor delay must be forwarded to the typecommander with copies to which of thefollowing authorities?

1. Naval Supply Systems Commend2. Navy Resale and Services Support

commend office3. Appropriate fleet accounting and

disbursing center4. All of the above

41

6-56. What two documents must you use toprepare the NAVCOMPT 1 53?

1. NAVSUP 233 and NAVSUP 2352. NAVSUP 977 and NAVSUP 9783. NAVSUP 238 and NAVSUP 2394. NAVSUP 464 and NAVSUP 469

6-57. On your NAVCOMPT Form 153 form, you cancomplete lines BO1 through B09 by usingthe information you have accumulated onwhat Form?

1. NAVSUP 2382. NAVSUP 4643. NAVSUP 9774. NAVSUP 978

6-58. On your NAVCOMPT 153, you can completelines B10 through B30 by using theinformation contained in what form?

1. NAVSUP 2382. NAVSUP 4643. NAVSUP 9774. NAVSUP 978

IN ANSWERING QUESTIONS 6-59 THROUGH 6-62, SELECTFROM COLUMN B THE CAPTION THAT CORRECTLYCORRESPONDS TO THE ONES GIVEN IN COLUMN A AS THEQUESTION. ALL CAPTIONS AND LINES ARE INCLUDEDIN THE PROFIT AND LOSS STATEMENT OF THE NAVCOMPT153.

A. LINES B. CAPTIONS

6-59. CO2 1. Loans authorized6-60. C05 by NAVRESSO6-61. C07 2. Cashbook totals6-62. C09 3. Total receipts

4. Approved surveysto the General Fund

6-63. Actual amusement machine profits shouldbe entered on what line of the NAVCOMPT153?

1. C82. C213. C254. C27

6-64. What official must sign the certificationstatement that appears on the front sideof

1.2.3.4.

the NAVCOMPT 153?

Ship’s store officerCommanding officerSupply officerType commander

6-65.

6-66.

6-67.

6-68.

6-69.

6-70.

6-71.

When you have entered all the requiredinformation on ths NAVCOMPT 153, youshould substantiate and assemble yourship’s store returns at the same time.

1. True2. False

You should make up both your retainedreturns and forwarding returns together.

1. True2. False

What type of mail should you use forforwarding ship’s store returns thatweigh less than 13 ounces?

1. Military Official Mail (MOM)2. Special delivery3. First-Class Mail4. Registered mail

When You must make corrections to ship’sstore returns after they have beensubmitted, which of the following stepsmust you take immediately?

1. Prepare a corrected NAVCOMPT 1532. Forward a corrected NAVCOMPT 153

along with substantiating documents3. Both 1 and 2 above4. Recall the forwarded returns

In what maximum period of time shouldship’s store and clothing retainedreturns be retained on board after theforwarding returns have been submitted?

1. 1 years2. 2 years3. 3 years4. 6 months

You are conducting an internal analysisof your ship’s store operation basedupon the information you have entered inyour ship’s store returns. Which of thefollowing factors should you carefullyanalyze from a mnagement point of view?

1. Sales-store ratio2. Markups3. Costs of operations4. All of the above

Your ship’s store returns will beanalyzed by which of the followingexternal auditors?

1. Appropriate FAADC2. NAVRESSO3. Both 1 and 2 above4. NAVSEA

42

6-72.

6-73.

Learning objective: Determine themission, organization, control, andadministration of Navy commissaries.

The primary mission of the Navy commissaryis to provide authorized resale items forsale to authorized patrons at the lowestpractical price.

1. True2. False

Which of the following organizationperforms the primary support functions forthe Navy commissary?

1. Naval Supply Systems Commend2. Navy Resale and Services Support Office

FSO3. FMSO Merchanicsburg, PA4. Defense Logistics Agency

6-74.

6-75.

Before reporting to your commissary, youmust attend one of the schools on theoperation of a commissary. YOu shouldobtain the dates and areas of availableschools from

1. the personnel office serving yourpresent command

2. the Navy supply corps school, Athens,Georgia

3. your nearest Navy commissary4. NAVRESSO Commissary Operations Group

Generally, chief petty officers, and firstclass petty officers are assignedsupervisory positions in which of thefollowing areas?

1. Warehouse2. Front end3. Receiving4. All of the above

43

Assignment 7

Textbook Assignment: “Commissaries (continued) and Retail Operation Management (ROM) System.”Pages 8-2 through 9-6.

7-1.

7-2.

7-3.

7-4.

Learning Objective (continued):Determine the mission, organization,control, and administration of Navycommissaries.

Upon reporting to the commissary, youwill be asked to read, understand, andsign a copy of the

1.2.3.

4.

The

UCMJheat stress instructionNavy’s policy on waste, fraud, andabusestandards of conduct

commissary management course is givensix times a year at which of the -

following locations?

1. Norfolk, VA2. San Diego, CA3. Both 1 and 2 above4. Athens, GA

Learning Objective: Establish properprocedure for security, handling,and transportation of funds.

An a supervisor you will be responsiblefor proper handling of commissaryfunds and ensuring that commissarypersonnel under your supervision do thesame.

1. True2. False

Authorization to handle funds should beassigned to as many persons as possiblein order to keep funde secure.

1. True2. False

7-5. What individual may be designated as acash collection agent?

1. Officer in charge2. Sales floor supervisor3. Designated and bonded collection

agent4. Assistant commissary store officer

7-6. If the cash collection agent becomesunable to perform the duties of theposition, which of the followingpersonnel should assume the job?

1. The senior register operator2. The leading chief3. The person designated by the officer

in charge

7-7. After making collections, the collectionagent should release the funds to the

1. bank2. officer in charge3. base police4. collection agent’s assistant

7-8. As a collection agent in a commissary,what source should you consult fordetailed guidelines on which funds youshould handle?

1. Commissary store officer2. NAVRESSO3. Written Instructions4. Person being relieved

7-9. When may a cash collection agent beauthorized to take cash registerreadings?

1. When operating a small store with alimited staff

2. When approved by NAVRESSO3. Both 1 and 2 above

7-10. Funds may be held In the collectionagent’s safe for what total number ofdays?

1. 12. 23. 34. 5

44

7-11. Any safe holding official funds must havea label attached from which of thefollowing organizations?

1. Underwriter’s Laboratories2. Commissary store group label for your

region3. NAVRESSO4. A-1 locksmith or another certified

company

7-12. What is the weight limitation for a safemounted on a wall?

1. 750 lb2. 200 lb3. 255 lb4. 500 lb

7-13. The officer in charge is responsible forensuring that spaces used for commissaryfunds are protected by an alarm system.To obtain information on the system bestsuited for the needs of the commissary,the officer should consult which of thefollowing sources?

1. Station security officer2. Commissary regional office3. Naval directives or instructions4. NAVRESSO

7-14. To ensure safe and proper transpotingof commissary funds, the person respon-sible for the funds should consult whatpublication?

1. SECNAVINST 5200.G12. NAVRESSOINST 4067.63. NAVRESSOINST 4065.234. NAVRESSOINST 4065.39

Learning Objective: Describe procure-ment, management, and sale of stockin the Navy commissary.

7-15. Which of the following factors must youconsider when managing the handling andtreatment of stock in a commissary.

1. Authorized limits2. Demands of your store3. Shelf and storage spaces4. All of the above

7-16. The catalog number assigned to an item ofstock is a six-digit number. Whichportion of this number represents themerchandising group for each item?

1. First three digits2. Last two digits3. First two digits4. First number

7-17. Items ordered on a one-time basis shouldNOT exceed anticipated seles for whatmaximum length of time?

1. 1 month2. 2 months3. 3 months4. 2 weeks

7-18. The number of items carried on a one-timebasis only should NOT exceed what maximumnumber of line items?

1. 1202. 203. 604. 75

7-19. Any increase in the number of one-timebasis items carried must be approved by

1. the commanding officer, CommissaryStore Region

2. NAVRESSO3. NAVSUPSYSCOM4. the commissary store officer

7-20. The commissary store may procure Easterbaskets when the total cost of eachbasket exceeds the total cost of itscandy components.

1. True2. False

7-21. Which of the following items areunauthorized for stock in the commissary?

1. Prescription drugs2. Nonprescription devices3. Over the counter drugs

7-22. Which of the following types of specialtyseasonal candy should NOT be stocked inthe commissary?

1. Valentine’s Day candy (boxed hearts)2. Hollow, solid, and filled chocolate

figures3. Individual Christmas candy canes and

filled stockings4. All of the above

45

7-23. Increases in inventory limitations aresubject to which of the followingfactors?

1. Limitations of the staff2. Maintenance of accountability3. Both 1 and 2 above4. Needs of the the patrons

7-24. Accurate stock control can be beneficialin which of the following ways?

1. Obtaining merchandise2. Maintaining a satisfactory in-stock

position3. Controlling inventories4. All of the above

7-25. Currently, what total number of stockcontrol syetems are in use in Navycommissaries?

1. Six2. Two3. Three4. Four

7-26. What system, if any, performs calculatingand printing functions for commissariesin small regions in overseas locations?

1. ACS2. MONROBOTX1 system3. L2000 system4. Manual system

7-27. What is the purpose of the ACS?

1. To provide date-proceeding supportfor procurement, stock control,merchendising, accounting, andmanagement information functions

2. To perform calculating and printingfor commissary store control inoverseas regions

3. Both 1 and 2 above

7-28. Installation of the ACS will allow thecommissary to execute which of thefollowing actions?

1. Eliminate excess safety stocks2. Improve services3. Reduce inventory levels4. All of the above

7-29. A customer approached you asking, “Whenwill the commissary start carrying aparticular item?” What should you do?

1. Refer to the stock item review listto see if the item is listed

2. Check with the CSO3. Check the T-53s’ for the next day4. Reply, “I don’ t know”

7-30.

7-31.

7-32.

7-33.

7-34.

7-35.

7-36.

7-37.

Commissary store patrons can makesuggesions to the management by fillingout what form?

1. NAVSUP 9752. T-53s3. NAVSUP 11574. NAVSUP 1234

Which of the follwing items of stock areconsidered special stock items?

1. HABA items2. Pest control agents3. Medical items4. Both 2 and 3 above

Restricted pesticides are thosepesticides NOT procured for resale inyour commissary.

1. True2. False

Which of the following medical items areCommissaries PROHIBITED from celling?

1. Required prescriptions2. Over the counter drugs3. Both 1 and 2 above4. High-strength aspirins

What NAVRESSOINST provides the commissarywith an authorized stock list?

1. NAVRESSOINST 4065.392. NAVRESSOINST 4065.233. NAVRESSOINST 4067.154. NAVRESSOINST 4065.35

Items NOT listed in the CommissaryOperating Procedure Manual must beprocured with the approval of whom?

1. Commending officer2. CSO3. Army vet4. NAVRESSO

A letter of authority for unauthorizeditems of stock ordered should be attachedto the requisition or purchase order.

1. True2. False

Which of the following actions isprohibited concerning bonus coupons?

1. Donating them to charitableorganizations

2. Disposing of them3. Using them for personal benefit of

military or civilian employees

46

7-38. You have ordered 168 boxes of cereal andthe vendor delivers 192 at the sameprice. Which of the following actionsshould you take?

1. Return the ovarage to the vendor2. Accept the excess merchandise et a

reduced price only3. Accept the overage of the merchandise

ordered if the vendor charges thesame cost price

4. Both 2 and 3 above

7-44. Which of the follwing cycles is/areconsidered procurement methods in a Navycommissary?

1. Short cycle (daily delivery)2. Long cycle3. Short cycle (weekly)4. All of the above

7-45. What are the moat frequently usedprocurement documents in a Navycommissary?

Learning Objective: Determine theprocedural for receiving, controlling,and storing stock in commissary storesand the related equipment used.

7-39. All resale merchandise received should beaccounted for on which record?

1. CS 352. CS 283. T-534. NAVSUP 975

7-40. All miacellaneous supplles and servicesshould be accounted for on which record?

1. CS 352. CS 283. T-534. NAVSUP 975

7-41. From which of the following records wouldyou obtain a receiving number?

1. CS 352. CS 283. T-534. NAVSUP 975

7-42. Numbers contained in the NAVSUP 975should come from a continuous series ofnumbers beginning each month with

1. 99002. 97003. 0001

7-43. Commissary trust revolving fund receiptsare handled in the same manner as NavyStock Fund Receipts. The only differenceis that the serial number is preceded bywhet number?

1. DD 1149 and T-532. T-53 and DD 13483. DD 1155 and T-534. DD 1155 and 1149

7-46. What total amount of lead time, if any,is allotted when procurement is madeunder the short weekly cycle?

1. 12 days2. 8 days3. 7 days4. None of the above

7-47. The Automated Commissary System (ACS) iscurrently being used by all commissariesin CONUS and overseas.

1. True2. False

7-48. what action should you take if the totalquantity listed on the T-53 is NOTreceived?

1. Cross out the incorrect quantityand enter the correct amount onthe T-53, circle and initial thechange

2. Get the vendor to sign for theshortage on the T-53 and the deliveryticket

3. Both 1 and 2 abve4. Get the vendor to sign for the

shortage on the delivery ticket only

7-49. A successful commissary operationdepends on which of the followingfunctions?

1. Proper procurement procedures2. Proper accounting and werehousing3. Keeping shelves stocked4. All of the above

1. 8 VICE 92. 8 VICE 03. 7 VICE 04. 7 VICE 9

47

7-50. The ACS is a network of computerterminals that is located at commissariesand warehouses throughout CONUS. Usingthese terminals, information istransmitted to NAVRESSO in which, if anyof the following ways?

1. Transmitters2. Phone3. Message4. None of the above

7-51. The ACS consists of how many subsystems?

1. Seven2. Six3. Five4. Four

7-52. What total number of different typesof inventories are there in thecommissary?

1. Five2. Two3. Three4. Four

7-53. Which inventory is used for stock controland ordering or resale merchandise?

1. Physical2. Special3. Perpetual4. Cyclical

Learning Objective: Determine propercheck-out and cash register proceduresin the Navy commissary and identifyauthorized patrons.

7-54. The definition for authorized patronsis contained in which of the followingpublications?

1. ASCSR2. NAVRESSOINST 4065.233. NAVRESSOINST 4065.394. NAVCOMPT Manual

7-55. What is/are the purpose(s) of the PASSdesk?

1. To identify authorized patrons2. To issue badges3. To furnish general information to

patrons4. All of the above

7-56. Which of the following items is/are NOTacceptable from patrons for payment?

1. Personal checksCredit cards2.

3. Food stamps4. Money orders

7-57. Which of the Following is not one of theresponsibilities of check-out personnel?

1. Ensuring that only authorized patronsare allowed through the lane

2. Setting up applicable displays3. Accepting money and reeking change4. Each of the above

7-58. What would be the best location for theexpress lane?

1. Nearest lane where customers entercheck-out area

2. The lane nearest the exit3. The lane closest to the cash cage

7-59. Which of the following factors shouldyou consider when scheduling check-outpersonnel?

1. Patron transactions2. Workload3. Paydays, sales events, and forecasted

sales4. All of the above

7-60. After register operators are hired, theyshould receive which, if any, of thefollowing training?

1. 9 hours’ indoctrination and 1 hourof training every month for 6 months

2. 8 hours’ of training, 1 hoursindoctrination, and 16 hours oftraining every 6 months

3. Depends on their past work experience4. None of the above

7-61. To feel more comfortable and relaxed, thecash register operators should beallowed to pick their own register.

1. True2. False

7-62. As cash register supervisor, you arerespnsible for which of the followingduties?

1. Issuing of register keys2. Ensuring that the register is

equipped with enough detailed tape3. Ensuring that the ink is producing

legible tapes4. All of the above

48

7-65.

7-64.

7-65.

7-66.

7-67.

7-68.

7-69.

When an item isoperator should

1. CS-452. T-9733. NAVSUP 9724. NAVSUP 975

overrung, the registerprepare what form?

To maintain a record of each cashregister operator’s performance, youshould use which, if any, of thefollowing records?

1. CS-112. CS-53. CS-14. None of

All refundson which of

1. CS 112. CS-13. C-654. CS-5

the above

to patrons must be recordedthe following forms?

When cash register operators have to usethe restroom, they are permitted to leavethe funds in the register.

1. True2. False

Which of the following measures shouldyou take to prevent employee theft fromthe cash registers?

1. Keep the cash register windowunobstructed

2. Prohibit sharing of cash drawers3. Insist that error corrections and no

sales are kept at a q inimum4. All of the above

Cash register readings should be taken bywhat individual?

1. Cash collection agent2. Register operator3. Check-out supervisor

Cash register operators will turn intheir detailed tapes to the cashcollecton agent at the close of cashbusiness day.

1. True2. False

7-70.

7-71.

7-72.

7-73.

7-74.

7-75.

HOW often should a partial collection bemade?

1. 1 to 2 hours before store closing2. Every 2 hours3. Every 4 hours

Learning Objective: Identify theretail operation management (RoM)system and its related uses.

Implementation of the ROM systemrequires all items of stock to beassigned a class and sequence number.Which of the following is the BESTexample?

1. 10000-06152. 23000-02673. 11000-05664. All of the above

The objective of ROM is to benefit theShip’s Serviceman in which areas?

1. Logistics2. Financial management3. Inventory control4. All of the above

Which of the following documents willROM handle?

1. NAVSUP 2352. NAVSUP 4643. NAVSUP 9774. All of the above

The ROM is designed for use by allsupply ratings.

1. True2. False

Which of the following are types ofsecurity associated with ROM?

1. Physical2. Application3. Both 1 and 2 above4. Security

49