Itlogan sa Dabaw Farm

A Feasibility Study

Presented to the School of Business of Management Education

Bachelor of Science in Accountancy

Submitted by:
Alonso, Jan Daryl D.
Ang, May Roselle Joyce B.
Cabreros, Iris Kathleen C.
Coma, Roselyn M.
Fermilan, JazelRubie C.
Fuentes, John Frances C.
Lee, Marisa D.
Lindio, Rachelle B.
Macas, Mariah Mickaellah B.
Tantog, Jaselle P.

November 2019
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Approval Sheet

The feasibility study of “Itlogan sa Dabaw Farm” prepared by Jan Daryl D.

Alonso, May Roselle Joyce B. Ang, Iris Kathleen C. Cabreros, Roselyn M.

Coma, JazelRubie C. Fermilan, John Frances C. Fuentes, Marisa D. Lee,

Rachelle B. Lindio, Mariah Mickaellah B. Macas, Jaselle P. Tantogin

partial fulfilment for Management Consultancy (Actg 109) has been examined

and hereby recommended for approval and acceptance.

JOHN PAUL S. TAN, CPA, MDM, CATP

Adviser

Panel of Examiners

Accepted and approved, after the presentation of the study with a grade of

___________.

PAQUITO P. PASIA JR., MM

Chairperson

SUSAN S. CRUZ, PhD, DBA OFELIA M. SEVILLA, CPA,MM

Member Member
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Acknowledgement

The proponents of this study would like to humbly express their gratitude

and appreciation to the people who imparted their time and knowledge for the

success of this project. To our panel of examiners, Mr.PaquitoPasia, Jr., MM, Ms.

Susan S. Cruz, PhD, DBA, Ms. Ofelia M. Sevilla, CPA, MM, for the objective

criticisms and recommendations to the betterment of this study.

To our adviser, Mr. John Paul S. Tan, CPA, MDM, CATP, for hisadvice,

sharing of his knowledge, ideas and expertise for the improvement of our study

and guiding us through the process of making and finishing this project, and also

for being very considerate of our class schedules in giving and extending the

deadlines.

To our dearest family who gave us encouragement not only financially but

also for unending emotional support all throughout this journey, in all aspects of

things.

To our friends, teachers and classmates, who believed in us and continue

giving their undying support to help us strive harder and do well.

To the person who rendered time and expertise, Ms.Shaina Mae Mozo for

designing our plant layout and helping us without any hesitation.

Last but not the least, to God the Almighty Father, for the gift of knowledge,

wisdom, understanding, strength and protection as we finish this study.

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Executive Summary

Itlogan sa Dabaw Farm is formed by ten young entrepreneurs engaging in

distributing of commercially-produced chicken eggs. The farm also involved in

raising, processing, and marketing the chicken eggs to particular market. The

business aims to provide quality and standard chicken poultry eggs for

wholesalers such as public markets, and other food establishments like

restaurants and egg vendors. The farm is situated at Baguio District, Calinan,

Davao City which is suitable for raising fowls and livestock’s since aware of the

fact that it must be in an area where safe and clean environment is needed for

good production. It has to make sure also that it is away from neighbouring town

for health and security purposes, in order for business as well to continue in the

long run process. Furthermore, there will be consistent monitoring of the

components of the production process such as the handling and storage of eggs,

hatchery management, and maintenance of proper nutrition as well as the proper

upkeep of the facilities especially designed for the farm and chickens. To attract

the target market, the business will see to it that proper service is highly

maintained, well-access for the distribution of eggs, and a promotion such as in

terms of delivery for every loyal customers. The business will be operated by two

departments: Financial and Operational specifically has 4 employees consist of

one accountant, one operational manager, one chicken farmer and one driver.

These employees will be supervised by the general manager. Each will undergo

particular qualifications to ascertain its duty and responsibilities.

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Starting up the business, a contribution of 163,000 common shares with

100.00 par value will be shared. The farm will be having a yearly increase of 4%

in its projected sales. As computed, the study finds a net present value (NPV) of

26,980,282.38 with a discount rate of 15% and a 14% internal rate of return (IRR)

which will attribute positive value to the business. The return on investment is

27.6% with a payback period of 3 years and 8 months.

Itlogan sa Dabaw Farm is highly needed in the industry since there is a

high demand of eggs and chickens in every region particularly in Davao because

of the increasing of population which result to a shortage of supply. The business

does not only benefit the customers who are very health conscious but helps the

farmers to improve their standard of living. It will also rise opportunity for investors

to put their money instead in this kind of business since it will surely secure a

return of their investment. Lastly, the business is beneficial to the government

since there will be assurance of increase in income of the latter in form of taxes as

payment.
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Table of Contents

Page

Title Page i

Approval Sheet ii

Acknowledgement iii

Executive Summary iv

List of Tables ix

List of Figures xii

Introduction xiii

Business Name xiii

Business Description xiii

Business Logo xiv

Chapter

1 Marketing Aspect 1

Product Description 1

Target Market 2

Demand and Supply Analysis 5

Competitor Analysis 12

Pricing Structure 15

Projected Sales 16

Marketing Program/Strategies 19

Marketing/Selling Expenses 23
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2 Technical Aspect 24

Technical Requirements 24

Government Requirements 25

Production/Operation Process 26

Production Schedule 36

Labor Requirement 37

Machinery/Equipment Requirements 38

Raw Materials Requirements 39

Plant/Factory Location 41

Plant Lay out 43

Maintenance and repairs of fixed asset 45

Waste Disposal System 46

Quality Control System 47

Production Cost 52

3 Organization & Management Aspect 56

Legal Form of Business 56

Organizational Structure 57

Qualifications of Officers 58

Recruitment, Hiring and Training of Personnel 59

Office Manpower Requirement 60

Office Equipment 61

Gantt Chart of Activities 62

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4 Financial Aspect 64

Total Project Cost 64

Sources of Financing 65

Financial Assumptions 65

Projected Financial Statement 67

Financial Analysis 73

5 Socio-Economic Aspect 81

Customer 81

Community 81

Employment 86

Environment 86

Government 87

Appendices

A Notes to Financial Statements 88

B Schedules 97

References 106

Curriculum Vitae 110

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List of Tables

Table Page

1 Population of Respondents 4

2 Total Demand 6

3 Potential Demand 7

4 Supply of Existing Competitors 9

5 Market Gap 10

6 Year One Projected Production 10

7 Target Market Share 11

8 Competitors Price 14

9 Pricing Structure 15

10 Projected Sales in Volume per month and per year 16

11 Projected Sales in Volume and in Peso 17

12 Brooding Stage Feed Consumption (Week 1 to 2) 26

13 Brooding Stage Feed Consumption (Week 3 to 8) 27

14 Brooding Stage Light Consumption 28

15 Brooding Stage Vaccination Consumption 29

16 Growing Stage Feed Consumption (Week 9 to 10) 30

17 Growing Stage Feed Consumption (Week 13 to 18) 30

18 Growing Stage Light Consumption 31

19 Types of Diseases and Vaccination 32

20 Layering Stage Feed Consumption (Week 19 to 96) 33

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21 Layering Stage Light Consumption 35

22 Production Schedule 36

23 Labor Requirements 37

24 Machinery, Tools and Equipment Requirements 38

25 Raw Materials Requirements 39

26 Type of Vitamins 40

27 Types of Vaccines 40

28 Factors that affect Quality maintenance 47

29 Annual Total Cost Production 52

30 Production Cost per Unit 55

31 Qualification of Officers 58

32 Recruitment, Hiring of Personnel 60

33 Office Manpower Requirement 60

34 Office Requirement 61

35 Office Furniture and Fixtures 61

36 Gantt Chart od Activities 62

37 Total Project Cost 64

38 Projected Statement of Financial Position 67

39 Projected Statement of Financial Performance 69

40 Projected Statement of Cash Flows 71

41 Break-even Point 73

42 Payback Period 74
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43 Net Present Value 74

44 Internal Rate of Return 75

45 Return on Investment 76

46 Return on Equity 76

47 Gross Profit Ratio 77

48 Net Income to Sales Ratio 78

49 Current Ratio 78

50 Debt-to-Asset Ratio 79

51 Equity-to-Asset Ratio 79
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List of Figures

Figure Page

1 Business Logo xiv

2 Target Market 3

3 Total Demand and Supply 5

4 Channel Intermediaries 13

5 The Location 41

6 Plant Lay-out 43

7 Waste Management 46

8 Organization Structure 57
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Introduction

Business Name

The name of the proposed business is “Itlogansa Dabaw Farm”. It is

literally translated as “a place for eggs in Davao”. The word "itlog" is the Filipino

equivalent for the English word “egg” therefore “itlogan” has something to do

with eggs. On the other hand, “Dabaw” came from its place of origin, Davao

City, deriving its spelling from the city’s dialect.

Business Description

One of the problems encountered in our region these past years was the

shortage of poultry birds. Accordingly, Davao City is in need of 20,000,000 poultry

birds to boost the poultry production and to cope up with the consumption demand

as well. There was scarcity because regions in Luzon were getting their old day

chicks here in Davao City. The population is also increasing as years passed

resulting to increase in the demand of poultry products. There is also an implied

shortage of poultry eggs during the Christmas season and class opening.

The study is about poultry eggs specializing in layering. The business

wanted to be part of the egg industry that will help to fill in the market gap and to

be able to encourage other investors to give attention to this kind of business.

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This will not only help to address the problems facing in the region but it also

helps thefarmers to improve their living.

Quality eggs will be provided to the target market at an affordable price.

Delivery will also be a part of the services given.

Business Logo

Figure 1. Itlogan sa Dabaw Farm Logo

Figure 1 represents the official logo of Itlogan sa Dabaw Farm. The

proponents chose this design to clearly show the nature of our business. The

chicken is where the eggs come from and the eggs in the logo represent the main

product of the company. The graycolor in the background will help to lighten up

the image and stimulates attraction to various customers since it is pleasant to

see.
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Vision

Itlogansa Dabaw Farm aims to provide local products at highest levels of

specification, standards and quality and be the leading suppliers of chicken eggs

in Davao City.

Mission

Itlogan sa Dabaw Farm is committed in promoting high quality egg

products to the customers.

Objectives

The objective of the proposed project is to give satisfaction to the

wholesalers, individual consumers and other food establishments.