BATANGAS STATE UNIVERSITY

College of Accountancy, Business Economics and International Hospitality Management

GRADUATE SCHOOL

BUSINESS RESEARCH

Written Report on the Topic

TECHNICAL STUDY OF FEASIBILITY STUDY
Divina Grace M. Rodriguez
Vanessa Vasquez

INTRODUCTION

COVERAGE OF THE CHAPTER

1. Objectives of the Study

2. Product
- Description of the Product
- Uses of the Product
3. Manufacturing Process
- Description of the Process
- Production Schedule
4. Plant Location and Layout
5. Machinery and Equipment
Factory
Furniture and Fixtures
Tools
Supplies
Maintenance Supplies
Administrative
Supplies
Maintenance Supplies
6. Direct Materials
7. Indirect Materials
8. Leasehold Improvements
9. Utilities
10. Waste Disposal
11. Direct Labor Requirements
12. Generalization

DISCUSSION
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 BATANGAS STATE UNIVERSITY
College of Accountancy, Business Economics and International Hospitality Management
GRADUATE SCHOOL

What is Technical Study?

Objectives of the Study

 Indicate a general objective (specific objective #2 in Chapter 1); and specific
objectives (limit 4-5 objectives)

Sample
Objectives of the Study
The general objective of the study is to determine the technical soundness of
Milky Carrot Cookies. Specifically, it attempts to discuss the following objectives:
1. To describe the nature of the product and its uses;
2. To illustrate the manufacturing process and describe the selling operation for
the product;
3. To determine the necessary equipment, facilities, materials, labor and other
requirements to manufacture and sell the product;
4. To determine the annual production capacity; and
5. To identify the appropriate location, size and layout for the business.

Product Description
 Name of the product; reason for choosing it
 Properties of the product – physical or chemical, dimension, color, design, size,
feature, nutritional content, safety (LQCC) whichever is applicable

Description of the Product

“Daing Flakes” is categorized as a convenience product. It is a ready to eat
side dish made from sun-dried fish bottled in vegetable oil with selected spices. Daing
Flakes weighs 227 grams and pack and sealed in 8 ounces glass jar bottled. Each
ingredient in the product contains no preservatives or chemical that are harmful for the
health. The vegetable oil helps to preserved the product in a long time. The life span
of the product is three months it could be frozen or not. This product had undergone
with microbiological resulting to negative in salmonella and E.coli. Customers are
then assured of its good quality and its affordable price.
The following is the nutritional facts of Daing Flakes.
Nutritional Facts:
Serving Size: 1 bottle (8 oz)
Calorie: 855 Kcal
Fat content: 59g
Calories from fat: 531 kcal
*Percent daily values are based on a 2,000 calorie diet. Your daily values maybe
higher or lower depending on your calorie needs.
Table 3.1 presents the nutritional facts of Daing Flakes.
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 BATANGAS STATE UNIVERSITY
College of Accountancy, Business Economics and International Hospitality Management
GRADUATE SCHOOL

Table 3.1
Nutrition Facts of Daing Flakes

Nutrients Amount per serving size % of RENI

Carbohydrate 20 7
Protein 59 93
Fat 59 101
Calcium 291 29.1
Phosporus 618 49.4
Iron 9 32.5
Total Vitamin A 48 10.6
Thiamin 0 17.4
Riboflavin 0 24.2
Niacin 18 126.2
Ascorbic Acid 12 16.7

Interpretation:
The product Daing Flakes contains relatively high amounts of fat and protein as
well as vitamin Niacin and minerals iron and phosphorus. It is also a good source of
ascorbic acid, riboflavin, thiamine and calcium but is low in carbohydrates and Vitamin A
content.

Uses of the Product

Intended product use; indicate the major user of the product

Uses of the Product

The “Milky Carrot Cookies” is considered as a snack. It is a good substitute for
meal. People need a regular meal schedule, and they need snacks too. Cookies are now
eaten at any time of the day-coffee breaks, for dessert, a snack and even given as a
welcoming gift. This cookie can give Vitamin A that promotes growth and healthy skin and
hair, also helps eyes adjust to darkness and helps body resist infections. Nowadays, people
need nutritious food which they can afford.

Manufacturing Process
 Description of the Process
 Identify the step-by-step process used in the production of the product (time
needed, how many workers, source of material, how much/many for each
material)
 There should be a basic/benchmark why the list of processes were finalized
 Should include standard amount of materials per production (consistent with
Table 3.10, Direct Materials)
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 BATANGAS STATE UNIVERSITY
College of Accountancy, Business Economics and International Hospitality Management
GRADUATE SCHOOL

 Include pictures for each step to come up with a flowchart using pictures having
only one Figure number and title
 Include Process Flowchart (use process code from Production Management;
circle for operation, inverted triangle for storage etc.)
 Give allowance for break time

1. Preparation of Raw Materials and Measuring of Ingredients

It is very important to know the availability of raw materials to be used. Worker 1
and 2 must clean the working area as well as prepare the needed raw materials and
measure the ingredients to be used. It should have 6kg. of carrots, 8kg. of all-purposed
flour, 2kg. of sugar, 200g. of butter, 8 cans of condensed milk, 1 ½ trays of eggs and ¼kg
of salt. This process takes 15 minutes.

Production Schedule
 Describe the projected scale of operation for the next several years (5 years)
 Set the minimum and maximum rated capacity of the plant
 Consider the maximum level of capacity where all resources are fully used
 Consider the number of shirts/batches per day, if applicable
 Consider the number of operating days per year
 The set annual production should be within the identified market gap
 Asses the marketability of the product
 Specify in the table title the amount/size of your product

Sample:
Table 3.2
Production Schedule (10pcs/pack)
Year Daily Weekly Monthly Annually
2013 120 720 2,880 34,560
2014 132 792 3,168 38,016
2015 145 871 3,485 41,818
2016 160 958 3,833 45,999
2017 176 1,054 4,217 50,599

Plant Location

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 BATANGAS STATE UNIVERSITY
College of Accountancy, Business Economics and International Hospitality Management
GRADUATE SCHOOL

 In choosing your location, consider the following factors; consult the CPDO of
your target area for zoning, strategic location for your business,
accessibility/availability of raw materials, availability of cheap and moderately
priced utilities such as power, water, telephone service or fuel, proximity to the
distributing outlets, and rental cost.
 Zoning certificate is required

Plant Size and Layout

 A plant layout should be clearly depicted through diagrams and descriptions. A
good plant layout is characterized by minimum materials handling, effective
space utilization, smooth work flow through the plant, safe and conducive
working area for the workers, safety and sanitation facilities and flexibility of
arrangement
 Specific measurement per area and the whole area should be included
 Plant size and rental fee per month should be included <lease contract is
required>

Factory Equipment
 It must be identified and individually listed according to type and use. Identify if
it is local or imported, as well as the manner and cost of transportation.
Identify also if it is improvised equipment.
 Present in tabular form (Name of equipment used, quantity, price per unit and
total price)
 Add short description for each of important Factory Equipment, include capacity
if applicable

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 BATANGAS STATE UNIVERSITY
College of Accountancy, Business Economics and International Hospitality Management
GRADUATE SCHOOL

 Applicable to all tables – Price Quotation (see format) is required, name of

company/ies should be reflected at the bottom of the table as source
 Add a discussion for every table

Sample:

Table 3.3
Factory Equipment
Description Quantity Unit Cost Total Cost
Gas Oven 2 Php24,000.00 Php48,000.00
Molder 12 180.00 2,160.00
Sealer 1 549.75 549.75
Gas Stove 1 779.75 779.75
Weighing Scale 1 115.00 115.00
Mixer 1 2,000.00 2,000.00
Frying Pan 1 88.00 88.00
Total Php27,712.50 Php53,692.50
Sources: DIY Shop and COMALEN Trading

[Gas Oven. Enclosed compartment for heating, cooking or baking of food

especially cookies. It is an electric oven having 3 layers.]

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 BATANGAS STATE UNIVERSITY
College of Accountancy, Business Economics and International Hospitality Management
GRADUATE SCHOOL

Factory Furniture and Fixtures

Table 3.4
Factory Furniture and Fixtures
Description Quantity Unit Cost Total Cost
Ceiling Fan 1 Php980.00 Php980.00
Wall Clock 1 150.00 150.00
Working Chair 2 280.00 560.00
Working Table 1 1,500.00 1,500.00
Total Php2,910.00 Php3,190.00

Factory Tools and Supplies

Table 3.5
Factory Tools and Supplies
Description Quantity Unit Cost Total Cost
Aluminum Tray 24 Php270.00 Php6,480.00
Apron 3 35.00 105.00
Can Opener 1 88.00 88.00
Hairnet 6 5.00 30.00
Knife 2 27.50 55.00
Mixing Container 2 220.00 440.00
Pot Holder 12 5.00 60.00
Rolling Pin 2 88.00 176.00
Sifter 1 65.00 65.00
Total Php803.50 Php7,499.00
Sources: DIY Shop, Bay City Mall and Excel Toms

Maintenance Supplies

Table 3.6
Maintenance Supplies
Description Quantity Unit Cost Total Cost
Broom 1 Php50.00 Php50.00
Dust Pan 1 35.00 35.00
Rags 5 20.00 100.00
Trash Can 1 35.00 35.00
Soap 24 19.00 456.00
Mop 1 70.00 70.00
Spong 12 16.00 192.00
Pail 1 30.00 30.00
Dipper 1 15.00 15.00
Fire Extinguisher 1 2,800.00 2,800.00
Total Php3,090.00 Php3,783.00
Sources: Old Public Market, Batangas City

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 BATANGAS STATE UNIVERSITY
College of Accountancy, Business Economics and International Hospitality Management
GRADUATE SCHOOL

Office Furniture and Fixtures

Table 3.8
Office Furniture and Fixtures
Description Quantity Unit Cost Total Cost
Office Table 1 Php2,000.00 Php2,000.00
Office Chair 1 949.00 949.00
Wall Clock 1 150.00 150.00
Filling Cabinet 1 799.00 799.00
Total Php3,898.00 Php3,898.00
Sources: TODOS AMIGOS & J. Gainza’s Furniture

Office Supplies
Table 3.9
Office Supplies
Description Quantity Unit Cost Total Cost
Ballpen 10 pieces Php5.00 Php50.00
Bond Paper 1 ream 105.00 105.00
Business Receipt 3 pads 47.25 141.75
Calculator 1 piece 290.00 290.00
Envelope 8 pieces 1.25 10.00
Folder 3 pieces 3.00 9.00
Pencil 8 pieces 5.00 40.00
Record Book 2 pieces 41.00 82.99
Scissors 2 pieces 15.00 30.00
Sharpener 1 piece 5.00 5.00
Stapler 1 piece 30.00 30.00
Staple Wire 3 boxes 4.75 14.25
Total Php552.25 Php807.00
Sources: Apiong Store, New Quality & Nat’l Bookstore SM

Direct Materials
 Description and specification on physical, mechanical and chemical properties
must be given
 Include a tabular presentation aside from the description, as direct materials
(description, quantity, unit, unit cost, total cost), most important material first to
the least important
 A basis for the selection of raw materials and supplies must be presented, also
where to get the source of supply (Contract of Supply), include in appendices
 Finalize first the proportion of ingredients per pack/per piece, then multiply with
annual production schedule, example, carrots 1728kg divided by 34,560 is
0.05kg, meaning each pack of cookies need 0.05kg of carrots

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 BATANGAS STATE UNIVERSITY
College of Accountancy, Business Economics and International Hospitality Management
GRADUATE SCHOOL

 Total direct material for each material per year divided by the number of working
days should be equal to the standardized amount of that particular material per
day
 The summation of amount of ingredients/materials per pack/pc should be
approximately equal to the actual size/amount of the product
 The unit to be used for quantity is the unit used when purchasing the material, but
also have an estimate of the approximate weight (ex: sacks -> kg)
 Consider the appropriate unit when purchasing in bulk orders (ex: eggs – trays
instead of pcs)

Table 3.10
Direct Materials

Description Quantity Unit Cost Total Cost

Carrots 1728 kg Php50.00 Php86,400.00
All-purpose flour 96 sacks 1,020.00 97,920.00
Sugar 12 sacks 2,530.00 30,360.00
Butter 600 pcs. (100g) 28.00 16,800.00
Condensed Milk 2500 cans 34.40 86,00.00
Eggs 500 trays 100.00 50,000.00
Salt 50 kg. 8.00 400.00
Total Php3,770.40 Php367,880.00
Sources: Metro South Dynamic Sale Center, Ideal, Old & New Market

Indirect Materials
 Include packaging and label cost

Table 3.11
Indirect Materials
Description Quantity Unit Cost Total Cost
Label 34,560 Php1.00 Php34,560.00
Foil 254 28.00 7,112.00
Plain Plastic 346 45.00 15,570.00
Total Php74.00 Php57,242.00
Source: BIMARCO Enterprise

Lease and Leasehold Improvements

 Discuss the monthly rent and initial cost for the improvement

Utilities
 Electricity, water, gas, fuel, telephone, etc.
 Describe the amount, cost and sources of the utilities

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 BATANGAS STATE UNIVERSITY
College of Accountancy, Business Economics and International Hospitality Management
GRADUATE SCHOOL

 Utilities must be determined in relation to production schedule and capacity

utilization
 Include a tabular presentation
 Alternative sources of these utilities and the feasibility of their use must also be
described

Table 3.13
Utilities Expense
Description Monthly Consumption Annual Consumption
Electricity Php1,000.00 Php12,000.00
Water 410.00 4,920.00
Telephone 599.00 7,188.00
LPG 1,480.00 17,760.00
Total Php3,489.00 Php41,868.00

Waste Disposal
 A description of quantity, manner of disposal and cost involved in doing with
expected waste from production is necessary
 If there is an income generated from the waste, this should be included in the
financial statement

Direct Labor Requirement

 Include the people involved in production
 The number of workers to be employed for each job classification, the pay scale,
employee development program and organizational set up

Generalization
 Provide a discussion answering your list of specific objectives

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