feasibility study arman

7/27/2019 Feasibility Study Arman

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Product: its use and users

Nata is Spanish word derived from the latin word Nature meaning to float. It is

usually white or cream colored and as well liked for dessert and and for making or

preparingbuko salad and it will served as dessert after meals. But the proposed product

was Nata de Langka it is usually yellowish in color and i t will be packed in a bottle jar

with label, approximately 60g. Though it is a processed food, the natural flavor and taste

can maintained.

Nata de langka is a nutritious dessert and its advantage is the sweetness found in(langka) and it provides a good supply of proteins, carbohydrates and vitamins.

The proposed business project is a food manufacturing type, which is on the

production of Nata de Langka it is good for preparing dessert after or before meals. The

target consumers of the product are the household population of the target market.


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INTRODUCTION

There are different products that exist in our local market today. The proponent

decided to propose a new variation of nata that compliments the dishes dessert and salad

utilizing the original flavor of jackfruit.

A delicacy popularly called nata is formed by cellulose forming bacterium,

acetobacteracetixylinum or acetic acid xylinum. Nata is usually white or cream colored

and as well like for dessert and for preparing buko salad. There are already existing

differentnata products in the market. Such as nata de pinya, nata de coco and etc. in the

preparation of the nata, the presence of the right percentage of sugar, a definite acidity

and the addition of proper nutrient like ammonium sulfite, urea acid, and ammonium

phosphate are important. The culturing requirements for the formation of nata are as

promoting factors, temperature about 28 oc, pH, nitrogen source like ammonium, salts,

and carbon source like sucrose or glucose.

This study will attempt jackfruit as raw material to process nata. Jackfruit

provides a good supply of proteins, carbohydrates and vitamins. It contains 38%

carbohydrates, 6.6% proteins and 0.4g fats, vitamins like Vitamins A, C and certain Vit.

B1.

The proposed business project als o known as Armandos Best NATA de

LANGKA.


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Brief Description of the Business

The proposed business project is a food manufacturing type, which is on the

production of NATA de LANGKA it is good for dessert and for preparing buko

salad. The target consumers of the product are the household of Pio Duran Albay,

DonsolSorsogon, and near Barangays. The label of the products states the name of the

products, contact number, expiration date and ingredients to be used.

NATA de LANG KA is likely intended for desserts and for preparing buko

salad. Its advantage is the sweetness found in (LANGKA) and it provides a good supply

of proteins, carbohydrates and vitamins. It will be packed at 60g per jar.

The proponent will be used the streamers, fliers, and conduct a free taste sampling

to recognize the product. And it will be delivered at all grocery stores, market, canteen,

and schools.


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Procedure:

1. Select ripe jackfruit washed and sliced.

2. Get the pulp of jackfruit then blend.

3. Strain the ground pulp. Measure the juice

4. Mix 100g sugar, 2L mother liquor and 350ml. acetic in the juice. Mix themthoroughly.

5. Distribute the mixture equally in a plastic container about 2-3 inches deep.

6. Cover with Manila paper and set aside in an undisturbed place for 8-10 days asthe fermentation process.

7. Harvest the nata after specified period.

After harvest:

8. Wash the nata thoroughly and cut into cubes.

9. Immerse in water for two days changing the water often to remove the sourtaste.

10. Boil in water for 2 or more times until the sour taste and odor are completelyremove.

11. Drain and weight.

12. Add an equal weight of sugar and stir thoroughly (1kg of refined sugar in every1kg of nata).

13. Boil again until it is tender. Cool

14. Pack in a bottle then process it in a thermal processing.


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EXECUTIVE SUMMARY

Name of Business : Armandos Best NATA de LANGKA

Location : Sta. Cruz DonsolSorsogon

Nature of the Business: NATA de LANGKA Production

Form of Business : Sole Proprietorship

Proponents : Armando M. Olivas Jr.

Sources of financing : Owners Equity

Total project cost : Php.141,201.37

Return on Investment :

Cash payback period :

Start of operation : April 2014

VISION:

To be the first and leading producer and distributor of Nata de Langka in the

municipality of Donsol Sorsogon, Pio Duran Albay and Ligao City.

MISSION:

To promote Lanka as a main ingredients/materials of a product at an affordable

price. And to provide safe and convenient to customers in this fast changing time and to

uplift and generate income to the community; to provide employment to the people in the

locality; to be an active contributor to the growth and development of our economy and

to promote good health among the customers by providing safely. Train and educate the

workers to be efficient responsible and to help the economic growth of the locality.


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BUSINESS OBJECTIVES:

1. To be the leading producer and seller of Nata de Langka products in Donsol,

Pio Duran and Ligao.

2.

To gain profit out of the business.3. To help improve the economy of Donsol and provide employment for the

individual for them to live a good standard of living.

4. To contribute in the economic growth of the country by paying taxes.


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MARKET STUDY


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Production Process Flow Chart

RipeJackfru

Cleaning

Slicing

Pulping

Preparation of thesample

Mechanical Methodof Extraction

Juice

Filtrating

Meat

Delivery

Syruping

Harvesting CuttingWashing

ImmersingBoilingTime 1 Time 2 Time 3

Bottling

NATAde

LANGK

Thermal ProcessingTemp.1 Temp.2Tem . 3

MixingT1 T2

Fermenting

Boiling


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Demand Analysis

Demand is the willingness of the buyer/prospective customers to buy

the product. The proposed product of this study is the processed of Nata de Langka,

to compute for the demand of the proposed product, the proponent divided to use the

household population of the Pio Duran Albay, Ligao City and Donsol Sorsogon.

TABLE 1Projected Household for the next 6 years

YearNumber of projected household

DonsolSorsogon

Pio DuranAlbay

Ligao City Total

Actual 2014 9,991 10,224 111,259 131,4742015 10,173 10,355 112,906 133,4342016 10,358 10,488 114,577 135,4232017 10,547 10,622 116,273 137,4422018 10,739 10,758 117,994 139,491

Total 51,808 52,447 573,009 677,264(Source: NSO Demographic Survey)

From this data gathered, the proponent arrived with the projected household for 2013

by multiplying the growth rate with actual household and adding the same with product.

The projected household from 2013-2018 was also determined. Projected household

population of Donsol Sorsogon, Pio Duran Albay, and Ligao City with the corresponding

growth rates of 1.82% in Donsol Sorsogon, 1.28% in Pio Duran Albay, and 1.48% in

Ligao City.

Name of Towns/City Household PopulationPio Duran Albay 10,224

Ligao City 111,259Donsol Sorsogon 9,991

Total 131,474


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TABLE 2Prospective Buyer

Year HouseholdPopulation% of Willingness to

buyProspective buyer

2014 131,474 83% 109,1232015 133,434 83% 110,7502016 135,423 83% 112,4012017 137,442 83% 114,0772018 139,491 83% 115,778

(source: actual survey)

The table 2 shows the computation of the prospective buyer. The total number of

household was multiplied to 83% which was the percentage of willingness to buy.

Percentage of willingness to buy is based from actual survey.

TABLE 3Projected Demand

Year Prospective Buyer Average Per CapitaConsumption Total Demand

2014 109,123 17 1,855,0912015 110,750 17 1,882,7502016 112,401 17 1,910,8172017 114,077 17 1,939,3092018 115,778 17 1,968,226

The table 3 shows the total demand for the product. It was calculated by multiplying

the prospective buyer by the average per capita consumption. Based on the study there

are 1,680 packs related products consumed in a year. To get the average per capita 1,680

packs divided to 100.


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TABLE 4LIST OF DEALERS OF SIMILAR PRODUCTS

Address Dealers Supply of ProductsSupply per

MonthSupply per

Year

DonsolSorsogon

Nevares Store Nata de Coco 350 4,200

Melitante Store Fruit Cocktail 300 3,600

Donsol MiniMart Nata de Pia

150 1,800

PioduranAlbay

Pavia Store Nata de Coco 250 3,000

Llenaresas Store Fruit Cocktail 400 4,800

Ligao CityLCC Nata de Coco 500 6,000

Expressmart Fruit Cocktail 475 5,700

Total 2,425 29,100(Source: Actual Interview)

The proponent of Nata de Langka can compete with other Nata products in terms of its

fruit flavor, taste and texture of its products and the packaging method. The propose Nata

will be packed in a bottle jar thereby for the safetyness of the consumers and easy to

transport and make sure the product was sealed.

TABLE 5PROJECTED SUPPLY OF SOME COMPETING PRODUCT FOR FIVE (5)

YEARS

YEAR PROJECTED SUPPLY (10%

INCREASE)2014 32,0102015 35,2112016 38,7322017 42,6052018 46,866


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These supplies of competing products were projected to increase 10% per annum,

based on the interview conducted on the existing distributors and suppliers. Table 5

shows the projected supplies of competing products for the next 5 years.

Demand and Supply Gap Analysis

The demand and supply gap were obtained by subtracting the total supply from the

total demand. There will be a high possibility of a high acceptance for the proposed

business by the target market. Production volume is projected to increase by 10% per

annum. Market share was determined by dividing the production volume over the

demand and supply gap and multiplied by 100% per year. Table 6 shows the demand and

supply gap of the product.

TABLE 6PROJECTED PRODUCTION VOLUME AND MARKET SHARE

YEAR TOTAL

DEMANDTOTALSUPPLY

DEMANDAND

SUPPLYGAP

PRODUCTIONVOLUME

MARKETSHARE

2014 1,855,091 32,010 1,823,081 2,560 1.40%2015 1,882,750 35,211 1,847,539 2,816 1.52%2016 1,910,817 38,732 1,872,085 3,104 1.65%2017 1,939,309 42,605 1,896,704 3,408 1.79%2018 1,968,226 46,866 1,921,360 3,744 1.94%

The demand and supply gap was analyzed in order to determine if the proposed

business has a placed in the market. Table 6 shows that proposed business has a potential

in the market, with a market share of 2.31% on its first year of operation and expected to

increase to 3.21% on its fifth year of operation as projected.


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.Marketing Strategy

Selling the product is a hard task on the part of the manufacturer. In order for the

product to be sold several strategy in marketing must be employed. Marketing strategies

focus on the four Ps of marketing. Product, Price, Promotion and the place.

Product Strategy

The product is created out of ingredients that is only grown/abundant in the

Locality

Nata de Langka is a fruit product. It is processed together with some ingredients

to attain its best taste and appearance. It will be bottled jar to make it attractive and catch

the attention of the target customers. The innovation is expected to bring more curious

costumers which expected to become regular buyers because of its delicious taste of

jackfruit (langka). The proponent decided to produce Nata de Langka to introduced in the

market.

The product will be packed in bottled jar and the selling price of product is

Php.36.02 the price is comparable to the prices of existing related products in the market.

Pricing Strategy

Selling price is based on unit production cost with a mark-up of 7%.which is

enough to supplement the administrative. The suggested selling price of the proposed

product is Php.36.02 per bottle of 60g. It is just equal from the price of the competitors

and it will serve as an advantage of product. The proposed product will sell and distribute

to the target consumers, buyer and through distributors such as grocery stores and all

outlets in order to patronize the product.


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Promotional Activities

The strategies that will be used in promoting the product are: (1) offer discounts

to the costumers who have a large volume of purchasing of product, (2) giving pamphlets

to the prospective buyers for them to be guided with the necessary information about the product, (3) free taste campaign, it will be done purposely to know the reaction of the

costumers. Based from their reaction we can determine if they like the product or not.

Figure 1

LABEL

Armandos Best Nata de Langka

Ingredients:Ripe JackfruitMother LiquorAcetic AcidWater

Address and contact number of manufacturedSta Cruz DonsolSorsogon09466846000/ 09272905990

Net Wt.60g


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Channel of Distribution

Nata de Langka will be sold directly to end users or distributed to sari-sari stores

in the selected barangays in Donsol, Pio Duran, and Ligao.

Figure 2 shows the channel of distribution that will be adopted by the proposed business.

Figure 2.

Channel of Distribution of Nata de Langka

R

PRODUCERS

END USERSCOSTUMERS

DISTRIBUTOR


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TECHNICAL STUDY


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Product Specification and Composition

Nata is Spanish word derived from the latin word Nature meaning to float It is

usually white or cream colored. It is a chewy, jelly-like food product and it is highly

regarded for its high dietary fiber, zero fat, and cholesterol content.

Nata de Langka used for processing should be smooth, yellowish in color, firm in

texture and preferably 1 to 1.5cm. in thickness and as well liked for dessert and for

making or preparing buko salad and it will served as dessert after meals. It will be packed

in a bottle jar with label, approximately 60g. Though it is a processed food, the natural

flavor and taste can maintained.

Nata de langka is a nutritious dessert and its advantage is the sweetness found in

(langka) and it provides a good supply as proteins, carbohydrates and vitamins.

The proposed product is a Nata made out of Langka/Jackfruit. Nata means it

will be turned into a jelly/chewy white or cream jelly.


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PRODUCTION PROCESS

It will presents the processing of jackfruit into Nata de Langka which include the

proportion. Ingredients, procedure and the degree of acceptability in terms of color,

aroma, texture, taste and the production cost.It is present the correct proportion of ingredients in processing of jackfruit into Nata

De Langka, the process invo lved were illustrated step by step.

1. Select ripe jackfruit, cleaning and slice

2. Get the bulb of jackfruit then blend. Strain

3. Add the juice in 6L water, then add sugar

4. Mix well using a wooden spoon

5. Add the mother liquor after removing the thin nata growth add the glacial acetic.Mix thoroughly

6. Pour the mixture into clean hot water sanitizes fermenting containers to depth of about 2 inches

7.

Cover with manila paper set aside in undisturbed place for 10-14 days

8. Harvested nata is cleaned by removing the cream adhering to the lower portion of nata.

Syruping of Nata de Langka

1. Cut cleaned nata into cubes approximately 1cm

2. Soak the nata for one or more days in water changing it in several times to removethe sour taste and smell

3. Drain the nata and boil in water for 5-10 minutes or until the acid is totallyremoved. Check if the acid is totally removed

4. Prepare jackfruit syrup and mix it thoroughly in a nata. Set aside overnight untilthe nata is fully penetrated or evenly mixed with jackfruit syrup.


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Figure 3Production Process Flow Chart

RipeJackfr

Cleaning

Slicing

Pulping

Preparation of thesample

Mechanical Methodof Extraction

Juice

MixingT1 T2 T3

FiltratingMeat

Fermenting

Delivery

Syruping

Harvesting CuttingWashing

ImmersingBoilingTime 1 Time 2 Time 3

Boiling

BottlingThermal Processing

Temp.1 Temp.2 Temp. 3

NATAde

LANGK


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Production Volume and Schedule

The Business will operate four (4) days a week on an average of sixteen (16) days

production per month the production and sale operation will be from 8:00 am to 12:00

noon and 1:00 pm to 4 :00 pm as shown in table 9.

Table 9Production and Distribution Schedule

Weeks Monday Tuesday Wednesday Thursday Friday

Monday Production and Packaging checking and inspecting the maintenance andsanitation of the production area.

Tuesday Production and Packaging, Purchasing raw materials and order taking

Wednesday Production and Packaging

Thursday - Production and Packaging, collection and order taking

Friday Delivery

Saturday and Sunday Rest day

Table 9 shows the production Volume of the proposed production for five (5) consecutive

years under study. Production volume will increase by 10% annually.


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Table 10

Production Volume

Year Daily Weekly Monthly Yearly2014 160 640 2560 30,720

2015 176 704 2, 816 33, 7922016 194 776 3, 104 37, 2482017 213 852 3, 408 40, 8962018 234 936 3, 744 44, 928Total 977 3,908 15,632 187,584

Table 10 shows the product on volume of the proposed production for five (5)

Consecutive years under study. Production and Volume will increase by 10% annually.

Raw Materials Requirements

The primary raw materials will be used for the production of the Nata de Langka.

Table 11Raw Materials Requirements

RawMaterials

Volume perday Unit Cost

Total CostDay Week Month Year

Ripe Jack fruit

1 kg. ripeJackfruit

80.00/klo. 80.00 320.00 1280.00 15,360.00

Mather liquior

2 L 100.00/L 200.00 800.00 3,200.00 38,400.00

AceticAcid

350 ml 0.1/ml 35.00 140.00 560.00 6,720.00

Sugar 100g 6.25/100g 6.25 25.00 100.00 1,200.00Total 321.25 1,285.00 5,140.00 61,680.00

Table 11 shows, the raw material needed for production with its corresponding costs.

Unit costs were gathered from actual interview conducted by the proponent with different

vendors selling the raw material. The business needs Php. 61,680.00. To produce the

annual raw material


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Table 12

Packaging Materials Requirement

Particular Quantity Unit costs Daily Weekly Monthly YearlySticker 160 pcs. 0.75 120.00 480.00 1,920.00 23,040.00

Pet jar 160 pcs. 13.00 2,080 8,320.00 33,280.00 399,360.00Top Seal 160 pcs. 2.00 320.00 1,280.00 5,120.00 61,440.00Total 483,840.00

Table 12 shows the packaging materials and its cost which is needed in the

production of the proposed product. The said materials will come from the supplier stated

as its source.

TABLE 13Transportation Expense

Cost/Week Cost/Month Cost/YearPhp.240.00 Php.960.00 Php.11,520.00

Table 13 shows the transportation expense that will be allocated for the delivery

of finished proposed product.

Production Tools, Utensils and Equipments

During the production activities, tools & utensils, and equipments are used to make the

process faster and easier. It enables to meet the production schedule.

Table 14 presents the tools and equipment needed for the production with the

corresponding cost.

Table 14

Production Tools & Equipment

Particulars Quantity Unit cost Total cost Economic life Yearly,DepreciationBlender 2 1,800.00 3,600.00 5 years 720.00Electricsealer 2 2,500.00 5,000.00 5 years 1,000.00

Total 1,720.00(source: LCC Legaspi)


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The table 15shows the unit cost of utensils

Table 15Production Utensils

Particulars Quantity Unit Cost Total AmountSlicing knife 4 8 32Stock Pot 5 15 75Measuring Cup 4 120 480Wooden spoon 4 25 100Chopping board 4 50 200Strainer 4 150 600Mixing bowl 2 500 1000Plastic Container 20 50 1000Weighing Scale 2 200.00 400.00Total 3,887

(source: Pioduran Public Market)

To maintain a clean sanitary, production site the proponent needs materials and other

things for the purpose.Table 16

Production Supplies

Particulars Quantity Unit Cost Total AmountApron 4 35.00 140.00Hairnet 10 20.00 200.00Face mask 10 15.00 150.00Pot holder 10 5.00 50.00Hand gloves 1 pack 30.00 30.00Total 570.00(source: Pioduran Public Market)


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The next tables show the list of the production furniture and fixtures and

housekeeping supplies that are needed to make the production area clean.

Table 17Production furnitures and fixtures

Particulars Quantity Unit cost Total costs Estimated life YearlydepreciationWorking

table 2 2,125.00 4,250.00 5 years 850.00

Chairs 5 350.00 1,750.00 5 years 350.00StorageCabinets 1 1,500.00 1,500.00 5 years 300.00

Stand fan 2 1,200.00 2,400.00 5 years 480.00Fire

Extinguisher 1 3,368.00 3,368.00 5 years 674.00

Total 13,268.00 2,654.00(source: Villanueva Furniture, BFP Pioduran)

Table 18Housekeeping Supplies

Particulars Quantity Unit Cost Total AmountBasin 2 60 120

pail 2 400 800Deeper 2 20 40Dishwashing liquid 12 bottle 36 432Dish scrubber 12 pcs 15 180Trashcan 2 95 190Dust pan 2 45 90Broom 2 100 200Floor Mop 2 150 300Total 2, 352(source: Pioduran Public Market)


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Waste Disposal Scheme

The proponents are conscious of the environment with the proper disposal of

waste materials that will be strictly complied. One of the main factors that should be

maintained is the sanitation of the area through proper waste disposal. The proponent will

be avoid necessary hazard to the environment and to the community. Plastic bags and

other wrappers can be recycled or reused for the purposes.

Trashcan will be placed in the conspicuous part of the building to dispose

properly. Likewise the good drainage system will be secured and always to be of good

condition to ensure that it will be environment and neighborhood friendly.

Quality Control Strategy

One of the concerns in business is to produce high quality products that will

promote the costumers safety in business producing right quality of the product is one of

the most important factors to consider this is achieved starting from the purchase of the

raw materials until the finished product is distributed.

The producers should see to it that the utensils to be used are clean and sterilized,

tools and equipment in good condition to ensure continuity in the production activities. A

blender machine is needed to make the product be of uniform texture and quality of the

product.

Workers are required to wear apron, hairnet, handgloves and face mask during the

product on process and packaging to avoid contamination of bacteria. The production

area should observed cleanliness and prevent to coming of insects and parasites.

The finished product will placed in boxes and distributed to their respective area

to avoid breakage.


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Plant Layout

The building is to be rented from the proponents parents amounting to Php.800

per month. The building light and other facilities are to be renovated and improve. The

proponent prefers this location because there is ample supply of water and electricity.

Manufacturing is the type of the business and it needs a right space to provide

good working conditions in the operation of production.

Building facilities

To ensure a continuous production activity, the equipment must be placed in their

respective areas and the area must be in proper order. Building will be rented at fixed

amount of 800 every month.

The building must have an office the estimated cost of the construction of the office is

estimated of Php.32,430.00

Table 19Total Cost for Renovation

Particulars AmountSand (400 cans) 800.0080 Cement 17,600.0023 pcs. Metal (cabilla) 2,300.00175 pcs. of hollow blocks 2,450.00Paints (3 gallons) 1,800.00Others 2,300.00

Fluorescent (2pcs.) 1,600.00 Nail #1,2,3,4 (12kls.) 780.00Add: 2 Laborers (7 days 200/day) 2,800.00Total 32,430.00(source: APPAMP Trading)


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COST OF PRODUCTIONUnit Production Cost

(Monthly Basis)

Direct Cost:

Direct Materials Php.5,140.00Packaging materials 40,320.00Direct Labor 25,512.00Total direct costs Php.70,972.00

Overhead expense:

Production tools and utensils Php.3,887.00Housekeeping supplies 2,352.00Rent expense 800.00Utility costs 5,124.40

Depreciation:

Equipment Php. 143.33Furniture and fixture 221.16Building 2,702.50 15,230.39

Total production costs: 86,202.39Divide: production volume 2,560.00Unit cost Php.33.67Add: Mark-up (7%) 2.35Unit selling price (per bottle) Php.36.02


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The proposed project will be located at Sta. Cruz DonsolSorsogon. It is an ideal

Location which will bring a great competitive advantage. The location was owned by the

Proponents family.

UTILITIES REQUIREMENTS

Utilities are necessary required in the operation of the business to make the

production faster, easier and convenient. It mainly composed of electricity for lighting,

ventilation and for using electrical tools/equipment, and water for mixing, drinking and

washing.

These are presented in table 20.

TABLE 20UTILITIES REQUIRED AND COST

UtilitiesProduction

Month YearWater 30.00 360.00

Electricity 5,094.40 61,132.80

Total 5,124.40 61,492.80

(source: SORECO)

The water bill is fixed at a cost of Php.30.00 monthly. The electrical power supply

will be provided by the SORECO with a rate of Php.11.00 the required electricity to be

consumed and its cost was determined by computing the consumed power at a given time

then multiplied by the rate per kilo watt hour.


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LABOR REQUIREMENT

The required number of labor for the business operation will be four (4)

production workers. The two workers will perform in the preparation of the ingredients

and packaging. And the two workers will perform in the mixing and fermenting section.

Their working time will be 8 hours per day. They will receive Php.25.50 per hour which

is equivalent to Php.204.00 per day each of them will avail fringe benefits such as Phil.

Health and SSS.Salaries will be given at the 15 thand 30 thday of the month.

The monthly compensation together with the fringe benefits that the workers will

received as indicated in table 21.

TABLE 21DIRECT LABOR AND FRINGE BENEFITS

Directlabor

Labor cost SSS Philhealth No. Daily Month Year Month Year Month Year

Production

worker 11 204.00 4,896.00 44,064.00 353.00 4,236.00 50 600

Productionworker 2 1 204.00 4,896.00 44,064.00 353.00 4,236.00 50 600



Total 816.00 19,584.00 451,584.00 1,412.00 16,944.00 200.00 2,400.00

The business will not operate without the help of manpower. It is proper for the

business to allocate compensation and benefits to its worker not just as a reward but it is

requirement by law.


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TABLE 22OFFICE SUPPLY

(1 Year)

Quantity Particulars Unit cost Total cost2pcs Record book 125.00 250.00

12pcs Ball pen (Faber castle) 10.00 120.00

5pcs Official receipt 1,000.00 5,000.002pcs Calculator 150.00 300.002pcs Scissor 25.00 50.00100sheet Bond paper .50 50.002pcs Stapler 75.00 150.005pcs White out 26.00 130.005 box Staple wire 20.00 100.00Total 6,150.00(source: Pavia Trading,Pioduran)

Table 22 shows the enumerated list of office supplies to be utilized in the

operation of the proposed business.

TABLE 23OFFICE FURNITURE AND FIXTURE

Particulars Quantity Unit cost Total costsEstimated

lifeYearly

depreciationOffice table 1 2,500.00 5,000.00 5 years 1,000.00Office chair 3 900.00 2,700.00 5 years 500.00

Stand fan 1 1,200.00 1,200.00 5 years 240.00Filingcabinet 1 1,600.00 1,600.00 5 years 320.00

Total 10,500.00 2,060.00

Table 23 shows the total amount of office furniture and fixture needed for

administrative.


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ORGANIZATIONALAND MANGEMENTSTUDY


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FORM OF BUSINESS ORGANIZATION

The proponents prefer a sole proprietorship as the form of business organization.

thenorganizations is owned and manage by sole. This type of business organization has

several advantages where it is best for his business. It can start its operation as soon as therequired permits and licenses being authorized by the law are served. Another advantage

is that the owner can make moves unknown to his competitors since he is not required by

the law to share information to the advantage of the proponent with other competitors and

the owner has a direct contact with his employees thats why there exist an open

communication with them for what problem that can encounter by the employees may

arise then the proponent can immediately resolve it. And the decisions are made solely by

the proponent regulations regarding the business operation whatever decisions are

immediately implemented.

The organizational structure of the company will be in line form which is simply

indicated in figure

figure 4ORGANIZATIONAL CHART

Production Manager

Productionworker 4

Productionworker 2

Productionworker 1

Productionworker 3


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Duties and responsibilities

Production Manager

Overall manager of the firm who supervise the performance of the workers in the

production area regarding quality control. Acts as the secretary who does the bookkeeping and keeps all the records of

business transaction.

Does the financial statement reports, cashiering and all office works.

Does the selling and marketing procedures in all business transactions.

Does the promotion, sales talk with the clients, and delivery of the products to the

customers and the order taking.

Production worker 1 and 2

Performs the production processes such as preparation of the ingredients and

packaging

keeps the cleanliness and orderliness in the production area.

Qualifications:

Male Or Female

20-28 years of age

At least high school graduate

Must be efficient, hardworking, honest, punctual and willing to be trained

and work at a given schedule.


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Production worker 3 and 4

Performs the production processes and procedures such as blending, mixing and

fermenting of the products.

Maintains the high quality standards of raw materials in the production of the products.

keeps the cleanliness and orderliness in the production area.

Qualifications:

Male Or Female

20-28 years of age

At least high school graduate

Must be efficient, hardworking, honest, punctual and willing to be trained

and work at a given schedule.

MAN POWER COMPENSATION SCHEME

The firm will require four (4) production worker of Nata de Langka. Their

working hours will be eight (8) hours and will receive Php.25.50 each per hour which is

equivalent to Php.204.00 per day or Php.3,264.00 monthly and Php.39,168.00 for the

total annual salary. They will avail fringe benefits each such as SSS and Phil health

which will be included to their monthly salary.

In the administrative department there will be only one (1) manager who will

receive a daily salary of Php.370.50 or Php.5,928.00 monthly and Php.71,136.00 for the

annual salary. There will be also SSS and Phil health benefits for the management the

salaries will be given every 15 th and 30 th day of the month.


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Table 24 shows the manpower compensation of the direct and indirect labors of

the proposed business with the corresponding fringe benefits.

TABLE 24

MANPOWER COMPENSATION AND FRINGE BENEFITS

Position Labor costs SSS Phil healthSalary and fringe

benefitsMonthly Annually Monthly Annually Monthly Annually Monthly Annually

Managers 5,928.00 71,136.00 624.00 7,488.00 125.00 1,500.00 6,677.00 80,124.00Worker 1 4,896.00 44,064.00 353.00 4,236.00 50.00 600.00 5,299.00 52,200.00Worker 2 4,896.00 44,064.00 353.00 4,236.00 50.00 600.00 5,299.00 52,200.00Worker 3 4,896.00 44,064.00 353.00 4,236.00 50.00 600.00 5,299.00 52,200.00Worker 4 4,896.00 44,064.00 353.00 4,236.00 50.00 600.00 5,299.00 52,200.00

Total 25,512.00 229,608.00 2,036.00 24,432.00 325.00 3,900.00 27,873.00 288,924.00


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FINANCIAL STUDY


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FINANCIAL ASSUMPTION

1. Working capital will be computed for one month

2. Contingences are assumed to be 5% of the working capital

3.

TERMS OF SALE: The company will be involve in cash and credit sales, a.) 88% of total sales will be cash sales and estimated to be collected within 15

days b.) 2% discount will be given to cash sales.c.) 10% of credit sales is estimated to be outstanding at the end of the year.

4. Direct labor is assumed to increase 5% per year

5. The cost of raw materials is assumed to increase by 5% per annum

6. Utilities are assumed to increase by 5% annually

7. Administrative salary is assumed to increase 5% per year

8. Packaging materials will increase 3% annually

9. Office supplies have an annual increase of 3% yearly

10. Delivery expenses are expected to increase 3% yearly

11. Promotional expense is fixed 1,500.00 yearly

12. Rent expense is fixed at 9600 annually

13. Registration and licenses will increase at 3% yearly

14. Production volume is assumed to increase by 10% yearly

15. Housekeeping supplies have an annual increase of 3%

16. The selling price is assumed to increase at Php.1.00 per year

17. Production supplies is assumed to increase by 2 % yearly

18. Php. 11,520.00 will be allocated for transportation, it is assumed to increase by5% annually.

19. Depreciation expense assumed to increase 3% per year.


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TOTAL PROJECTED COST

A. Fixed AssetsBuilding Improvement Php.32,430.00Tools and utensils 1,720.00Equipments 63,600.00

Furniture and Fixtures 2,654.00Production 5,010.00`Total Fixed Assets Php.45,701.00

B. Working Capital (one month)Raw Materials Php.5,140.00Packaging Materials 42,880.00Housekeeping Supplies 2,352.00Office Supplies 512.50Utilities 524.00Direct Labor 25,512.00Administrative Salary 4,896.00Fringe benefits 800.00Rent Expense 800.00Transportation 960.00Promotional 1,500.00

Total Working Capital Php.85,876.50

C. Pre-Operating ExpensePFS Preparation Php.850.00Registration, license and permits 2,050.00

Total Pre-Operating Expense Php.134,477.50

D. Contingencies (5% of A,B and C) Php.6,723.87

Total Projected Cost Php.141,201.37


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Schedule 1Computation of the Projected Household Population of

Donsol, Pio Duran and Ligao City

Formula Used:X.= Xxg + X

Where:X = Projected Household population per year

X = Projected Household population for the present year g = Growth rate

Donsol SorsogonYear 2013 total household population is

9,812 , Growth rate is 1.82%

Year 2014 = 9,812 x 1.82% + 9,812 = 9,991Year 2015 = 9,991 x 1.82% + 9,991 = 10,173Year 2016 = 10,173 x 1.82% + 10,173 = 10,358Year 2017 = 10,358 x 1.82% + 10,358 = 10,547Year 2018 = 10,547 x 1.82% + 10,547 = 10,739

Pio Duran AlbayYear 2013 total household population is



Ligao CityYear 2013 total household population is




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Schedule 2Getting the Respondent in each Mulnicipality/City

Computation for the sample size

The formula used: n = N_______ 1+n(e)

Where:

n = sample size

N = Total Household Population

e = Level of error

Solution:

n = 131,474________ 1+131,474(0.05)

= 131,474________ 1+131,474x(0.0025)

= 131,474________ 1+328.69

= 131,474________ 329.69

n = 399 Respondent


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Schedule 3Computation of the Survey Results and Percentage of the

Willingness to Buy the Product

Municipality/City No. of Respondents No. of Willing to Buy

Donsol 30 25Pio Duran 31 20Ligao City 338 287

Total 399 332

Percentage of willingness to buy = Number of respondents whose willing to buyTotal number of respondents

= 332 x 100

399= 0.832 x 100= 83.21%= 83%

feasibility study arman

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