A PROJECT FEASIBILITY STUDY OF A PROPOSED PRODUCTION OF “FERMENTED MUSA

ACUMINATA: AN ALTERNATIVE SOURCE OF VINEGAR”

A Thesis in

IE 52 PROJECT FEASIBILITY STUDY

Presented to the Faculty of Industrial Engineering

College of Engineering Department

University of Cebu – Main Campus

Cebu City, Cebu, Philippines

In Partial Fulfillment

Of the requirements for the degree

BACHELOR OF SCIENCE IN INDUSTRIALENGINEERING

By:

Abejo, John Carlo Nino V.

Caingles, Marjorie L.

Katada, Erica M.

Pilapil, Stephanie G.

December 2019
 ACKNOWLEDGMENT

First, the researchers are grateful to our God Almighty for His blessings and

guidance that the researchers were able to impart their knowledge and skills to the

community and for the future generations to come.

Second, the researchers of the study take this opportunity to extend their

gratitude to the faculty of the Industrial Engineering Department for their continuous

support and dedication in helping the batch throughout the study. The researchers are

greatly thankful for the passion, effort, and guidance of Engr. Arnel Moterola to all

students under his Feasibility Study course. Also, the researchers would like to thank

Engr. Rodulfo H. Dakay for giving time to share his advice and assistance to the group.

The researchers are honored and thankful to the panelists, for their professional

insights and suggestions to further improve the study; to Engr. Arnel Monterola for his

guidance and valuable expertise aiding the researchers in their study.

Lastly, the researchers are especially thankful for the undying support of their

family and peers who without them, the researchers would not find any hope and

determination to complete the study.

i
 PROJECT SUMMARY

Vinegar has long been used worldwide as a basic seasoning in the preparation

and cooking of foods. Although vinegar is generally safe, too much of a good thing could

prove harmful. According to the investigation of an inter-agency called (PNRI) Philippine

Nuclear Research Institute, 15 out of 17 brands of vinegar that are sold in the major

supermarket in the Philippines are synthetic acetic acid. Meaning, rather than naturally

fermented coconut or sugarcane, it contains chemicals for it to taste more like vinegar

even if it is only fermented for a short period of time.

In order to help prevent the same problem from happening, the team proposed

an alternative source to make vinegar. In addressing this issue, the team decided to use

Musa Acuminata (also known as “banana”) in making vinegar because it is a watery fruit

that contains a lot of sugar and can be fermented for a shorter period of time than

those of the other fruits. Though there are various choices, banana is considered to be

the best among others. The team carefully planned for the proposed project starting

from its marketing side, down to its socio-economic aspect.

The following are taken into considerations to make the proposed project

possible in the near future:

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 A. Marketing Aspect – Potential consumers, threats & opportunities are

identified, and survey was conducted to the households that are considered to be the

target market of this study. The 400 sample respondents/target market are from Lapu-

lapu City, Mandaue City, and Cebu City with a total households of 457,834. From there,

market steal, market share, and demand is calculated. For year 2019, there is 78%

chance to steal from each competitor but the team decided to get only 50% of it which

made the market share only 39% with a demand of 2,697,787 L. The promotional

strategy that will be use is advertising in which presentation and promotion of ideas,

goods, or services by an identified sponsor. They decided to use penetration pricing

because if the price is set low as of the moment, market share will increase

continuously. This is done when a new product is being launched. It is already expected

that the price will increase once the promotion period is over, and market share

objectives are achieved.

B. Technical Aspect – There are 3 different volumes of Musa Acuminata vinegar

in which buyers or consumers can freely choose; 100ml, 200ml, and 350ml (with spices).

The production area is composed of 59 workers: 26 for peeling, 4 for fermentation, 4 for

straining, 7 for 100ml filling, 2 for 200 ml filling, 1 for 350 ml filling, and 15 for sealing

and packaging. For the first year of the business, the production capacity is only

1,344,522 L if market share will increase so as the manpower and the production

capacity (depending on the performance). The facility will be located at Buaya, Lapu-

iii
Lapu City and will sit on a 1,907 sq. meter lot plus 20% allowance for future expansion,

with a total of 2289 sq. meter area. Also, the facility has an annual capacity of 282,351 L

for the year 2019.

C. Management Aspect – The organization is composed of General Manager, HR

Manager, Production Supervisor, Chemist, Procurement Officer, Sales Staff, Marketing

Staff, OIC Maintenance, Production Workers, Janitor, Security, and Driver. Before hiring

these certain people, job description & specifications are given to know whether they

are fitted to the job. Personal knowledge alone is not enough that is why they will

undergo orientation & training before they will be put to the actual production.

D. Financial Aspect – The investors/owners will be investing P1,250,000.00 each

with a total of P5,000,000.00. The team decided to invest P85,000,000.00 from the bank

as an alternative source of financing and will be paid P20,664,144.44 annually for 5

years. The product will be sold for the following prices: P18.00, P20.00, P50.00 for 100

ml, 200 ml, and 350 ml (with spices) respectively.

E. Socio-Economic Aspect – The government, environment, economy, workers,

consumers, and suppliers will benefit this project. Taxes will be paid to the BIR and they

can use it to sustain the existing project of the government or to make new project.

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Workers have health insurance and beneficiary payments like 13 th month pay, etc.

Suppliers of banana will be able to sell their rotten banana and can turn their waste into

cash. The team is not only after money or gaining profit but also helping the people and

community. If this project will expand, the team will be able to help those unemployed

people because its vision is to create local opportunity, growth, and impact in every

community and country around the world. The safety of the workers, the management,

and the consumers is the top most priority. This project will change the perspective of

the people in doing business.

v
 INTRODUCTION

Rationale

Vinegar has long been used worldwide as a basic seasoning in the preparation

and cooking of certain foods because its sharp taste makes it so useful and versatile.

Vinegar is an aqueous solution of acetic acid and trace chemicals that may include

flavorings. Vinegar typically contains 5–20% acetic acid by volume. Usually, the acetic

acid is produced by the fermentation of ethanol or sugars by acetic acid bacteria. There

are many types of vinegar, depending upon the source materials. In the past, it has

served a wide variety of functions, but today its use is largely confined to food flavoring,

production and preservation. Pederson (1967) said that vinegar can be prepared from

any watery substance that contains sugar. Natural vinegars contain small amounts of

tartaric acid, citric acid, and other acids. Vinegar has been used since ancient times and

is an important element in European, Asian, and other cuisines. A considerable quantity

of vinegar is marketed as such for domestic use. In the UK and USA the table vinegar

most widely used is cider vinegar, while in Ireland it is malt vinegar and, in grape-

growing countries, such as Italy, France, and Spain, wine vinegar. In the Far East, in

addition to the traditional rice vinegar, synthetic vinegar is very common.

Owing to the rise in consumer awareness and the inclusion of vinegar as a key

ingredient in various food applications, there has been an increase in demand for

vinegar, worldwide. Italy, which is the major producer of vinegar, holds the maximum

share in trading the product globally, whereas, Japan and China remain among the top

vi
seven countries exporting vinegar to the other countries. Traditionally produced organic

kinds of vinegar, such as apple cider vinegar and coconut vinegar from the Asia-Pacific

countries are gaining huge popularity, worldwide. Premium priced products, such as

aged vinegar is exported at a higher volume, compared to regular vinegar, as it imparts

a unique flavor to the end product. Hence, this increases the export value of different

types of vinegar from the Asia-Pacific region, leading to an increase in revenue, driving

the overall vinegar market in Asia-Pacific.

Although vinegar is generally safe, too much of a good thing could prove

harmful. Little did we know that an inter-agency investigation is underway in the wake

of a study by the Philippine Nuclear Research Institute (PNRI) that 15 out of 17 vinegar

brands are made of synthetic acetic acid, rather than fermented coconut sap or

sugarcane. The study, however, did not disclose what these brands are and did not

determine if there were any residues or contaminants found in these brands. When

synthetic acetic acid is used for vinegar, it is considered to be an adulterated product. It

is not necessarily unsafe, but under our laws, vinegar for human consumption is defined

as acetic acid from natural fermentation. Earlier, the Philippine National Research

Institute's (PNRI) study said that synthetic sources can cause cancer.

But we can do more things about this undying dilemma. There is so much that

science can do to address this issue. There are a lot of alternatives in making vinegar,

those that can be fermented for a shorter period with lesser acidity and made of natural

ingredients.

vii
 Musa Acuminata also is known as a banana plant or plantation is abundant in the

Philippines. Since banana is high in sugar and carbohydrate-containing fruit, it has a high

potential for alcohol production (Camarungan, 1940) and subsequently fermented into

vinegar. Adams (1980) cited banana vinegar production as a small-scale industry

especially in developing countries like the Philippines.

According to the survey conducted by the researchers with 400 sample sizes out

of 457,834 household populations within Cebu City, Lapu-Lapu City, and Mandaue City,

as of 2019, the result shows that there is a consumption of 3,447,491 liters of vinegar.

Highlighting the potential of Musa Acuminata, this study introduces the use of

contemporary resources to combat the issue of unnatural vinegar that is made of

synthetic acetic acid as well as providing an affordable and ecological sustainable

resource.

viii
Product Description

Vinegar is known as a good ingredient for health but banana vinegar is much

better because banana is a fruit rich in dietary fiber and vitamins it is also rich in

potassium which plays in reducing the risk of high blood pressure and stroke, increasing

strength and reducing stress. It is rich in vitamins and delicious but never cloying. This

vinegar is made from natural fermented bananas. It doesn’t contain any type of

chemicals and other ingredients. It is purely made from banana flesh that is fermented

for two months to be able to produce a natural acetic acid.

ix
 LIST OF FIGURES

Figure 1: Market Positioning -------------------------------------------------------------------------------------7

Figure 2: Bar Graph of Projected Annual Demand of Existing Vinegar -------------------------------13

Figure 3: Bar Graph of Projected Annual Demand of Musa Acuminata ------------------------------15

Figure 4: Frequency of willingness to avail the product --------------------------------------------------16

Figure 5: Bar Graph of the projected supply from year 2020-2029 ---------------------------19

Figure 6: Pie Chart of the Competitors Market Share -------------------------------------------22

Figure 7: Bar Graph of the Demand-Supply Gap from year 2020-2029 ---------------------23

Figure 8: Pie Chart of the New Market Share -----------------------------------------------------25

Figure 9: Facebook Page -------------------------------------------------------------------------------31

Figure 10: Assembly Drawing -------------------------------------------------------------------------41

Figure 11: Exploded Drawing ----------------------------------------------------------------------------------41

Figure 12: Product Structure Tree -----------------------------------------------------------------------------42

Figure 13: Flow Process Chart ----------------------------------------------------------------------------------45

Figure 14: Cross Functional Chart -----------------------------------------------------------------------------46

Figure 15: Lot for Sale -------------------------------------------------------------------------------------------76

Figure 16: Vicinity Map ------------------------------------------------------------------------------------------80

Figure 17: Manufacturing Plant Location -------------------------------------------------------------------80

Figure 18: Floor Plant Layout -----------------------------------------------------------------------------------81

Figure 19: Top View ---------------------------------------------------------------------------------------------82

Figure 20: Front View --------------------------------------------------------------------------------------------82

Figure 21: Left View ----------------------------------------------------------------------------------------------83

Figure 22: Back View --------------------------------------------------------------------------------------------83

Figure 23: Isometric View --------------------------------------------------------------------------------------84

Figure 24: Activity Relationship Chart -----------------------------------------------------------------------84

Figure 25: Building Structure ----------------------------------------------------------------------------------87

Figure 26: Floor Plan (with flow of production) -----------------------------------------------------------89

Figure 27: Plumbing and Electrical Layout ----------------------------------------------------------------- 91

Figure 28: Organizational Structure -------------------------------------------------------------------------- 107

Figure 29: SSS Contribution ------------------------------------------------------------------------------------ 133

Figure 30: Phil-Health Contribution -------------------------------------------------------------------------- 134

Figure 31: Pag-ibig Fund Contribution ----------------------------------------------------------------------- 134

 LIST OF TABLES

Table 1: Supply of Competitor’s Vinegar ------------------------------------------------------------19

Table 2: Demand-Supply Gap (L) ----------------------------------------------------------------------23

Table 3: Market Share Analysis ------------------------------------------------------------------------24

Table 4: Product Life Cycle ------------------------------------------------------------------------------30

Table 5: Product Structure Matrix (100ml plain) --------------------------------------------------43

Table 6: Product Structure Matrix (200ml plain) --------------------------------------------------43

Table 7: Product Structure Matrix (350ml w/ spices) ---------------------------------------------44
Table 8: Daily Work Schedule --------------------------------------------------------------------------47
Table 9: Detailed Flow Process Chart -----------------------------------------------------------------48

Table 10: Annual Production Capacity (Bottles) ---------------------------------------------------50

Table 11: Specifications of Manufacturing Equipment -------------------------------------------53

Table 12: Raw Materials ---------------------------------------------------------------------------------56

Table 13: Specifications of Office Equipment -------------------------------------------------------59

Table 14: Safety and Security Equipment -----------------------------------------------------------60

Table 15: Specifications of Personal Protective and Auxiliary Equipment -------------------64

Table 16: EOQ of Banana --------------------------------------------------------------------------------67

Table 17: EOQ of Bottle ----------------------------------------------------------------------------------67

Table 18: EOQ of Label -----------------------------------------------------------------------------------68

Table 19: EOQ of Sale -------------------------------------------------------------------------------------68

Table 20: Manufacturing Equipment -----------------------------------------------------------------69

Table 21: Office Equipment -----------------------------------------------------------------------------69

Table 22: Safety and Security Equipment -----------------------------------------------------------70

Table 23: Personal Protective and Auxiliary Equipment -----------------------------------------70

Table 24: Production Headcount Summary ---------------------------------------------------------74

Table 25: Decision Matrix for Manufacturing Plant Location -----------------------------------75

Table 26: Legend of Activity Relationship Chart--------------------------------------------------85

Table 27: 2019 Electrical consumption---------------------------------------------------------------92

Table 28: Projected Electrical Consumption --------------------------------------------------------93

Table 29: 2019 Water Consumption------------------------------------------------------------------93

Table 30: Projected Water Consumption ------------------------------------------------------------94
Table 31: Telephone Consumption --------------------------------------------------------------------94
Table 32: Projected Communication Consumption -----------------------------------------------94
Table 33: Gantt Chart of Pre-Operating Activities -------------------------------------------------95
Table 34: Personnel Plantilla --------------------------------------------------------------------------109
Table 35: Working Schedule --------------------------------------------------------------------------119
Table 36: List of Regular Holidays --------------------------------------------------------------------120
Table 37: List of Special Non-working Holidays --------------------------------------------------120
Table 38: Annual Holidays and Weekends Tally --------------------------------------------------120
Table 39: Company Code of Discipline--------------------------------------------------------125-126
Table 40: Offenses--------------------------------------------------------------------------------------127
Table 41: Investment -----------------------------------------------------------------------------------141
Table 42: Selling Price -----------------------------------------------------------------------------------146
Table 43: Sales Forecast --------------------------------------------------------------------------------147
Table 44: Accounts Receivable -----------------------------------------------------------------------148
Table 45: Pre-Operating Expenses -------------------------------------------------------------------150
Table 46: Operating Expenses (2019-2021) -------------------------------------------------------151
Table 47: Operating Expenses (2022-2025) -------------------------------------------------------152
Table 48: Operating Expenses (2026-2029) -------------------------------------------------------153
Table 49: Fixed Assets----------------------------------------------------------------------------------154
Table 50: Total Project Cost ---------------------------------------------------------------------------155
Table 51: Cost of Goods Sold (2019-2023) ---------------------------------------------------------156
Table 52: Cost of Goods Sold (2025-2029) ---------------------------------------------------------157
Table 53: Income Statement (2019-2023) ---------------------------------------------------------158
Table 54: Income Statement (2025-2029) ---------------------------------------------------------159
Table 55: Cash Flow (2019-2023) --------------------------------------------------------------------160
Table 56: Cash Flow (2024-2029) --------------------------------------------------------------------161
Table 57: Balance Sheet --------------------------------------------------------------------------------163
Table 58: Current Ratio---------------------------------------------------------------------------------164
Table 59: Acid-Test Ratio-------------------------------------------------------------------------------165
Table 60: Debt Ratio ------------------------------------------------------------------------------------166
Table 61: Debt-Equity Ratio ---------------------------------------------------------------------------167
Table 62: Accounts Receivable Turnover Ratio ---------------------------------------------------168
Table 63: Operating Expense Ratio ------------------------------------------------------------------169
Table 64: Profit Margin ---------------------------------------------------------------------------------169
Table 65: Break-even point (100 ml) ----------------------------------------------------------------170
Table 66: Break-even point (200 ml) ----------------------------------------------------------------170
Table 67: Break-even point (350 ml) ----------------------------------------------------------------171
Table 68: Payback Period (2019-2023) -------------------------------------------------------------172
Table 69: Payback Period (2014-2029) -------------------------------------------------------------172
Table 70: Ratio of Return Investment (2019-2023) ----------------------------------------------173
 TABLE OF CONTENTS

ACKNOWLEDGMENT-----------------------------------------------------------------------------------------i

EXECUTIVE SUMMARY-----------------------------------------------------------------------------------ii-v

INTRODUCTION----------------------------------------------------------------------------------------------vi

Rationale---------------------------------------------------------------------------------------------vi

Product Description------------------------------------------------------------------------------vii

CHAPTER 1: MARKET STUDY -----------------------------------------------------------------------------2

Industry Assessment ---------------------------------------------------------------------------------------2

Prospect ---------------------------------------------------------------------------------------------2

Threats -----------------------------------------------------------------------------------------------3

Opportunities --------------------------------------------------------------------------------------2

General assessment of target market------------------------------------------------------------------4

Target market segmentation -----------------------------------------------------------------------------5

Market segmentation ----------------------------------------------------------------------------5

Market targeting ----------------------------------------------------------------------------------6

Market positioning -----------------------------------------------------------------------------6-8

 Selection of respondents ------------------------------------------------------------------------8

Purpose of the survey questionnaire ---------------------------------------------------------9

Survey results, summary and conclusion --------------------------------------------------10

Demand analysis -------------------------------------------------------------------------------------------10

Demand assumptions ---------------------------------------------------------------------------11

Demand components ---------------------------------------------------------------------------12

Demand computations -------------------------------------------------------------------------12

Qualitative analysis ------------------------------------------------------------------------------15

Quantitative analysis ---------------------------------------------------------------------------16

Supply analysis ---------------------------------------------------------------------------------------------17

Supply assumptions -----------------------------------------------------------------------------18

Supply component ------------------------------------------------------------------------------18

Supply computation -----------------------------------------------------------------------------19

Competitor's profile --------------------------------------------------------------------------------------20

Competitors' market share ------------------------------------------------------------------------------22

Gap analysis-demand vs supply ------------------------------------------------------------------------22

Market share analysis ------------------------------------------------------------------------------------24

Marketing strategy ----------------------------------------------------------------------------------------26

Promotional aspects ----------------------------------------------------------------------------26

Product life cycle ---------------------------------------------------------------------------------27

Advertising strategy -----------------------------------------------------------------------------30

Pricing programs ---------------------------------------------------------------------------------31

Channel of Distribution ------------------------------------------------------------------------32

Comparative Analysis ---------------------------------------------------------------------------33

Evaluation ---------------------------------------------------------------------------------------------------34

CHAPTER 2: TECHNICAL FEASIBILITY -----------------------------------------------------------------35

Major Assumptions ---------------------------------------------------------------------------------------36

Product Description ---------------------------------------------------------------------------------------38

Product features ---------------------------------------------------------------------------------39

Product specifications --------------------------------------------------------------------------40

Product Design ---------------------------------------------------------------------------------------------40

Assembly Drawing -------------------------------------------------------------------------------41

Exploded Drawing -------------------------------------------------------------------------------41

Product Structure Tree -------------------------------------------------------------------------42

Product Structure Matrix ------------------------------------------------------------------43-44

Process Design ---------------------------------------------------------------------------------------------44

Flow Process Chart ------------------------------------------------------------------------------44

Cross Functional Chart -------------------------------------------------------------------------46

Production Schedule --------------------------------------------------------------------------------------47

Daily Work Schedule ----------------------------------------------------------------------------47

Production Capacity Plan --------------------------------------------------------------------------------49

Factors Affecting Plant Size Determination ---------------------------------------------------------51

Machine & Material Requirements and Specification ---------------------------------------52-64

Inventory Management ----------------------------------------------------------------------------------65

Bill of Materials ----------------------------------------------------------------------------------------69-70

Manpower Requirement --------------------------------------------------------------------------------71

Headcount Computation ----------------------------------------------------------------------71

Headcount -----------------------------------------------------------------------------------------74

Business Location ------------------------------------------------------------------------------------------74

Factors Affecting Business Location ------------------------------------------------------------------77

Vicinity Map ------------------------------------------------------------------------------------------------80

Plant Layout (activity relationship chart, different views, analysis) ----------------------81-84

Bill of Materials (Building Structure) ------------------------------------------------------------------86

Floor plan (with flow of production) ------------------------------------------------------------------89

Plumbing & Electrical layout ----------------------------------------------------------------------------90

Utilities -------------------------------------------------------------------------------------------------------92

Electrical Consumption -------------------------------------------------------------------------92

Water Consumption ----------------------------------------------------------------------------93

Telephone Consumption -----------------------------------------------------------------------94

Gantt chart of Pre-Operating Activities --------------------------------------------------------------95

Safety Consideration --------------------------------------------------------------------------------------96

Evaluation ---------------------------------------------------------------------------------------------------99

CHAPTER 3: MANAGEMENT STUDY ----------------------------------------------------------100-101

Major Assumptions --------------------------------------------------------------------------------------101

Title of the Project ---------------------------------------------------------------------------------------102

Company Logo --------------------------------------------------------------------------------------------103

Company Vision, Mission & Core Values -----------------------------------------------------------104

Form of Business Ownership --------------------------------------------------------------------------105

Organizational Structure -------------------------------------------------------------------------------106

Personnel Plantilla ---------------------------------------------------------------------------------------108

Job Description & Specifications ---------------------------------------------------------------109-118

Working Schedule ---------------------------------------------------------------------------------------119

Recruitment Program -----------------------------------------------------------------------------------121

Orientation & Training ----------------------------------------------------------------------------------121

Code of Discipline ----------------------------------------------------------------------------------122-123

Company Code of Discipline---------------------------------------------------------------------125-126

Offenses----------------------------------------------------------------------------------------------------127

General Policies ------------------------------------------------------------------------------------------128

Performance Management & Appraisal ------------------------------------------------------------129

Compensation & Benefits ------------------------------------------------------------------------------130

Contingency Plan ----------------------------------------------------------------------------------------135

Customer Management --------------------------------------------------------------------------------136

Research & Development ------------------------------------------------------------------------------137

CHAPTER 4: FINANCIAL STUDY ----------------------------------------------------------------------138

Introduction -----------------------------------------------------------------------------------------------139

Major assumptions --------------------------------------------------------------------------------------139

Working capital requirement (partner's equity) -------------------------------------------------140

Alternative Sources of Financing ---------------------------------------------------------------------141

Loan Amortization (if group decided to have bank loan) --------------------------------------142

Selling Price & Sales Forecast -------------------------------------------------------------------------143

Accounts Receivable ------------------------------------------------------------------------------------148

Dividend Policy/Profit Sharing ------------------------------------------------------------------------149

Pre-operating Expense ---------------------------------------------------------------------------------149

Operating Expense --------------------------------------------------------------------------------151-153

Fixed Assets -----------------------------------------------------------------------------------------------154

Total Project Cost ----------------------------------------------------------------------------------------155

Financial Statements ------------------------------------------------------------------------------------155

Income Statement -----------------------------------------------------------------------------155

Statement of Cash flows ---------------------------------------------------------------160-161

Statement of Financial Position/ Balance Sheet ----------------------------------------162

Financial Analysis ----------------------------------------------------------------------------------------164

Financial Ratios ---------------------------------------------------------------------------164-169

Break-even Point Analysis -------------------------------------------------------------170-171

Payback Period ---------------------------------------------------------------------------171-172

 Sensitivity Analysis -----------------------------------------------------------------------------174

CHAPTER 5: SOCIO-ECONOMIC ASPECT -----------------------------------------------------------172

Socio-Economic & Environmental Goals -----------------------------------------------------------176

Government -------------------------------------------------------------------------------------177

Environment ------------------------------------------------------------------------------------177

Economic -----------------------------------------------------------------------------------------178

Workers & Customers ------------------------------------------------------------------------178

Suppliers -----------------------------------------------------------------------------------------179

SUMMARY, FINDINGS, & RECOMMENDATIONS ------------------------------------------180-185

BIBLIOGRAPHY -------------------------------------------------------------------------------------186-188

APPENDICES ----------------------------------------------------------------------------------------------189

Appendix A Statistics --------------------------------------------------------------------------190

Appendix B Questionnaire -------------------------------------------------------------------191

Appendix C Projected Demand of Existing Vinegar ------------------------------------203

Appendix D Projected Demand of Musa Acuminata ----------------------------------204

Appendix E Supply Computations ----------------------------------------------------------205

Appendix F Projected Supply ----------------------------------------------------------------206

APPENDIX G. Competitor’s Market Share Computation -----------------------------207

 APPENDIX H. Yearly Production Capacity ------------------------------------------------208

Last Appendix CV ----------------------------------------------------------------------------------209-212

 MARKET STUDY

MARKET STUDY

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 MARKET STUDY

CHAPTER 1

MARKET STUDY

INDUSTRY ASSESSMENT

Analysis of business is a market analysis technique used by businesses and

analysts to consider an industry's competitive dynamics, demand-supply statistics,

degree of competition of the business industry, and many more.

Prospects

The target markets of this study are those people who use vinegar. The

researchers narrow the target market down to households. It is done to consider the

nature of the product offered.

Also, considering that the product offers an alternative to a healthy banana, the

Researchers opted for people who would want something that does not threaten their

health or lifestyle. Since banana is natures’ sweetener, the acidic level in the vinegar is

much lower than the other vinegar offered in the market.

Opportunities

1. Availability of the Main Ingredient

Varieties of bananas are grown in the Philippines. They differ in size, colors, taste, and

shapes. These bananas are well produced and manufactured in the country. With its high

demand in the market, the supply is not a problem in making banana products when, in fact,

2
 MARKET STUDY

bananas itself are available anytime. Compared to other kinds of vinegars made from

sugarcanes, banana vinegar is the only type of vinegar which fruits can be harvested all year

round. This means that making the product would not depend heavily on harvest seasons as

compared to the others.

2. New to the Market

Several banana products are manufactured and produced, such as banana chips, banana

ketchup, banana cue but, the idea of banana vinegar has not yet been introduced in the market.

Also, as the very first banana vinegar product in the market, it has the advantage of getting the

product in front of customers first and being the first to expose the product in the market.

Threats

1. Natural Calamities

Natural disasters include flooding, typhoons and drought are threats to the product; as a

result, the production of the bananas will diminish. For this reason, banana farmers can no

longer keep up with market demand. Thus, the creation of banana vinegar will be affected, and

the business can no longer supply that the market demands.

2. Banana Intolerance

People who are allergic to bananas are considered a threat to the product. It is because

they cannot consume the product, and they are loose of profit or opportunity for the business.

3. A new entry in the market

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 MARKET STUDY

New product entries in the market are considered a threat to the product. It is because

the existing consumers of banana vinegar might shift to the new product. It can lead to a loose

of profit for the company.

GENERAL ASSESSMENT OF TARGET MARKET

A target market analysis is a study you do of your potential customers. Knowing

how to do a market analysis will enable you to figure out exactly who you will market

and sell to. In conducting target market analysis, the proponents focused on the five W’s

and H (who, what, where, when, why, how) of the potential customers.

Who: potential customers, what are their ages, genders, education levels, occupations,

etc.?

What: What are their interests, hobbies, and needs? Based on that, what types of

products, services, and features are your potential customers interested in buying?

When: Find out when your customers are most likely to buy your products or services.

Perhaps they purchase once, seasonally, or on a subscription-based pattern. Or, your

customers might buy only when something breaks or when they have a spontaneous

desire for whatever you sell. You should also learn when your customers are most likely

to view your marketing materials. Are there certain times of day that work best? Or, are

there locations or mediums that are more likely to catch your customer’s attention?

Where: Customers’ location

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 MARKET STUDY

Why: Find out why people buy from you instead of from one of your competitors.

How: You will want to consider how your customers behave.

TARGET MARKET SEGMENTATION

This includes breaking a broad target market into product sub-sets, businesses,

or countries that have, or are perceived to have everyday needs, interests, and priorities

-then designing and implementing strategies to target them.

Market segmentation

Market segmentation is the process brands used to divide their target market

into smaller segments of people that share common characteristics to optimize their

marketing, advertising, and sales efforts.

Our purpose of market segmentation is to be able to introduce a more tailored

message that will be received successfully. It is an advantage for companies who may

have a product or service in the market that boasts multiple benefits or uses for

different types of customers.

There are many different approaches we can take when segmenting our target

market. The proponents used Geographic Segmentation, in which, the target customers

are from Lapu-Lapu City, Mandaue City, and Cebu City household.

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 MARKET STUDY

Market targeting

Market targeting is said to be a process of selecting the target market from the

overall market industry. It consists of a group of customers or consumers in which the

proponents want to satisfy or for whom the products are manufactured, prices are set,

promotions are made, and the distributions are prepared.

Out of 400 sample sizes, 344 of the respondents from Lapu-Lapu City, Mandaue

City, and Cebu City stated that they are willing to avail of the said Musa Acuminata

Vinegar. Therefore, the target market of the proponents are the 88% (from those who

said that they are using vinegar) of the total household from the said three cities.

Market positioning

The figure below shows that there are four classifications of market

positioning, namely, accessible with medium acidity, accessible with high acidity, not

accessible with average acidity and not accessible with high acidity. The proposed Musa

Acuminata Vinegar belongs to accessible with an average acidity.

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 MARKET STUDY

Figure 1. Market Positioning

The proponents want to introduce the Banana Vinegar business to the market, at

which point this product will become known in the market. The study does have

particular competitors in the target market like product vinegar, traditional sauce

vinegar, and wine condiments. The product is made of natural fruit fermentation, and it

is rich in acetic acid, magnesium, potassium, probiotics, and enzymes to help regulates

body pH, lowers the blood sugar and cholesterol level, and also supports heart health.

Banana Vinegar business can distribute into supermarkets/hypermarkets, convenience

stores, and others. Banana Vinegar, being a key ingredient in various ethnic and foreign

cuisines, is anticipated to witness a relatively high share in the food and beverage

positioning.

The following are the ways that the proponents considered to achieve high

standards to sustain in the market.

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 MARKET STUDY

1. Capitalize the brand of the product – It helps keep your business fresh in the

minds of customers while allowing your business to stand out among the

competition.

2. Leverage free or inexpensive marketing and advertising strategies or tools –

Because your business is just beginning its way to making good money, it is

practical that you rethink expensive choices to get individuals to notice your

services or products.

SELECTION OF RESPONDENTS

To get the number of samples needed, the proponents used the Slovens’

formula to be able to calculate the sample size given the population and the margin of

error (5%).

Slovens’ Formula:

𝑁
𝑛 =
(1 + 𝑁𝑒2)

Where: n = sample size e = Margin of error

N = population size

*see Appendix A for the source of household population

A survey was carried out for the proponents to establish a consumer market for

its proposed business. The respondents of the survey questionnaire were randomly

selected households within Cebu City, Lapu-Lapu City, and Mandaue City. A sample size

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 MARKET STUDY

of 400 respondents was obtained using the Slovens’ Formula wherein the total

household population is 457,834. The rest of the information that was gathered would

help the proponents shape up their advertising strategies and promotional aspects. It

also identifies the direct competitors and the improvements there could be.

PURPOSE OF THE SURVEY QUESTIONNAIRE

A survey was carried out for the proponents to establish a consumer market for

its proposed business. The respondents of the survey questionnaire were randomly

selected households within Cebu City, Lapu-Lapu City, and Mandaue City. The following

are the purposes of the survey questionnaire:

 To gather information from the respondents.

 To produce accurate data.

 To let the proponents make decisions confidently.

 To collect opinions from the respondents.

 To do research on personal traits and characteristics.

 To collect daily, monthly or yearly habit.

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 MARKET STUDY

SURVEY RESULTS, SUMMARY AND CONCLUSION

The proponents of Musa Acuminata Vinegar administered the survey to 400

households. The respondents consist of 50% from Cebu City, 26% from Lapu-Lapu City,

and 24% from Mandaue City. Moreover, 389 respondents answered yes from the

question, “Do you use vinegar?” while the other 12 respondents answered no. On the

other hand, 344 respondents out of 389 responded that they are willing to avail the

Musa Acuminata Vinegar. From that standpoint, the proponents generated a total of

2,697,787 litters as the actual demand for Musa Acuminata Vinegar.

Therefore, based on the survey, the proponents can say that Musa Acuminata

Vinegar is feasible to the market. It is because 88% of the respondents who answered

that they are using vinegar said that they are willing and able to avail of the proposed

product.

DEMAND ANALYSIS

Demand analysis is research done to estimate or find out the customer demand

for a product or service in a particular market. Pricing goods for a range of business

decisions such as revenue forecasting, marketing and advertisement spending,

manufacturing decisions, and more, demand analysis is one of the most essential parts

to be considered. The demand analysis for a new company can tell if there is a

substantial demand. Demand analysis is also be defined as a marketing study used to

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 MARKET STUDY

determine what type of customers are willing to buy a particular product and how many

units they are likely to buy and at what price range.

Demand assumptions

 The total number of respondents who are willing to avail the Musa

Acuminata on the given survey is the population of the target market

used to compute the overall demand of this study.

 The initial customer of Musa Acuminata Vinegar are those people ages 18

to 60 years old residing in Lapu-Lapu City, Mandaue City, and Cebu City.

 There is no favoritism among customers as to their preference of vinegar

since the product being introduced by JEMS Manufacturing Inc., even

though it is a breakthrough in the market, has the same function has that

of its competitors.

 The volume of Musa Acuminata consumed is the actual number of liters

consumed by the survey respondents that is 2,697,787 L. This will be the

gauge in determining the real demand.

 The different demand types computed used the following formula:

𝑐𝑜𝑛𝑠𝑢𝑚𝑝𝑡𝑖𝑜𝑛 𝑑𝑢𝑟𝑖𝑛𝑔 𝑠𝑢𝑟𝑣𝑒𝑦 𝑇𝑜𝑡𝑎𝑙 𝐴𝑐𝑡𝑢𝑎𝑙 𝐷𝑒𝑚𝑎𝑛𝑑 𝑓𝑜𝑟 𝑀. 𝐴𝑐𝑢𝑚𝑖𝑛𝑎𝑡𝑎 𝑣𝑖𝑛𝑒𝑔𝑎𝑟
=
𝑁𝑢𝑚𝑏𝑒𝑟 𝑜𝑓 𝑟𝑒𝑠𝑝𝑜𝑛𝑑𝑒𝑛𝑡𝑠 𝑇𝑜𝑡𝑎𝑙 𝐻𝑜𝑢𝑠𝑒ℎ𝑜𝑙𝑑 𝑃𝑜𝑝𝑢𝑙𝑡𝑖𝑜𝑛

11
 MARKET STUDY

Demand Components

 Actual demand for Existing Vinegar

 The actual demand respondents are the respondents who are currently

using the existing vinegar.

 The number of liters used by the actual market is determined by the

survey answers of the respondents when asked how many milliliters of

vinegar they usually consume weekly.

 Actual demand for Musa Acuminata Vinegar consumptions

 The actual demand respondents are the respondents who are willing to

buy the Musa Acuminata Vinegar if it is sold in the market.

 The number of liters bought by the actual market is determined by the

answers of the respondents when asked if how many milliliters they

usually buy weekly.

Demand Computations

The total actual current demand of the existing vinegar was calculated using the

weekly consumption of vinegar gathered during the survey. The number of respondents

from Lapu-Lapu City, Mandaue City, and Cebu City households was also used. Ratio and

proportion were used to get the corresponding amount of the total actual demand of

the existing vinegar.

12
 MARKET STUDY

𝑐𝑜𝑛𝑠𝑢𝑚𝑝𝑡𝑖𝑜𝑛 𝑑𝑢𝑟𝑖𝑛𝑔 𝑠𝑢𝑟𝑣𝑒𝑦 𝑇𝑜𝑡𝑎𝑙 𝐴𝑐𝑡𝑢𝑎𝑙 𝐷𝑒𝑚𝑎𝑛𝑑 𝑓𝑜𝑟 𝑐𝑢𝑟𝑟𝑒𝑛𝑡 𝑣𝑖𝑛𝑒𝑔𝑎𝑟

=
𝑁𝑢𝑚𝑏𝑒𝑟 𝑜𝑓 𝑟𝑒𝑠𝑝𝑜𝑛𝑑𝑒𝑛𝑡𝑠 𝑇𝑜𝑡𝑎𝑙 𝐻𝑜𝑢𝑠𝑒ℎ𝑜𝑙𝑑 𝑃𝑜𝑝𝑢𝑙𝑡𝑖𝑜𝑛

3012 𝐿 𝑇𝑜𝑡𝑎𝑙 𝐴𝑐𝑡𝑢𝑎𝑙 𝐶𝑢𝑟𝑟𝑒𝑛𝑡 𝑑𝑒𝑚𝑎𝑛𝑑 𝑓𝑜𝑟 𝑣𝑖𝑛𝑒𝑔𝑎𝑟

=
400 457,834

𝑇𝑜𝑡𝑎𝑙 𝐴𝑐𝑡𝑢𝑎𝑙 𝐶𝑢𝑟𝑟𝑒𝑛𝑡 𝐷𝑒𝑚𝑎𝑛𝑑 𝑓𝑜𝑟 𝑐𝑢𝑟𝑟𝑒𝑛𝑡 𝑣𝑖𝑛𝑒𝑔𝑎𝑟 = 3,447,491 𝐿

The annual (expected) consumption for the proposed Musa Acuminata Vinegar is

2,697,787 L. The projected population for the next ten years was also calculated by

getting the growth rate of 2019 using 2010 to 2015 growth rate as a basis. After

reaching 2019’s growth rate, the forecasted demand and population for Cebu City, Lapu-

Lapu City, and Mandaue City was calculated.

5250000
4,717,811
4,569,035
4,425,611
4500000 4,287,326
4,025,393 4,153,986
3,666,318 3,781,728 3,901,367
3750000 3,447,491 3,554,950

3000000

2250000

1500000

750000

0
2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029

Figure 2. Bar Graph of Projected Annual Demand of Existing vinegar

*(See Appendix C for the computation)

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 MARKET STUDY

Total actual demand for Musa Acuminata Vinegar was calculated using the

number of milliliters of banana vinegar consumption during the survey, the number of

respondents and the number of households within Cebu City, Lapu-Lapu City, and

Mandaue City. The values for these components are 2357 L, 400 respondents, and 457,

834 households, respectively. The ratio and proportion of the total actual demand for

Musa Acuminata Vinegar was then used to obtain the corresponding amount.

𝑐𝑜𝑛𝑠𝑢𝑚𝑝𝑡𝑖𝑜𝑛 𝑑𝑢𝑟𝑖𝑛𝑔 𝑠𝑢𝑟𝑣𝑒𝑦 𝑇𝑜𝑡𝑎𝑙 𝐴𝑐𝑡𝑢𝑎𝑙 𝐷𝑒𝑚𝑎𝑛𝑑 𝑓𝑜𝑟 𝑣𝑖𝑛𝑒𝑔𝑎𝑟(𝑥)

=
𝑁𝑢𝑚𝑏𝑒𝑟 𝑜𝑓 𝑟𝑒𝑠𝑝𝑜𝑛𝑑𝑒𝑛𝑡𝑠 𝑇𝑜𝑡𝑎𝑙 𝐻𝑜𝑢𝑠𝑒ℎ𝑜𝑙𝑑 𝑃𝑜𝑝𝑢𝑙𝑡𝑖𝑜𝑛

2357 𝐿 𝑇𝑜𝑡𝑎𝑙 𝐴𝑐𝑡𝑢𝑎𝑙 𝐶𝑢𝑟𝑟𝑒𝑛𝑡 𝑑𝑒𝑚𝑎𝑛𝑑 𝑓𝑜𝑟 𝑣𝑖𝑛𝑒𝑔𝑎𝑟(𝑥)

=
400 457,834

𝑇𝑜𝑡𝑎𝑙 𝐴𝑐𝑡𝑢𝑎𝑙 𝐷𝑒𝑚𝑎𝑛𝑑 𝑓𝑜𝑟 𝑀𝑢𝑠𝑎 𝐴𝑐𝑢𝑚𝑖𝑛𝑎𝑡𝑎 𝑣𝑖𝑛𝑒𝑔𝑎𝑟 = 2,697,787 L

The annual (expected) consumption for the proposed Musa Acuminata Vinegar is

2,697,787 L. The projected population for the next ten years was also calculated by

getting the growth rate of 2019 using 2010 to 2015 growth rate as a basis. After

reaching 2019’s growth rate, the forecasted demand and population for Cebu City, Lapu-

Lapu City, and Mandaue City was calculated.

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 MARKET STUDY

4500000

3,691,859
3750000 3,575,436
3,463,201
3,354,989
3,150,016 3,250,645
3,052,962
3000000 2,869,027 2,959,340
2,697,787 2,781,878

2250000

1500000

750000

0
2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029

Figure 3. Bar Graph of Projected Annual Demand of Musa Acuminata

*(See Appendix D for the computation)

Qualitative analysis

The proponents considered why the consumers would avail of the

proposed product, Musa Acuminata. The consumers within Cebu City, Mandaue City,

and Lapu-Lapu City are the subject of the study.

The qualitative demand analysis that the proponents considered, which would

add up to the customer’s interest to the proposed product are the following factors:

 Quality

 Price

 Taste

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 MARKET STUDY

 Acidity

 Health benefits

 Appearance

Quantitative analysis

If we talk about business, profitability and safety should be considered.

The proponents aim to maximize profit in the long run. Determining the target

share of this study would permit this business to operate in the market

continuously.

The figure shows that out of 389 respondents (who are using vinegar),

88.43% of the sample size said that they are willing to avail of the said product,

Musa Acuminata Vinegar, and the remaining 11.57% responded no.

FREQUENCY
11.57%

YES
NO
88.43%

Figure 4. Frequency of willingness to avail the product

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 MARKET STUDY

From the figure above, there is a high potential demand for the Musa Acuminta

Vinegar, which is an opportunity for the business to introduce the product. According to

the survey, there is a greater number of respondents who said yes, which means that if

ever the proposed product will be placed in the market, there will be numerous people

who will be buying this product. In the business industry, some customers are very loyal

to their suppliers or to the product that they are used to avail. The same situation has

the proposed product, 11.57% is not a bad thing because it will be an opportunity for

the team to convince these people to try our product.

SUPPLY ANALYSIS

Supply is the total amount of product available for the customers. Supply can

relate to the amount available at a specific price or the amount available across a range

of prices. In economics, quantity refers to the amount of a product that produces and

firms are willing to sell at a given price when all other factors are being held constant.

Usually, supply is plotted in a supply curve to show the relationship of worth to the

amount of or volume a business can provide.

In this section, the proponents evaluate the supply of the company, given of its

direct competitors’ historical and projected values. The following are the major

competitors that the proponents considered in getting the supply analysis:

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 MARKET STUDY

1. Silver Swan

2. Datu Puti

3. Camel

Supply assumptions

 The survey results were used to identify the competitors of the

proponents. Direct competitors are existing brands of vinegar: Silver

Swan, Datu Puti, Camel, and other brands that are manufactured by

PGMC, Nutri Asia, and Cebu Hong Tin Soy, respectively.

 Verbal data through interviews obtained from the employee of different

supermarkets were used in calculating the supply.

 The statistical number of vinegar was used to determine the projected

supply.

Supply component

Total supply of vinegar: Silver Swan, Datu Puti, Camel, and other brands

that are manufactured by PGMC, Nutri Asia, and Cebu Hong Tin Soy respectively

were based on their market shares that are obtained from the verbal interview.

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 MARKET STUDY

Supply computation

The following data of competitor’s supply are obtained through verbal

interviews of the assigned person from different supermarkets within Cebu City,

Lapu-Lapu City, and Mandaue City for the reason that the researchers’

competitors won’t provide the data of their company because of its

confidentiality.

no. of months Annual Supply

COMPETITORS Monthly Supply (L)
per year (L)
Silver Swan 76,435 12 917222.4
Datu Puti 72,857 12 874281.6
Camel 64,625 12 775497.6
Others 77,338 12 928051.2
Total 291,254 12 3,495,053
Table 1. Supply of Competitors’ Vinegar

*(See Appendix E for the computation)

Total Projected Supply

6,000,000

5,000,000 4,632,070 4,782,899

4,486,667
4,211,295 4,346,475
4,080,928
3,833,901 3,955,191
4,000,000 3,603,994 3,716,899

3,000,000

2,000,000

1,000,000

0
2020 2021 2022 2023 2024 2025 2026 2027 2028 2029

Figure 5. Bar Graph of the Projected Supply from year 2020-2029

*(See Appendix F for the computation)

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 MARKET STUDY

COMPETITOR'S PROFILE

Vinegar manufacturers that top into the Philippine vinegar market or distribution

are considered direct competitors even though there are no producers or distributors of

banana vinegar products in the market. Other existing vinegar products do give the

same function as the proposed vinegar. Musa Acuminata Vinegars has three direct

competitors being considered they are the most commonly used brands of vinegar.

Businesses exist in a competitive environment.

1. Datu Puti

 Datu Puti is a condiment brand owned by Nutri Asia Inc. Datu Puti was

first introduced as a vinegar product in 1975 by Hernan Reyes. Eventually,

soy sauce and fish sauce under the Datu Puti brand were introduced in

the 1990s. An oyster sauce product was also introduced.

Product Type Vinegar

Soy sauce
Fish Sauce
Oyster Sauce
Owner Nutri Asia Inc.
Country Philippines
Introduced 1975: 44 years
Markets Philippines
Website http://nutriasia.com/brand/datu-puti/
Cebu Plant Location P.Basubas St., Tipolo, Mandaue City

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 MARKET STUDY

2. Silver Swan

• Silver Swan is a Nutri Asia-owned condiment brand. Soy sauce is its

core product. Silver Swan was first introduced in 1942 by Sy Bun Swan as a soy

sauce product. Silver Swan subsequently expanded its brands to include vinegar,

fish sauce, chili sauce and oyster sauce.

Product Type Vinegar

Soy sauce
Fish Sauce
Oyster Sauce
Chili sauce
Owner Nutri Asia Inc.
Country Philippines
Introduced 1942: 77 years
Markets Philippines
Previous Owners Silver Swan Manufacturing Co., Inc.
Website http://nutriasia.com/brand/silver-swan/
Cebu Plant Location Sudlon Maguikay, Mandaue City

3. Camel

Product Type Condiments

Spices
Vinegars
Prepared sauces
Owner Cebu Hong Tin Soy Factory Co.
Country Philippines
Markets Philippines
Website
Cebu Plant Location Subangdaku, Mandaue City, 6014

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 MARKET STUDY

COMPETITORS' MARKET SHARE

Competitor's Market share

26.55% 26.24%
Silver Swan
Datu Puti
Camel
Others
22.19% 25.01%

Figure 6. Pie chart of the competitor’s market share

*(See Appendix G for the computation)

GAP ANALYSIS-DEMAND VS SUPPLY

The figure below shows the gap for future demand and supply as forecasted for

the years 2020-2029. The chart indicates an opportunity for the Musa Acuminata to

establish itself as a vinegar manufacturer in the industry, but to do so, it must steal a

particular market share from existing companies. The trend shows that both demand

and supply for the existing vinegar are increasing because the household or population

are also increasing. Though, the amount of the current vinegar is higher than its demand

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 MARKET STUDY

doesn’t mean that there is no place for the new ones. The fact that certain people want

to avail of a new one means that there is an opportunity coming. It’s just a matter of

customer satisfaction.

YEAR DEMAND SUPPLY GAP

2020 3,554,949.91 3,603,994.22 ( 49,044.31)
2021 3,666,318.38 3,716,899.13 (50,580.76)
2022 3,781,728.08 3,833,901.04 (52,172.96)
2023 3,901,367.32 3,955,190.83 (53,823.51)
2024 4,025,393.15 4,080,927.72 (55,534.57)
2025 4,153,986.02 4,211,294.67 (57,308.65)
2026 4,287,326.40 4,346,474.62 (59,148.22)
2027 4,425,610.65 4,486,666.65 (61,056.00)
2028 4,569,034.95 4,632,069.64 (63,034.69)
2029 4,717,811.41 4,782,898.63 (65,087.22)
Table 2. Demand-Supply Gap

6000000

5000000

4000000

3000000

2000000

1000000

0
2020 2021 2022 2023 2024 2025 2026 2027 2028 2029

Projected Actual Demand for Vinegar Total Projected Supply

Figure 7. Bar Graph of the demand-supply gap from year 2020-2029

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 MARKET STUDY

MARKET SHARE ANALYSIS

Market share analysis is a part of market analysis that indicates how well a firm

or business is doing in the marketplace compared to its competitors.

Percentage to Steal

𝑇𝑜𝑡𝑎𝑙 𝐴𝑐𝑡𝑢𝑎𝑙 𝐷𝑒𝑚𝑎𝑛𝑑 𝑓𝑜𝑟 𝑀𝑢𝑠𝑎 𝐴𝑐𝑢𝑚𝑖𝑛𝑎𝑡𝑎 𝑣𝑖𝑛𝑒𝑔𝑎𝑟 2,697,787 L

= = 78%
𝑇𝑜𝑡𝑎𝑙 𝐴𝑐𝑡𝑢𝑎𝑙 𝐶𝑢𝑟𝑟𝑒𝑛𝑡 𝐷𝑒𝑚𝑎𝑛𝑑 𝑓𝑜𝑟 𝑣𝑖𝑛𝑒𝑔𝑎𝑟 3,447,491 𝐿

MARKET SHARE ANALYSIS

% TO STEAL FROM DIRECT COMPETITORS = 78%
% to
Product Brand Market Share New Competitor's share
steal
Silver Swan 25.44% 78.0% 5.60%
Datu Puti 23.67% 78.0% 5.21%
Camel 25.16% 78.0% 5.53%
Others 25.74% 78.0% 5.66%
Musa Acuminata 0.00% 78.00%
Total 100.00%
Table 3. Market Share Analysis

The proponents of the study computed about 78% percentage to steal from the

competitor’s market share. This is the initial amount stolen because of the qualities

shown by this percentage of the market with the survey as a basis. But the proponents

decided to initially take 10% (for year 1) of the computed percentage to steal from the

competitors’ market share, which is now 7.8% because this business is still new to the

market and the consumers’ taste. Also, 78% needs a lot of active promotional aspect in

order to attract customers. For the following years, the company will work on the

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 MARKET STUDY

remaining 70.2%, depending on the performance of the sales. The Figure below shows

the revised market shares with Musa Acuminata Vinegar included in the market.

Market Share with Musa Acuminata

7.80%

23.45% Silver Swan

Datu Puti
23.73%
Camel

21.82% Others
Musa Acuminata
23.19%

Figure 8. Pie Chart of the New Market Share

The figure shows the new market share of Silver Swan, Datu Puti, Camel, and

Other Brands (Sukang Pinakurat, Apple Cider, Bonus, Mama Sita, Bahalina, and Del

Monte). The Proponents decided to steal 7.8% share from each competitor that is why

the shares of every competitor decreases. From this standpoint, Musa Acuminta Vinegar

has an excellent opportunity to get involved in the business industry to sustain

customer’s needs. The calculated market share will be useless if the promotional aspect

of the team is weak because the customer’s attention will not be diverted to them. To

maintain or increase the share, the team should not settle for less because our society is

demanding more, and the world is continuously changing.

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 MARKET STUDY

MARKETING STRATEGY

This is the most expensive stage of JEMS Manufacturing because it is how and

when the company will introduce the product to the public. It is also expected that the

market size of this business will be small, that is why the company should put more

effort in promoting the said Musa Acuminata Vinegar so that as time goes by, the size of

the market will increase so as the demand and the profit of JEMS Manufacturing Inc.

Promotional aspects

Promotion is a form of corporate communication that uses different methods to

achieve the target audience with a particular message to achieve specific organizational

objectives. Promotional strategy is the use of any special offer intended to influence a

person or entity to purchase and make a particular product or company stand out

among its competitors. The goal of any promotional campaign is to raise awareness

about a product or increase its appeal. Promotional marketing has the advantage of

being valuable to both new customers and existing customers; it offers new customers a

reason to try the product for the first time.

Musa Acuminata is new in the market. There are many other vinegar products in

Cebu, Philippines, or worldwide, but Musa Acuminata stands out because of its concept

of introducing an organic way of making vinegar.

The promotional strategy that we are going to use is advertising in which

presentation and promotion of ideas, goods, or services by an identified sponsor.

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 MARKET STUDY

Product life cycle

Product life cycle management is the succession of strategies by business

management as a product goes through its life cycle. The condition in which the product

is solved changes over time and must be managed as it moves through its succession of

stages.

Development

The phase of product development is often referred to as the "valley of death."

Costs accumulate at this stage with no corresponding profit. Since risk is high, there are

limited sources of external funding. Although existing businesses also finance research

and development from revenue generated from current products, this phase is usually

financed from their capital by the entrepreneur in start-up businesses.

 Brainstorming

 Survey

 Benchmarking

Introduction

The introduction stage is about developing a product market and creating

awareness of the product. At this stage, marketing costs are high, as potential

customers need to be reached. This is also the stage of obtaining protection of

intellectual property rights. Product pricing can be high to recover costs associated with

27
 MARKET STUDY

the product life cycle development stage, and this stage is typically financed by investors

or lenders.

 Advertisement

 Free Taste (Optional)

 Displaying of Tarpaulins

 Displaying of streamers

Growth

Customers have accepted the product in the growth stage, and businesses are

striving to increase market share. There is limited competition at this stage for

innovative products so that prices will remain at a higher level. The demand for both

goods and revenue is growing, and advertising is directed at a wide audience. Funding

for this stage is still generally provided by investors or by growing sales revenue.

 More updates and trivia about Musa Acuminata will be posted online.

 Create a new variety of products using a banana.

 Conceptualization for expansion in other provinces, regions, and

countries are laid out.

Maturity

Sales will be leveling off at the mature point. Competition increases, so to

maintain market share, product features may need to be enhanced. At this stage, when

unit sales are at their peak, prices tend to decline in order to remain competitive. As a

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 MARKET STUDY

result of more efficiency in the manufacturing process, production costs also tend to fall

at this point. Companies at this stage do not generally require additional funding.

 Buy one take one

 Include freebies

 Price-off Promotions (streamers/ tarpaulins)

Decline

Due to market saturation, intense competition and increasing customer needs,

the decline phase of the product life cycle is correlated with rising sales. There are

several options for companies at this stage. We can choose to discontinue the product,

sell the right to produce to another company that can better compete or retain the

product by adding new features, finding new applications for the product, or by

exporting to new markets. This is the stage where "new and improved" packaging will

often be revealed.

Successful manufacturing companies usually have multiple products at any given

time at different points in the product life cycle. More information can be found at The

American Marketing Association on how to manage products through each stage of the

product life cycle.

 Make new advertising strategy

 Make new version of the product

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 MARKET STUDY

Product Life Marketing Promotional Material

Week no. Description Quantity Labor Cost
Cycle Objectives Strategy cost
Displaying of Php (2 persons) Php
1 for 1 day 10’ x 10’/ piece 5 pcs
tarpaulins 6,000.00 772.00
Create and promote
Introduction
product awareness Distributing of (4 persons) Php
1 for 2 days 5” x 4”/ piece 1000 pcs Php 500.00
streamers 1544.00

Duration 5
Rate Php
Increase market Advertisement seconds; 5
Growth Rate Php 15.00/ 5 sec 100.00/ 30 Php 15,000.00
share (social media) times/day
sec
(1 month)
Price-off
Increase sales and Promotions Php
Maturity 10’ x 10’ 5 pcs Php 772.00
profits (Tarpaulin/ 6000.00
streamer)

Be more competitive
Modified and
Decline and attract more Research and Development Php 1000.00
improved product
customers

Total Php 31,588.00

Table 4. Product Life Cycle

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Advertising strategy

Activities

 Social media advertisement - to get the attention of the public that JEMS

Manufacturing Company is producing a new version of vinegar, which is Musa

Acuminata Vinegar, also known as Banana Vinegar.

 A newspaper advertisement - will be funded by the company.

Figure 9. Facebook page

Pricing Programs

The group decided to use penetration pricing because if the price is set low as of

the moment, market share will increase continuously. This is done when a new product

is being launched. It is already expected that the price will increase once the promotion

period is over, and market share objectives are achieved.

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 MARKET STUDY

CHANNEL OF DISTRIBUTION

JEMS
Manufacturing

Wholesaler Retailer

Retailer Consumer

Consumer

 Wholesaler

 Colonnade, SM, Metro, Robinson, Gaisano, Savemore

 Retailer

 Mall kiosk, Sari-sari store

 Consumer

 Households

From its definition, the distribution channel is a chain of intermediaries

through which a product or service travel until it reaches the customer or ends

consumers. The circuit of distribution of Musa Acumunata Vinegar is from the producer

itself, which is the JEMS Manufacturing. It will be distributed to the wholesalers such as

malls, and then passes through the retailers like sari-sari store until it reaches the end-

users. Wholesalers alone won’t be able to distribute the goods to the households

32
 MARKET STUDY

because some cannot afford to go to malls or don’t have even a single mall to their

places. While others can’t afford to go to the primary market because it is far, and it

needs to be budgeted. On the other hand, retailers are beneficial in terms of

distribution because there are small stores or kiosks anywhere. The buyers will find it

convenient if the source is a step away from them.

COMPARATIVE ANALYSIS

EXISTING VINEGAR MUSA ACUMINATA

 Made of Sugarcane  Made of Banana

 White in Color  Light Brown in color

 With added materials for fermentation  Naturally fermented

 4-6% acidity  2-4.67% acidity

 pH 3  pH 2

 90 days fermentation  60 days fermentation

33
 MARKET STUDY

EVALUATION

The marketing aspect will help monitor marketing progress towards its annual

goals. Determine what areas of the marketing mix (product, price, place, promotion)

need modification or improvement to increase performance; and assess whether the

company goods, ideas, and services meet customer needs.

The data and information shown in the previous pages proved that the proposed

Musa Acuminata Vinegar is relatively feasible in terms of the willingness of the people

to buy the said product.

The calculated data regarding Musa Acuminata Vinegar’s projected annual

demand will be used to determine the following:

 Capacity Planning

 Headcount or workforce Requirement

 Area of the Facility

 Inventory management

 BOM

34
 TECHNICAL STUDY

TECHNICAL STUDY

35
 TECHNICAL STUDY

CHAPTER 2

TECHNICAL FEASIBILITY

The technical aspect is the discussion of the primary and operation flow of the

project. This discipline responds to the technicalities and basic structure of the proposed

study, including the list of equipment, materials, structure plan, and also the source of

the supplies used. Technicalities refer to the nature of the service, the availability of the

needed equipment, the accessibility of the establishment location, the processes that

must be carried out for the products to get to the customers, the physical layout, and

safety considerations.

This study discusses the processes in the production line and all other activities

of the company. Appended at the operations are the machinery and equipment. As an

output, the processes are expected to yield production schedules and process flow

analyses.

MAJOR ASSUMPTIONS

 JEMS Manufacturing Company will have one facility, the manufacturing

plant.

 The manufacturing plant will sit on a 1,907 sq. Meter lot plus 20%

allowance for future expansion, which will sum up to 2,289 sq. Meters. It

will be occupied by different areas (production area, office area, parking

36
 TECHNICAL STUDY

lot area, etc.). It will situate the equipment and materials of a typical

manufacturing company needed to produce the products of JEMS

Company.

 There will be 288 operating days (considering that there are non-working

holidays and Sundays).

 Of the total working days, 15% or 43 days are dedicated to blocked

maintenance of the plant.

 JEMS Manufacturing Company will operate from 8:00 am – 5:00 pm from

Mondays to Sundays.

 All policies were strictly provided to attain a high level of safety and

productivity.

 After 10 years, JEMS Manufacturing will be using automation because it

is expected that the demand will be continuously increasing.

 Assuming that all bottles from the supplier are already sterilized and

made sure that the bottles are ready for filling.

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 TECHNICAL STUDY

PRODUCT DESCRIPTION

Core Product

Banana is one of those fruits that have been known to contain many properties

that promote health and wellness. Sadly, it is also one of the fruits that most people

take for granted. Being the main ingredient in making the banana vinegar, it has

properties that help the body in many ways than one. Numerous studies have shown

the effectiveness of potassium-rich foods, like bananas, in lowering high blood pressure

and protect against heart attack and stroke. Another property of the banana is that it is

a good source of fiber, specifically, soluble-fiber. This type of fiber decreases the risk of

heart disease.

However, all these health benefits are only a supplement to the central core

product itself. People eat to satisfy their need for food and hunger. As a product under

the food industry, it targets this need of customers to provide satisfaction through the

vinegar.

Actual Product

The proponents of the study aim to provide a new product in the form of Banana

vinegar. Given the process and its ingredients in making vinegar, the actual banana

vinegar will be stored in a glass bottle with a volume of 100ml, 200ml, and 350ml,

respectively. Also, its labels, with its nutrition fact, expiry, and information details about

the company, will be pasted on the bottle.

38
 TECHNICAL STUDY

Product features

Product features are product features that describe your product's appearance,

components, and capabilities. A product feature is a slice of business functionality that

has an appropriate benefit or set of advantages for the end-user of that product. The

following are the features of Musa Acuminata vinegar:

 No sugar added

 Preservative-free

 No artificial flavors or colors

 Made from banana fiber

 Rich in health benefits

 Rich in fiber

 Used as preservative

 Used for flavorings

 Used for cleaning

 Used for losing weight

 Decrease high blood pressure

 Regulate blood pressure

 Reduce cholesterol

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 TECHNICAL STUDY

Product specifications

The product specification provides the set of guidelines a product will be tested

against once development is complete. The following are the specifications for Musa

Acuminata Vinegar:

1. Appearance – a light brown liquid common to consumer’s

expectations.

2. Taste – should have an average sourness

3. Performance - should have the same uses as other ordinary

vinegar.

PRODUCT DESIGN

Product Design is commonly defined as the holistic approach to building a new

product from start to finish. Product design as a verb is to create a new product that can

be sold to its customers by a company. It is a large coefficient and effective generation

and development of ideas through a process that leads to new products. Thus, it is a

significant aspect of new product development.

There are two different designs of Musa Acuminata’s bottle. The first one is a

transparent bottle. It is purposely designed to be transparent so that the customers will

see the spices inside. Spices are; chili pepper, ginger, and garlic. The second bottle is for

the plain vinegar, meaning there will be no spices included.

40
 TECHNICAL STUDY

Figure 10. Assembly Drawing

Figure 11. Exploded Drawing

41
 TECHNICAL STUDY

Product Structure Tree

Figure 12. Product Structure Tree

42
 TECHNICAL STUDY

Product Structure Matrix

PLAIN (100ML plain)

PRICE
LEVEL LEVEL LEVEL BUY /
LEVEL 0 LEVEL 2 PCS. PER PRICE
1 3 4 MAKE
UNIT
BANANA
MAKE 0
VINEGAR
Bottle 1 BUY 8 8
body 1 BUY
logo 1 BUY
paper 1 BUY 0.1 0.1
ink 1 BUY 0.07 0.07
seal 1 BUY 0.29 0.29
cap 1 BUY
Vinegar 1 MAKE
banana 3 BUY 1 3
Php
TOTAL PROJECT COST:
11.46
Table 5. Product Structure Matrix (100ml plain)

PLAIN (200ML)
PRICE
LEVEL LEVEL LEVEL BUY /
LEVEL 0 LEVEL 2 PCS. PER PRICE
1 3 4 MAKE
UNIT
BANANA
MAKE 0
VINEGAR
Bottle 1 BUY 8 9
body 1 BUY
logo 1 BUY
paper 1 BUY 0.1 0.1
ink 1 BUY 0.07 0.07
seal 1 BUY 0.29 0.29
cap 1 BUY
Vinegar 1 MAKE
banana 5 BUY 1 5
Php
TOTAL PROJECT COST:
14.46
Table 6. Product Structure Matrix (200ml plain)

43
 TECHNICAL STUDY

WITH SPICES (350ML)

PRICE
LEVEL LEVEL LEVEL BUY /
LEVEL 0 LEVEL 2 PCS. PER PRICE
1 3 4 MAKE
UNIT
BANANA
MAKE 0
VINEGAR
Bottle 1 BUY 10 10
body 1 BUY
logo 1 BUY
paper 1 BUY 0.1 0.1
ink 1 BUY 0.07 0.07
seal 1 BUY 0.29 0.29
cap 1 BUY
Vinegar 1 MAKE
banana 9 BUY 1 9
Chilli 10 BUY 0.5 5
Garlic 1 BUY 5 5
Ginger 1 BUY 5 5
Php
TOTAL PROJECT COST:
34.46
Table 7. Product Structure Matrix (350ml w/ spices)

PROCESS DESIGN

It is the activity of determining the workflow, equipment needs, and

implementation requirements for a particular process. Process design typically uses

several tools, including flowcharting, process simulation software, and scale models.

Flow Process Chart

The Flow Process Chart is a simple half-text, half-picture method for showing

steps in a process, using symbols to indicate the type of action being taken and text to

44
 TECHNICAL STUDY

provide details of the work being done. The chart can be used selectively to show what

happens to selected individuals, materials, or equipment.

Figure 13. Flow Process Chart

The process of making Musa Acuminata starts with the purchasing of raw

material, which is banana. Second, is to peel the banana and put it in the container.

Third, Ferment the banana for 2 months, let it sit inside the container, and seal it with a

cloth. After a month, strain the banana using the filter. Next, ferment the banana juice

45
 TECHNICAL STUDY

for 1 month again. After another month, strain the banana and then start the filling

process. Lastly, put the banana on its final container, add the spices, seal it using a

plastic seal and put it in a box.

Figure 14. Cross Functional Chart

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 TECHNICAL STUDY

PRODUCTION SCHEDULE

In identifying the number of operating days in one fiscal year, there are factors

to be considered, which is, the legal holidays, special non-working holidays, public

holidays, and weekends. JEMS Manufacturing Company will have six working days per

week in the manufacturing plant. It is assumed that unexpected events such as natural

calamities or transport strikes will not happen. Thus, no allowances are allotted.

1st month 2nd month

TIME PROCESS
TIME PROCESS
8:00 8:20 Preparing
8:00 8:20 Preparing 8:20 4:40 Peeling
8:20 4:40 Peeling 8:20 4:40 Fermenting
8:20 4:40 Straining
8:20 4:40 Fermenting
8:20 4:40 Fermenting
4:40 5:00 Clean-up 4:40 5:00 Clean-up
Table 8. Daily Work Schedule Table 8 . Daily Work Schedule

Daily Production Schedule After 2 months

TIME PROCESS
8:00 8:20 Preparing
8:20 4:40 Peeling
8:20 4:40 Fermenting
8:20 4:40 Straining
8:20 4:40 Fermenting
8:20 4:40 Filling
8:20 4:40 Packaging
4:40 5:00 Clean-up

Table 8. Daily Work Schedule

47
 TECHNICAL STUDY

Table 9. Detailed Flow Process Chart

The table above shows the production time in making one bottle of 350

milliliters of Musa Acuminata Vinegar with spices. Assuming that for the first two

months of production, fermentation was already performed. There will be an expected

eight operations, four transportations (delivering goods from one place to the other),

three inventories which are to store the bananas until it will be fermented. Lastly, there

is an inspection to check the state of the finished goods.

48
 TECHNICAL STUDY

PRODUCTION CAPACITY PLAN

Capacity planning is the process of determining the production capacity needed

by an organization to meet the changing demands for its product.

Actual Annual Demand of existing Vinegar = 3,447,491 L

Market Share of Musa Acuminata Vinegar = 7.8%

(3,447,491 L)(7.8%) = 268905 L

Annual Production Capacity = 268,905 L + 5% allowance = 282,351 L

𝐴𝑐𝑡𝑢𝑎𝑙 𝐴𝑛𝑛𝑢𝑎𝑙 𝐷𝑒𝑚𝑎𝑛𝑑 𝑜𝑓 𝑒𝑥𝑖𝑠𝑡𝑖𝑛𝑔 𝑉𝑖𝑛𝑒𝑔𝑎𝑟 282,350 𝐿

Monthly rate = = = 23,529 𝐿
12 𝑚𝑜𝑛𝑡ℎ𝑠 12 𝑚𝑜𝑛𝑡ℎ𝑠

(𝑀𝑜𝑛𝑡ℎ𝑙𝑦 𝑟𝑎𝑡𝑒) 23,529

Daily Rate = = = 980 L
𝐷𝑎𝑦𝑠/𝑚𝑜𝑛𝑡ℎ 24

The computation shown above is based on 2019. This will serve as an example

for the readers to be guided. The rest of the years are presented below in a tabular

form. The computations for the following (2020-2029) years are the same as the

calculation or formula for the year 2019.

49
 TECHNICAL STUDY

Production Production Output per day Production Output per week Production Output per month Production Output per year
Daily rate (bottles) (bottles) (bottles) (bottles)
Year Capacity per
(ml)
year (L) 100 ml 200 ml 350 ml 100 ml 200 ml 350 ml 100 ml 200 ml 350 ml 100 ml 200 ml 350 ml
2019 282351 980385 7046 1049 188 42273 6296 1131 169094 25184 4523 2029128 302211 54275
2020 291152 1010944 7265 1082 194 43591 6492 1166 174365 25969 4664 2092377 311631 55966
2021 300272 1042611 7493 1116 200 44957 6696 1202 179827 26783 4810 2157918 321392 57719
2022 1548619 5377149 38643 5755 1034 231859 34532 6202 927435 138129 24807 11129219 1657543 297681
2023 1597611 5547260 39866 5937 1066 239194 35625 6398 956775 142498 25592 11481302 1709981 307099
2024 1648400 5723611 41133 6126 1100 246798 36757 6601 987192 147029 26405 11846300 1764343 316862
2025 3402116 11812903 84894 12644 2271 509364 75863 13624 2037455 303451 54497 24449457 3641409 653967
2026 3511322 12192090 87619 13050 2344 525714 78298 14062 2102856 313191 56247 25234271 3758296 674959
2027 3624576 12585333 90445 13471 2419 542670 80823 14515 2170681 323293 58061 26048176 3879516 696729
2028 3742041 12993198 93376 13907 2498 560257 83443 14986 2241029 333770 59942 26892344 4005243 719309
2029 3863889 13416281 96417 14360 2579 578500 86160 15474 2314001 344638 61894 27768010 4135661 742731

Table 10. Annual Production Capacity (bottles)

*see Appendix H for the computation

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 TECHNICAL STUDY

FACTORS AFFECTING PLANT SIZE DETERMINATION

Both economic and non-economic factors that influence the size of a plant

should be considered. The relative importance of the factors varies with the products

manufactured and the industry in which the firm operates. The goals and objectives of

the organization will determine the size of the firm.

The following factors will determine the size of the firm:

1. Resource availability

2. Requirement of Capital

3. Nature of Industry

4. Nature of the product

5. kind of Demand

6. Market size

7. Ability of Entrepreneur

8. Economic Environment

9. Availability of inputs of production

10. Government policy

11. Estimates of future

12. Market Availability

13. Profitability

51
 TECHNICAL STUDY

MACHINE REQUIREMENTS & SPECIFICATIONS (SPECS, SUPPLIERS & QUANTITY)

Specifications of Manufacturing Equipment

Life
Tool/Equipment Specification Description Supplier Qty Price/piece
Span(yr)
A cylinder (2000L) container
used for shipping bulk cargo.
Drums can be made of steel,
dense paperboard (commonly Cebu Home
Container 48 10 Php 16, 700
called a fiber drum), or plastics, Builders
and are generally used for the
transportation and storage of
liquids and powders.

A watertight, vertical cylinder

Cebu Home
Bucket or truncated cone with an open 26 5 Php 200
Builders
top and flat bottom.

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 TECHNICAL STUDY

Is most used to strain liquids

away from other ingredients
Strainer Gaisano Island Mall 2 2 Php 100
but also to occasionally sift fine
ingredients. 2m

A heat sealer is a machine used

to seal products, packaging, Cebu Home
Heater 15 5 Php 500
and other thermoplastic Builders
materials

A shallow platform used for Cebu Home

Tray 20 3 Php 150
carrying of items. Builders

Isuzu NKR 4HF1

United Actioners
Delivery Truck Delivering goods or services to 15 3 ₱ 500,000
Inc.
customers

Table 11. Specifications of Manufacturing Equipment

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 TECHNICAL STUDY

Raw Materials Supplier and Price

Material Specification Description Supplier Price

Cavendish bananas are the fruits of  Cavendish Bananas  Php 6.00

one of a number of banana Suppliers in the
cultivars belonging to the Philippines
Cavendish subgroup of the AAA  Philippine Green  Php 6.25
banana cultivar group. The same Farm
Banana term is also used to describe the  2G3B Sunrise  Php 7.00
plants on which the bananas grow. Agricultural Venture
They include commercially Inc.
important cultivars like 'Dwarf  ST. JB Enterprise
Cavendish' and 'Grand Nain'.  Php 6.00

A glass bottle is a bottle created  Cebu Glass Bottle  100 ml – Php 8

from glass. Glass bottles can vary in  200 ml – Php 9
size considerably, but are most  350 ml – Php 10
commonly found in sizes ranging
Bottle
between about 200 milliliters and
1.5 liters. Common uses for glass
bottles include food condiments,
soda, liquor, cosmetics, pickling
and preservatives.

54
 TECHNICAL STUDY

The term "product label" is a  Paper  Php 700/box (5

general term used to refer to o Cebu Paper ream)
printed information affixed to a Sales Inc
product (typically retail products)  Inc  Php 100/bottle
Label
communicated from the o Ink Pro Filling
manufacturer to consumers or Center
other users.

Shrinkwrap, also shrink film, is a

material made up of polymer
plastic film. When heat is applied,
it shrinks tightly over whatever it is
covering. Heat can be applied with
a handheld heat gun (electric or
gas), or the product and film can
pass through a heat tunnel on a
Seal  Cebu printing and
conveyor.  Php 0.29/pc
Packaging Corp.

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 TECHNICAL STUDY

A carton is a box or container  Republic Corrugated 100 Php

usually made of paperboard and Cartons, Inc. ml 17/
sometimes of corrugated  Star Box Cebu box
fiberboard. Many types of cartons Packaging
are used in packaging. Sometimes Corporation. 200 Php
Box a carton is also called a box. ml 20/
box

350 Php
ml 45/
box

Table 12. Raw Materials

56
 TECHNICAL STUDY

Specifications of Furniture and Fixtures

Life Span
Tool/Equipment Specification Description Supplier Qty Price/piece
(years)

Height: 18-30 inches Home & Office

Office Table 7 10 Php 2, 800
(46-76 cm) range Furniture Cebu

Core 13-4160
(3.16GHZ) 4GB
Lenovo H305 DDR3 Memory
Waled DVDRW 1TB Hard Drive
JOYO marketing 5 10 Php 15, 600
WIFI USB Windows 10
KB & Mouse Integrated Graphics 19.5”
L12032

18cm x 28cm It has live back,

Ergonomically
has adjustable arm, flexible set Home & Office
designed swivel 7 10 Php 2,500
edge, roller wheel and has furniture Cebu
chairs
upper back force.

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 TECHNICAL STUDY

4-drawer lateral filling cabinet,

Home & Office
Office Drawers size 91 x 46 x 100m, weight 7 10 Php 4,000
furniture Cebu
17kh and color peach

Canon printer Inkjet paper 600

Printer with x dpi automatic and refill color
Scanner Epson JOYO marketing 2 5 Php 2,950
L220 It is used for printing
documents, files and etc.

WIFI router has a 1GHZ dual-

core processor and extreme PLDT
Wireless Router 1 10 Php 1,400
speed generators NETGEAR Pusok
genie

Storage Cabinets
It is used for storing the files,
MDF laminated
documents and important
wood type size Home & Office
documents of the company 6 15 Php 12,000
118cm x 41cm x furniture Cebu
and the standards that they are
30cm. weight
following with.
13.82 kg

Cebu Home
Air condition Koppel 2 HP window type 10 10 Php 9,000
Builders

58
 TECHNICAL STUDY

Telephone Is a network or system that PLDT

Landline transmits electrical signal so Pusok, Lapu-Lapu 7 10 Php 700
Network: PLDT you can call to anyone. City

Table 13. Specifications of Office Equipment

Safety and Security Equipment

Tool/Equipment Specification Description Supplier Qty Life Span Price/piece

Portable led emergency light
with 24+40SMD, and low
Omni LED
power consumption and
emergency light
portable led emergency light
Battery capacity:
with two-level switch and
1300 MAH Cebu Home
portable led emergency light 10 8 Php 1, 200
Battery type: Builders
portable and suitable for
lead-acid
homes and camping, portable
rechargeable
emergency light with handle;
LED: 24+40SMD
portable led emergency light
with charging wire.

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 TECHNICAL STUDY

Camera: 4pcs HS-5606 dome

camera
Temwee
CCTV Camera Technology: Infrared 5 sets 5 Php 15, 520
Shenzhen, China
Power Supply: 1pc*12v 5A with
1-5 splitter

Portable dry powder fire

extinguisher
Type: portable fire extinguisher
Cebu Home
Fire Extinguisher Size: 5kg 10 10 Php 830
Builders
Effective range: 8m
Material: Carbon steel
Certification: SSG, CE, En3

Strength Pressure: 4.8 MPA

Nominal working pressure: 1.2
Cebu Home
Fire Alarm MPa 4 10 Php 536
Builders
Flange diameter: 220,220,285
Seal test pressure: 2.4 MPa

Finger Print Bundy

clock
Record capacity: High hardness optical
60000 pcs fingerprint collection device
Cebu Home
Power: DC 5V/1A fingerprints, password, and any 2 6 Php 7, 400
Builders
Display: 2-8 inch combination.
TFT High-definition Pronunciation
Finger Print
capacity: 1025
Table 14. Safety and Security Equipment

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 TECHNICAL STUDY

Specifications of Personal Protective and Auxiliary Equipment

Tool/Equipment Specification Description Supplier Qty Life Span Price/piece

Pallets are used to protect raw

Four-way materials and finished goods
Center Lumber
wooden pallet and to separate the crates from 12 5 Php 275
Corp.
42x42in the ground of which damage
may come from.

A small, often elasticized, fine

net is worn over long hair to
hold it in place. It is worn to Unitop General
Black hairnet keep hair contained. A snood is Merchandise Inc. 44 1 Php 15
similar but a looser fit and with Lapu-Lapu City
a much coarser mesh and
noticeably thicker yarn.

The platform trolley is used to

Platform Trolley Cebu Home
transport materials in the 8 5 Php 650
Maximum: 300 lb Builders
production area.

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 TECHNICAL STUDY

Usually serve as a form of

protection for human hands
from cold, heat, damage that
Nutex Nitrile could be caused by things such Unitop general
Gloves Medium as friction, chemicals or disease merchandise inc. 44 1 Php 25
size and also create a barrier Lapu-lapu City
between hands and things they
should not come into contact
with.

The apron is made of plastic Unitop general

Plastic Apron instead of cloth and it is merchandise inc. 44 3 Php 200
waterproof. Lapu-lapu City

Unitop general
White Slip-on
merchandise inc. 44 4 Php 79
rubber Shoes
Lapu-lapu City

Is a device that you wear over

your face, for example to
prevent yourself from Unitop general
Face mask breathing bad air or from merchandise inc. 10 pack 0.5 Php 30
spreading germs, or to protect Lapu-lapu City
your face when you are in a
dangerous situation.

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 TECHNICAL STUDY

Cold HL-8200 Hand Dryer heat Cebu Home

Hand Dryer 4 10 Php 2, 680
Temperature: 40-540C Builders

Clean up
complete set
mop

Bundle of coarse It is used to soak up the liquid,

Unitop general
strings or yarn, for cleaning floors and other
merchandise inc. 2 1 Php 800
etc., or a piece of surfaces, to mop up dust, or for
Lapu-lapu City
cloth, sponge, or other cleaning purposes.
other absorbent
material,
attached to a
pole or stick.

A cleaning utensil. The dustpan

Unitop General
Broom with is commonly used in
Merchandise Inc. 2 1 Php 50
Dustpan combination with a broom or
Lapu-Lapu City
long brush

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 TECHNICAL STUDY

A round vessel that is open at

the top; used chiefly for
holding food or liquids;
Cebu Home
Toilet bowl commode, crapper, potty, pot, 6 20 Php 3,000
Builders
throne, toilet, stool, can - a
plumbing fixture for defecation
and urination.

Wall mount ceramic. Size Cebu Home

Male Urinal 6 20 Php 2,508
390*280*570 Builders

Table 15. Specifications of Personal Protective and Auxiliary Equipment

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 TECHNICAL STUDY

INVENTORY MANAGEMENT

Inventory management is a step of a supply chain where inventory and stock

quantities are tracked in and out of your warehouse, and it is the process of ensuring

that a company always has the products it needs on hand and that it keeps the cost as

low as possible. Inventory is defined as a stock or merchandise store. These goods are

kept on hand at or near the location of a business to enable the company to meet

demand and fulfill its reason for existing. If the company is a retail establishment, if the

company does not have the required item in stock when the customer arrives, a

customer may look elsewhere to satisfy his or her needs. If the company is a

manufacturer, some inventory of raw materials and work-in-process must be

maintained to keep the factory running. Also, it must maintain some supply of finished

goods to meet demand.

Economic Order Quantity (EOQ) minimizes total inventory cost.

EOQ = √2𝐷𝑆 / √𝐻

D= annual demand for the product

S= setup cost to place one order

H= holding cost to keep one item in inventory for a year

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 TECHNICAL STUDY

Banana

D = 1176462.5Kg

S = Php 100.00

H = Php 2.00

2 (1176462.5)(100)
EOQ = √ = 10846.49kg
2

1176462.5
# of orders/ yr = 24,252.18 = 109 orders/year

Annual Set-up Cost = (orders/yr)(SC) = (109)(100)

= Php 10,900.00

Annual Holding Cost = HC (𝑄) = 2 (10846.49)

= Php 21,692.97

Annual Inventory Cost = Php 24,200.00 + Php 24,252.18 = Php 32,592.97

The computation shown above is based on 2019. This will serve as an example

for the readers to be guided. The rest of the years are presented below in a tabular

form. The computations for the following (2020-2029) years are the same as the

calculation or formula for the year 2019.

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 TECHNICAL STUDY

Banana
Annual holding Annual Inventory
Year Kg EOQ # of orders Annual set up cost
cost Cost
2019 1,176,463 10846.49 109 21,692.97 10,900 ₱32,592.97
2020 1,213,133 11014.23 111 22,028.47 11,100 ₱33,128.47
2021 1,251,133 11185.41 112 22,370.81 11,200 ₱33,570.81
2022 6,452,579 25401.93 255 50,803.85 25,500 ₱76,303.85
2023 6,656,713 25800.61 259 51,601.21 25,900 ₱77,501.21
2024 6,868,333 26207.51 263 52,415.01 26,300 ₱78,715.01
2025 14,175,483 37650.34 377 75,300.69 37,700 ₱113,000.69
2026 14,630,508 38249.85 383 76,499.69 38,300 ₱114,799.69
2027 15,102,400 38861.81 389 77,723.61 38,900 ₱116,623.61
2028 15,591,838 39486.50 395 78,973.00 39,500 ₱118,473.00
2029 16,099,538 40124.23 402 80,248.46 40,200 ₱120,448.46
Table 16. EOQ of banana

Bottle
Year EOQ # of orders Annual holding cost Annual set up cost Annual Inventory Cost
2019 18917 126 18,917.00 9,458 ₱28,375.21
2020 19210 128 19,210.00 9,604 ₱28,814.27
2021 19508 130 19,508.00 9,754 ₱29,261.80
2022 44302 295 44,302.00 22,151 ₱66,452.99
2023 44998 300 44,998.00 22,498 ₱67,496.30
2024 45707 305 45,707.00 22,853 ₱68,560.45
2025 65664 438 65,664.00 32,832 ₱98,495.73
2026 66710 445 66,710.00 33,354 ₱100,064.29
2027 67777 452 67,777.00 33,888 ₱101,665.07
2028 68867 459 68,867.00 34,433 ₱103,299.56
2029 69979 467 69,979.00 34,989 ₱104,967.78
Table 17. EOQ of bottle

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Label
Year EOQ # of orders Annual holding cost Annual set up cost Annual Inventory Cost
2019 18917 126 18,917.00 9,458 ₱28,375.21
2020 19210 128 19,210.00 9,604 ₱28,814.27
2021 19508 130 19,508.00 9,754 ₱29,261.80
2022 44302 295 44,302.00 22,151 ₱66,452.99
2023 44998 300 44,998.00 22,498 ₱67,496.30
2024 45707 305 45,707.00 22,853 ₱68,560.45
2025 65664 438 65,664.00 32,832 ₱98,495.73
2026 66710 445 66,710.00 33,354 ₱100,064.29
2027 67777 452 67,777.00 33,888 ₱101,665.07
2028 68867 459 68,867.00 34,433 ₱103,299.56
2029 69979 467 69,979.00 34,989 ₱104,967.78

Seal
Annual Inventory
Year EOQ # of orders Annual holding cost Annual set up cost
Cost
2019 18917 126 18,917.00 9,458 ₱28,375.21
2020 19210 128 19,210.00 9,604 ₱28,814.27
2021 19508 130 19,508.00 9,754 ₱29,261.80
2022 44302 295 44,302.00 22,151 ₱66,452.99
2023 44998 300 44,998.00 22,498 ₱67,496.30
2024 45707 305 45,707.00 22,853 ₱68,560.45
2025 65664 438 65,664.00 32,832 ₱98,495.73
2026 66710 445 66,710.00 33,354 ₱100,064.29
2027 67777 452 67,777.00 33,888 ₱101,665.07
2028 68867 459 68,867.00 34,433 ₱103,299.56
2029 69979 467 69,979.00 34,989 ₱104,967.78
Table 19. EOQ of seal

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BILL OF MATERIALS

Unit
Item Qty Total Cost
Cost
Container 48 16,700 801,600
Strainer 2 100 200
Heater 15 500 7,500
Bucket 26 200 5,200
Tray 20 150 3,000
Delivery
3 500,000 1,500,000
Truck
TOTAL ₱ 2,317,500
Table 20. Manufacturing Equipment

Unit
Item Qty Total Cost
Cost
Office Table 7 2800 19,600
Computer
5 15600 78000
Set
Chair 7 2500 17,500
Office
7 4000 28,000
Drawer
Printer 2 2950 5900
Router 1 1400 1400
Storage
6 12000 72000
cabinet
Air condition 10 9000 90000
Telephone 7 700 4,900
TOTAL ₱317,300
Table 21. Furniture and Fixtures

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Unit
Item Qty Total Cost
Cost
Emergency light 10 1200 12000
CCTV Camera 5 15520 77,600
Fire Extinguisher 4 830 3,320
Fire Alarm 4 536 2,144
Finger Print bundy
2 7400 14800
clock
TOTAL ₱109,864
Table 22. Safety and Security Equipment

Unit
Item Qty Total Cost
Cost
Four way wooden
12 275 3300
pallet
Black hairnet 44 15 660
Platform Trolley 8 650 5200
Nutex Nitrile Gloves
44 25 1100
Medium
Plastic Apron 44 200 8800
White Slip-on
44 79 3476
rubber Shoes
Face mask 10 30 300
Hand Dryer 4 2680 10720
Clean up complete
2 800 1600
set mop
Broom with Dust
2 50 100
pan
Toilet bowl 6 3000 18000
Male Urinal 6 2,508 15048
TOTAL ₱68,304
Table 23. Personal Protective and Auxiliary Equipment

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MANPOWER REQUIREMENT

Headcount Computation

sec/pc hrs/pc hrs/k pcs/shift pcs/hour

Peeling 6.12 0.0017 1.70 4706 588
Fermenting (2)
Straining (2)
100 ml 6.10 0.0017 1.70 4720 590
Filling 200 ml 10.34 0.0029 2.87 2785 348
350 ml 13.55 0.0038 3.76 2125 266
Packaging 10.32 0.0029 2.87 2791 349

𝐻𝑟𝑠 sec/pc
=
𝑝𝑐 3600 𝑠𝑒𝑐

𝐻𝑟𝑠 hrs/pc
=
𝑘 3600 𝑠𝑒𝑐

Note: k = 1000pcs

𝑃𝑐𝑠 8hrs
𝑠ℎ𝑖𝑓𝑡 = ℎ𝑟𝑠
( 𝑘 ∗ 1000𝑝𝑐𝑠)

Note: 1 shift = 8 hrs

𝑃𝑐𝑠 pcs/shift
=
ℎ𝑜𝑢𝑟 8 ℎ𝑜𝑢𝑟𝑠

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Peeling Head Count

 Daily Rate = 4,668,000 ml + 5% allowance = 4,901,400 ml

 1 banana = 40 ml
Daily Rate 980385ml
 No. of bananas to peel per day = = = 24,510𝑝𝑐𝑠
40 𝑚𝑙 40

 Allocated time to peel per banana = 6.12 sec

 Worker’s Pcs/shift = 4,706 pcs

24,510 pcs
𝑁𝑢𝑚𝑏𝑒𝑟 𝑜𝑓 𝑤𝑜𝑟𝑘𝑒𝑟𝑠 = = 5 heads
4,706 pcs

Filling Head Count

Product
Respondents Percentage ml pcs
Volume
100 ml 235 71.87% 704558 7046
200 ml 70 21.41% 209868 1049
350 ml 22 6.73% 65959 188
total 327 100.00% 980385 8283

 For 100 ml

 Number of bottles to be produced per day = 7046 bottles

 Worker’s Pcs/shift = 4720 pcs

7046
𝑁𝑢𝑚𝑏𝑒𝑟 𝑜𝑓 𝑤𝑜𝑟𝑘𝑒𝑟𝑠 = = 2 ℎ𝑒𝑎𝑑𝑠
4,720

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 For 200 ml

 Number of bottles to be produced per day = 5,246 bottles

 Worker’s Pcs/shift = 2,785 pcs

1049
𝑁𝑢𝑚𝑏𝑒𝑟 𝑜𝑓 𝑤𝑜𝑟𝑘𝑒𝑟𝑠 = = 1 ℎ𝑒𝑎𝑑𝑠
2,785

 For 350 ml

 Number of bottles to be produced per day = 942 bottles

 Pcs/shift = 2,125

188
𝑁𝑢𝑚𝑏𝑒𝑟 𝑜𝑓 𝑤𝑜𝑟𝑘𝑒𝑟𝑠 = = 1 ℎ𝑒𝑎𝑑
2,125

Packaging

 Number of bottles to pack = 87, 525 bottles

 Pcs/shift = 2,719

8283
𝑁𝑢𝑚𝑏𝑒𝑟 𝑜𝑓 𝑤𝑜𝑟𝑘𝑒𝑟𝑠 = = 3 ℎ𝑒𝑎𝑑𝑠
2,719

The computation shown above is based on 2019. This will serve as an example

for the readers to be guided. The rest of the years are presented below in a tabular

form. The computations for the following (2020-2029) years are the same as the

calculation or formula for the year 2019.

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Headcount

Filling Filling Filling Total

YEAR Peeling Fermenting Straining Packaging
100 ml 200 ml 350 ml Heads
2019 6 4 4 2 1 1 3 21
2020 6 4 4 2 1 1 4 22
2021 6 4 4 2 1 1 4 22
2022 29 6 6 8 2 1 17 69
2023 29 6 6 8 2 1 17 71
2024 30 6 6 9 2 1 18 72
2025 63 6 6 18 5 2 36 135
2026 65 8 8 19 5 2 37 143
2027 67 8 8 19 5 2 39 148
2028 69 8 8 20 5 2 40 152
2029 71 8 8 20 5 2 41 156
Table 24. Production Head Count Summary

BUSINESS LOCATION

Choosing a business location is perhaps the most crucial decision a business

owner needs to know. It requires accurate planning and research period. It involves

looking at demographics, accessing the supply chain, scoping the competition, staying

on budget, among others. How important the location is for the company depends on

the type of business, the facilities, and other resources a company needs, as well as the

behavior of the customers. Ultimately, the choice should reflect on maximizing profits

and reducing costs.

The manufacturing plant of Musa Acuminata Vinegar will be located at Buaya,

Lapu-Lapu City, Cebu. The group chose this location because of the following reasons:

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 Near the market

 Lapu-Lapu has a pier where boats can dock.

 Location can’t cause disturbance to other people.

 It is near to the main road.

LOCATION

FACTORS TO BE WEIGHT URGELLO, CEBU BUAYA, LAPU- MAGUIKAY,

CONSIDERED (%) CITY LAPU CITY MANDAUE CITY

RATING RATING RATING

Proximity to 7.6
40 16 6.4 18 7.2 19
the Resources
Conduciveness 4.25
25 11 2.75 20 5 17
of space
Presence of
commercial 20 20 4 15 3 14 2.8
activities
Lot area 15 12 1.8 20 3 20 3

TOTAL 100 59 14.95 73 18.2 70 17.65

Table 25. Decision Matrix for Manufacturing Plant Location

Rating Evaluation:

17-20 -- Excellent

13-16 -- Very Satisfactory

9-12 -- Satisfactory

5-8 -- Average

1-4 – Poor

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Barangay Buaya, Lapu-Lapu, is the option that has the highest score based on the

criteria considered. We can also infer that the individual ratings are close to each other,

meaning the feasibility that these options are competitive in providing conducive space

for business establishment, an indication that there is a better capturing of the target

market.

The proponents decided not to rent a lot in which the building will be made, and

rather, they will buy the land for a cost of Php 48,960,000.00. Below is the screenshot of

the Lot For Sale:

Figure 15. Lot for Sale

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Figure 15. Lot for Sale

FACTORS AFFECTING BUSINESS LOCATION

There are a lot of factors to be considered in choosing the location of a business.

Before deciding where to build your facility, you should follow the following procedures:

1. Determine what will be produced.

2. Determine how many will be made per unit of time (demand).

3. Determine what parts will be made or purchased.

4. Determine how each part will be fabricated.

5. Determine the sequence of assembly.

6. Set time standards for each operation.

7. Determine the plant rate.

8. Determine the number of machines needed.

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9. Balance assembly line or work cells.

10. Study the material flow patterns to establish the best flow possible.

11. Determine activity relationships.

12. Layout each workstation.

13. Identify personnel requirements.

14. Identify office needs and layout as needed.

15. Develop total space requirements from the above information.

16. Select material handling the equipment.

17. Allocate the area according to the space needed and the activity relationship.

18. Develop a plant plan.

19. Construct a master plan.

20. Seek input and adjust.

21. Seed approvals, take advice, and change as needed.

22. Install layout.

23. Start production.

24. Adjust as needed and finalize project reports and budget performance.

The factors that affect the business location are as follows:

A. Proximity to the Resources – the outputs are made up of raw materials, which is,

if the conflict arises, it will hinder or impede the movement or progress of the

production and distribution.

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B. Conduciveness of space – the space is advantageous to both customers and the

company in terms of environmental and educational factors and skill set. The

presence of similar establishments also fortifies the desirability of a particular

location for the business.

C. Presence of commercial activities – the location must be considered for

historical, present, and future developments in the area, which are a good

indicator that the business can be dynamic.

D. Lot area – this factor prescribes the availability of adequate logistical needs,

especially in the supply chain operations. The lot area also depends on the

procedures stated above.

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VICINITY MAP

Figure 16. Buaya, Lapu-lapu City Vicinity Map

Figure 17. Manufacturing Plant Location

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PLANT LAYOUT (ACTIVITY RELATIONSHIP CHART, DIFFERENT VIEWS, ANALYSIS)

Graphic Illustration of Plant Layout

Figure 19. Floor Plan Layout

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Figure 20. Top View

Figure 21. Front View

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Figure 22. Left View

Figure 23. Back view

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Figure 23. Isometric View

Figure 24. Activity Relationship Chart

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LEGEND REASON
A Absolutely Important
E Extremely Important
I Important
O Optional
U Unimportant
X Undesired

Table 26. Legend of Activity Relationship Chart

Analysis

An optimal facility layout aims to create a safe and straightforward flow of

people, work-in-process, and information. For short, it means to be a practical

arrangement of man, material, and machine.

The layout and design of an establishment is a vital component in performing the

overall operations of a business; in terms of maximizing the effectiveness of the

production process and meeting the needs or requirements of the employees.

The following factors were considered by the proponents in determining the

layout and design of JEMS Manufacturing Company’s Facility:

1. Dynamic to change

- Designed to be flexible

2. Flow of movement

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- The proximity of one process to the other

3. Material Handling

- The movement, protection, storage, and control of materials and

products throughout the manufacturing, warehousing, distribution,

consumption, and disposal.

4. Output needs

- What quantity of goods is required?

5. Space utilization

- A Measure of whether and how space is being used.

BILL OF MATERIALS (BUILDING STRUCTURE)

The construction structure consists of the plant’s pillars, beams, and tie-beams.

This part of the study will introduce the plant layout or establishment of the JEMS

Manufacturing, and this will be sketched according to the result of an activity

relationship. The costs of materials are based on the actual costs of materials in building

a facility. The figure below shows the planned structure of JEMS Manufacturing,

followed by its corresponding material costs.

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Figure 27. Building Structure

Figure 27. Building Structure

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Item
No. Description Amount
1 Concreting Works 1,464,354.40
2 Formworks 613,822.22
3 Scaffolding 1,588,727.00
4 Masonry 1,089,844.00
5 Reinforcements 1,511,629.74
6 Roofing and Truss 192,630.50
7 Architectural 333,742.50
8 Painting 235,600.00
9 Plumbing 390,474.75
10 Ceiling 276,130.00
11 Tiles 317,119.50
12 Railings 221,000.00
13 Soil Poisoning 52,375.00
DIRECT COST 8,287,449.61

CONTRACTORS PROFIT 828,744.96

SUPERVISION, CONTIGENCY & MISCELLANEOUS 298,348.19

CONTRACTOR'S RISK INSURANCE 165,748.99

TOTAL AMOUNT 9,580,291.75

VAT 12% 1,149,635.01

GRAND TOTAL 10,729,926.76

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FLOOR PLAN (WITH FLOW OF PRODUCTION)

Figure 28. Floor Plan (with flow of production)

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PLUMBING & ELECTRICAL LAYOUT

A building layout optimized for plumbing and electrical flow will not only lower

the cost of the facility, but the design will also be cheaper (also considering the

durability, flexibility, aesthetics, etc.). A carefully designed construction layout will

directly affect the complexity of its plumbing system and electrical system, which in turn

will directly have an impact on the savings of the facility.

Plumbing refers to a system that allows fluid movement, typically involves pipes,

valves, plumbing devices, tanks, and other devices/equipment/materials/ tools. On the

other hand, and electrical system includes power supply and distribution, information

and telecommunications system, control system, security and access system, detection

and alarm system, and lastly, lighting (inside and outside the facility).

The figure below shows the electrical and plumbing layout designed by the

proponents to save facility costs.

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Figure 29. Plumbing and Electrical layout

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UTILITIES

It is good to understand the utility of goods because it will directly affect the

demand, and therefore the price of the product will also be affected. Services include

electrical consumption, water consumption, and telephone or communication

consumption. The calculations of the following expenditures will be shown below.

Electrical Consumption

The table below shows the expected usage of the electricity of JEMS

Manufacturing Corporation’s plant and its corresponding cost.

Usage/
Item Quantity Price/KwH Cost/day Cost/year
day
Flourescent
Lamp 37 34.2 11.05 377.9 108838.1
Aircondition 12 432 11.05 4773.6 1374796.8
Computer 7 100.8 11.05 1113.8 320785.9
Printer 2 20.7 11.05 228.7 65875.7
Heater
(packaging) 15 67.5 11.05 745.9 214812.0
Telephone 7 6.3 11.05 69.6 20049.1
Emergency
Lamp 35 16.8 11.05 185.6 53464.3
Hand Dryer 4 1.08 11.05 11.9 3437.0
Finger Print
Clock 7 3.15 11.05 34.8 10024.6
CCTV 10 9.6 11.05 106.1 38719.2
Total Cost ₱7648.0 ₱2,210,802.67

Table 26. 2019 Electrical Consumption

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Projected Electrical Consumption

Year Inflation rate Total Cost
2019 0.0384 ₱2,210,802.67
2020 0.0327 ₱2,283,095.92
2021 0.306 ₱2,981,723.27
2022 0.03 ₱3,071,174.97
2023 0.03 ₱3,163,310.22
2024 0.03 ₱3,258,209.52
2025 0.03 ₱3,355,955.81
2026 0.03 ₱3,456,634.48
2027 0.03 ₱3,560,333.52
2028 0.03 ₱3,667,143.52
2029 0.03 ₱3,777,157.83
Table 27. Projected Electrical Consumption

Water Consumption

Water Consumption including Office Staffs

Activities Headcount Frequency Usage price/ Cost / Cost / Cost / yr
(cu. cu. day month
Meter) Meter
Hand Washing 67 3 0.003 32 6.43 154.37 1,852.42
Toilet flushing 67 5 0.0075 32 16.08 385.92 4,631.04
Urinal Flushing 67 5 0.005 32 10.72 257.28 3,087.36
For washing 2 4 32 128.00 3,072.00 36,864.00
Materials/ tools/
equipment
Total Cost 161.23 3,869.57 46,434.82

Table 28. 2019 Water Consumption

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Projected Water Consumption

Year Inflation rate (%) Total Cost
2019 0.0384 ₱46,434.82
2020 0.0327 ₱47,953.24
2021 0.306 ₱62,626.93
2022 0.03 ₱64,505.74
2023 0.03 ₱66,440.91
2024 0.03 ₱68,434.14
2025 0.03 ₱70,487.16
2026 0.03 ₱72,601.78
2027 0.03 ₱74,779.83
2028 0.03 ₱77,023.22
2029 0.03 ₱79,333.92
Table 29. Projected Water Consumption

Headcount Monthly fee Annual cost

7 ₱700.00 ₱58,800.00
Table 30. Telephone Consumption

Projected Communication Consumption

Year Inflation rate Total Cost
2019 0.0384 ₱58,800.00
2020 0.0327 ₱60,722.76
2021 0.306 ₱79,303.92
2022 0.03 ₱81,683.04
2023 0.03 ₱84,133.53
2024 0.03 ₱86,657.54
2025 0.03 ₱89,257.27
2026 0.03 ₱91,934.98
2027 0.03 ₱94,693.03
2028 0.03 ₱97,533.82
2029 0.03 ₱100,459.84
Table 31. Projected Communication Consumption

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GANTT CHART OF PRE-OPERATING ACTIVITIES

Table 32. Gantt Chart of Pre-operating Activities

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SAFETY CONSIDERATION

In starting a business, the first thing that should be considered is the high level of

safety. A lousy incident can cost your company a lot and can damage the reputation of

the company.

Here are some of the ways to protect employees as well as the company and

some company’s thousands of dollars and lost productivity.

1. Perform a job hazard analysis

Job hazard analysis is a process and not just any document. It focuses on

the relationship between the workers, the task, the tools, and the work environment.

Step 1: Create a list of every job or duty that will be performed in your

workplace.

Step 2: Carefully document every hazard employees will face in

performing those duties.

2. Regular practice enforces safe habits

When the worst will happen, they will know immediately how to act

because a knowledgeable employee is a safe employee. Repeated safety training will

not only help the company’s money in the long-term.

3. Enforce the rule of reporting

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“If you see something, say something” is considered to be an excellent

motto for workplace safety. You can’t do your job if you aren’t aware of the dangers

present inside and outside your workplace.

4. Provide Personal Protective Equipment (PPE)

The type of safety equipment you need will vary or depend on the job

itself. The following are the most common safety equipment:

*Gloves

*Goggles

*Fire Extinguishers

*Gas Detection Equipment

It is not enough to provide your people with the right safety equipment for the

job. The head should also make sure that every employee knows how to use the

equipment (should be trained) properly.

5. Lead by example

Some employees will take their cues from their leaders or head, which is

why leading by example, is a great way to make sure your employees stay safety

compliant.

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6. Reward Safety Awareness

One of the biggest goals to achieve is a zero–incident workplace. While

promoting reward safety awareness, be sure to encourage all employees to report all

incidents to manage still.

7. Think Long-term

Don’t forget to consider the long-term and stress-related injuries that can

cause missed days, lost productivity, and high turnover.

8. Ensure that breaks are taken

A large amount of workplace-related injuries happen because employees

are tired and not paying attention to their surroundings.

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EVALUATION

After completion of the detailed feasibility study for the project, the evaluation

occurs from the technical aspect. The development of a technical feasibility study is

helpful in terms of organizing the information correctly, increasing overall transparency,

and promoting a stronger base for the recommendations provided at the end of the

assessment.

Technical Aspect explains the processes of making the proposed product based

on the calculated expected demand. From there, the computation of inventory and

headcount was determined. The expected numbers of production workforce of JEMS

Manufacturing have 59 workers (26 for peeling, four fermentation, four strainings, 7 for

100 ml filling, 2 for 200 ml filling, 1 for 350 ml filling, and 15 for packaging).

The design of the plant (production area) is expected to meet the particularized

need during the identification face. Engineering and architectural requirements

(materials used in building the facility) of the project are durable. The technicality of the

designs of processes and plant are less prone to unacceptable technical risks, and the

models of the Procedure and establishment are made flexible to adopt changes for

future improvement.

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MANAGEMENT

STUDY

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CHAPTER 3

MANAGEMENT STUDY

In a broader sense, management is viewed as the direction and

coordination of the human and non-human resource to achieve outputs

which meet the needs of external users.

MAJOR ASSUMPTIONS

 JEMS Manufacturing has employed the right and skilled employees to

provide a product with good quality for the customer and to ensure the

monitoring and maintaining the functionality of all facilities and

equipment.

 JEMS Manufacturing will operate 8 hours a day.

 There will be no increase in the number of employees for the first ten

years.

 Employees are assigned appropriately according to their respective

functions. The salary and wages differ accordingly to their position and

performance.

 The employees hired by the company are capable and flexible to their

availability to perform the task that they are assigned to.

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TITLE OF THE PROJECT

This study is entitled “Fermented Musa Acuminata: An Alternative Source of

Vinegar.”

A proper project title describes the whole assignment in one sentence. It helps

the team to refer the Project with the assigned Name. The project title helps you to

understand the primary goal of the project work and deliverables. A project name can

be the product name when it completed.

The proponents arrived with this study to provide a new source of vinegar, a

resource that can be fermented for a shorter period than those of the other resources,

organic, cheaper, and full of health benefits. Though there are many competitors in

terms of vinegar, the proponents still want to prove that people will patronize the

naturally made vinegar.

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COMPANY LOGO

JEMS came from the first letter of the first name of the researchers, namely,

John Carlo, Erica, Marjorie, and Stephanie, in which, will serve as the founder and

owners of the company. The name is made shorter for the people to memorize it

quickly. The color of the company name in the logo is green because it represents the

nature where a person lives and other living and non-living things. The color green is

refreshing and not painful to look at.

Besides, the company name is the product of the company. As shown in the

logo, banana is placed at the back of the vinegar for the customers to easily identify that

our product is purely made from banana. Our company is really into a natural and

organically produced product.

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COMPANY VISION, MISSION & CORE VALUES

Vision

To create local opportunity, growth and impact

in every community and country around the world.

Mission

 To maintain growth and high profitability.

 To promote our product in a professional and friendly manner.

 To inspire healthier communities by connecting people to the naturally made

product.

 To build the best product and cause no harm.

Core Values

Customer Commitment: We develop relationships that make a positive difference in our

customers' lives.

Quality: We provide outstanding products and unsurpassed service that, together,

deliver premium value to our customers.

Integrity: We uphold the highest standards of integrity in all of our actions.

Teamwork: We work together, across boundaries, to meet the needs of our customers,

and to help our Company win.

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Respect for People: We value our people, encourage their development, and reward

their performance.

Good Citizenship: We are good citizens in the communities in which we live and work.

A Will to Win: We exhibit a strong will to win in the marketplace and every aspect of our

business.

Personal Accountability: We are personally accountable for delivering on our

commitments.

FORM OF BUSINESS OWNERSHIP

The type of business ownership that JEMS Manufacturing would like to use is the

General Partnership because it gives all partners permission to actively control or

manage the business. This means that every owner has the authority to make decisions

about how the company is run as well as the authority to make legally binding decisions.

Unless the partners have a partnership agreement, each partner will have equal power.

Partners in a general partnership don't have any limit on their responsibility for

the debts of the business. This means that the partner could lose more than just his

investment in the market - personal assets would have to be used to pay business debts

if necessary. Each partner in a general partnership is also "jointly and severable" liable

for debts of the business. Joint and severable liability means is that each partner is

equally responsible for the obligations of the company, but each is also totally liable. So

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if a creditor can't get what he is owed by one or more of the partners, he can collect it

from another partner, even if that partner has already paid his share of the total debt. If

someone sues your partnership and obtains a significant judgment, and your partner

doesn't have the money to pay his share of it, you will have to pay the entire amount.

ORGANIZATIONAL STRUCTURE

The organizational chart is a graphical formation that displays the essential

details in the organizational structure, including the significant functions and

their respective relationships among positions according to authority and responsibility.

This refers to the diagram showing the critical features of the line and staff

organizational structure.

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General
Manager

Plant Manager HR Manager

Production Procurement
Chemist (QA) Sales Staff Personnel OIC Marketing Staff
Supervisor (QC) Offficer

Production
Maintenance
Workers

security

janitor

driver

Figure 30. Organizational Structure

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JEMS Manufacturing is composed of different people with different roles that

will help run the business and make it possible to succeed. Since the company is new,

the workforces considered are just the basic ones. The highest rank, as of the moment,

is the general manager. Under the general manager are plant manager and HR manager.

The general manager is responsible for the overall operation of the company, the plant

manager is for the production only, and the HR manager will handle the personnel

involved in the company. Production supervisor will check the quality of the product

during the production while the chemist will make sure that the product is of good

quality before shipment. And lastly, to help achieve safety, both janitor and security

guard are also present in the organization.

PERSONNEL PLANTILLA

Working Monthly Basic

Description Annual Salary
Hours/shift Salary
General Manager 8 ₱50,578 ₱606,936
HR Manager 8 ₱44,400 ₱532,800
Plant Manager 8 ₱39,640 ₱475,680
Sales Staff (1) 8 ₱15,174 ₱182,088
Marketing Staff (1) 8 ₱15,669 ₱188,028
Personnel OIC 8 ₱14,733 ₱176,796
Procurement Officer 8 ₱14,733 ₱176,796
Production Supervisor 8 ₱22,444 ₱269,328
Production Line Crew (peeling) 26 heads 8 ₱12,190 ₱3,803,280
Production Line Crew (fermenting) 4 heads 8 ₱12,190 ₱585,120
Production Line Crew (straining) 4 heads 8 ₱12,190 ₱585,120
Production Line Crew (filling) 10 heads 8 ₱12,190 ₱1,462,800
Production Line Crew (packaging) 15 heads 8 ₱12,190 ₱2,194,200
Chemist 8 ₱19,572 ₱234,864
Janitor 1 8 ₱11,805 ₱141,660
Janitor 2 8 ₱11,805 ₱141,660
Security Guard 1 8 ₱16,645 ₱199,740

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Security Guard 2 8 ₱16,645 ₱199,740

Security Guard 3 8 ₱16,645 ₱199,740
Driver (3 heads) 8 ₱14,102 ₱507,672
TOTAL ₱340,677 ₱11,451,718
WWW.indeed.com.ph/salaries

Table 33. Personnel Plantilla (2019)

JOB DESCRIPTION & SPECIFICATIONS

Job Description summarizes the duties of the position and states the essential

responsibilities of the job. The job posting should also include a concise picture of the

skills required for the area to attract qualified job candidates. Organize the job

description into five sections: company information, job description, job requirements,

benefits, and a call to action. Be sure to include keywords that will help make your job

posting searchable. A well- defined job description will help attract qualified candidates,

as well as help, reduce employee turnover in the long run.

Job Specification is derived from job analysis. It provides the qualifications, skills,

experience, knowledge, and other attributes that the applicant should have to do the

specified job.

Note: The proponents decided to have an on-call accounting consultant and

maintenance worker instead of in-house.

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JOB TITLE: General Manager

JOB DESCRIPTION: Directs and manage organization’s business activities. Develop and

implement effective business strategies and programs. Allocate budget resource,

formulate policies, coordinate business operations, monitor and motivate staffs,

improve administration processes, identify business opportunities, and monitor financial

activities.

JOB SPECIFICATION: Should possess excellent communication skills, superior knowledge

of business functions, exceptional budgeting and finance skills, and strong leadership

qualities. The noteworthy General Manager should account for all business activities,

support staff development, enhance efficiency, drive sales and improve revenue,

maintain relationships with clients, enhance the organization's image, and meet overall

growth objectives.

JOB TITLE: HR Manager

JOB DESCRIPTION: Recruitment, training, career development, compensation and

benefits, employee relations, industrial relations, employment law, compliance,

disciplinary and grievance issues, redundancies, etc.

JOB SPECIFICATION: 7-10 years of progressively more responsible positions in human

resources, preferably in a similar industry in two different firms. Has an experience in

supervising and managing a professional staff. Experience as a trusted resource as a

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member of a senior level executive team. Experience in multiple locations and globally is

a plus for the HR director job candidates.

JOB TITLE: Plant Manager

JOB DESCRIPTION: Oversees all daily operations of the plant from production and

manufacturing to ensure policies and procedures are followed.

JOB SPECIFICATION:

 Male or female

 Possesses a bachelor’s degree or master’s degree in business administration.

 Must have at least 5 of work experience in a similar field.

 Must be a fluent and effective English speaker.

 Knowledgeable of office

 Administration procedures and resource management disciplines.

 Must be able to perform each essential duty and responsibility safely and

satisfactorily.

 Knowledgeable in TQM, QC, and QA.

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JOB TITLE: Marketing Staff

JOB DESCRIPTION: Responsible for all marketing strategies and activities within the

company. Oversees the marketing department and provides direction and feedback on

major projects. Makes decision regarding product distribution, budgeting, branding, and

sales.

JOB SPECIFICATION: Should have an advanced degree in marketing or any related field.

Has an extensive marketing experience. Has better understanding in business practices.

Has budgeting and financial knowledge.

JOB TITLE: Personnel OIC

JOB DESCRIPTION: Is responsible in monitoring the maintenance, security, janitor, and

driver. Secures premises and personnel by patrolling property; monitoring surveillance

equipment; inspecting buildings, equipment, and access points; permitting entry.

JOB SPECIFICATION:

 Administration procedures and resource management disciplines.

 Must be able to perform each essential duty and responsibility safely and

satisfactorily.

 Must have at least two years of work experience in a similar or related field.

 Must have excellent communication and interpersonal skills.

 Familiarity with company policies and legal guidelines of there later field.

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JOB TITLE: Procurement Officer

JOB DESCRIPTION: Buy products for resale by their employer or services to be used by

their employer on an enterprise level. This involves tasks such as evaluating product

quality, researching different vendors, and negotiating contracts.

JOB SPECIFICATION:

 Proven work experience as a Purchasing Officer, Purchasing Agent or similar role

 Good knowledge of vendor sourcing practices (researching, evaluating and

liaising with vendors)

 Hands-on experience with purchasing software (e.g. Procurify or SpendMap)

 Understanding of supply chain procedures

 Solid analytical skills, with the ability to create financial reports and conduct cost

analyses

 Negotiation skills

 BS in Logistics, Business Administration or relevant field

JOB TITLE: Production Supervisor

JOB DESCRIPTION: Communicate job expectations, planning, monitoring, counseling,

and disciplining employees. Initiating, coordinating, and enforcing systems, policies, and

procedures.

JOB SPECIFICATION:

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 Possesses a bachelor’s degree or master’s degree in business administration.

 Must have at least two years of work experience in a similar or related field.

 Must have excellent communication and interpersonal skills.

 Familiarity with company policies and legal guidelines of there later field.

 Proper knowledge in logistical details focusing on efficiency, and he/she can

derive solutions out of analyses.

 Displays a pleasing personality and empathetic towards fellow workers.

 Knowledgeable in food tech.

JOB TITLE: Accounting Consultant

JOB DESCRIPTION: Experts in analyzing and preparing financial documents and reports,

such as tax returns, income statements, and balance sheets.

JOB SPECIFICATION:

 Must be a CPA

 Must have at least two years of work experience in a similar or related field.

 Must have a pleasing personality

JOB TITLE: Security

JOB DESCRIPTION: Plans, implements, and oversees the company’s employee safety at

work.

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JOB SPECIFICATION:

 Secondary Education or master’s degree in occupational health or related field.

 Should know the OSHA standard.

 Problem-solving skills

JOB TITLE: Chemist

JOB DESCRIPTION: Conducts qualitative and quantitative experiments on chemical

substances to ensure quality control or develop new products or knowledge. The

Chemist will perform a variety of tests and use different techniques to conduct

experiments on organic and inorganic compounds.

JOB SPECIFICATION:

 Bachelor’s degree in Chemistry, Analytical Chemistry, etc.

 Minimum of 2 years’ experience in a laboratory setting

 Pharmaceutical and analytical chemistry experience preferred

 Quality control experience strongly preferred

 Solid working knowledge of analytical method development and validation

 Commitment to compliance with standard operating procedures

 Committed to safety and compliance with lab procedures/guidelines

 Consistent, accurate recording and reporting of data/results

 Thorough and precise in all tasks

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 Excellent communication and reporting skills

 Strong computer skills, including Microsoft Office and databases

JOB TITLE: Sales Staff

JOB DESCRIPTION: Works closely with customers to determine their needs, answer their

questions about our products and recommend the right solutions. Promptly resolve

customer complaints and ensure maximum client satisfaction. Stays up-to-date with

product features and maintain Company’s visual appearance in high standards.

JOB SPECIFICATION:

 Proven work experience as a Retail Sales associate, Sales representative or

similar role

 Basic understanding of sales principles and customer service practices

 Proficiency in English

 Basic Math skills

 Working knowledge of customer and market dynamics and requirements

 Track record of over-achieving sales quota

 Hands-on experience with POS transactions

 Familiarity with inventory procedures

 Solid communication and interpersonal skills

 A friendly and energetic personality with customer service focus

 Ability to perform under pressure and address complaints in a timely manner

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 Availability to work flexible shifts

 High school degree; BS degree in Marketing or related field would be a plus

JOB TITLE: Janitor

JOB DESCRIPTION: Cleaning duties: cleaning the floor, shampooing the rugs, washing

walls and glass, and removing the rubbish.

JOB SPECIFICATION:

 Must have a high school Diploma.

 Have a pleasing personality.

 Basic arithmetic skills

JOB TITLE: Security Guard

JOB DESCRIPTION: Patrolling property, monitoring surveillance equipment, inspecting

the facility, equipment, access point, and permitting entries.

JOB SPECIFICATION:

 Must be able to communicate effectively, orally, and writing.

 Able to think quickly and critically.

 Be mindful of the customer and public service.

 Exercise good judgment in potentially dangerous situations.

 Know about public safety and security.

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JOB TITLE: Production Line Crew ( Sterilizing, Peeling, Fermenting, Straining, Filling and

sealing/Packaging)

JOB DESCRIPTION: Monitors and performs the last process and makes sure that the

product is good to go.

JOB SPECIFICATION:

 Any degree subject is acceptable even without a high school diploma, although

high school graduates are more preferred.

 Considers work ethics and organizational skills.

 Must be able to work briskly and efficiently.

 Must be able to concentrate on doing repetitive tasks.

JOB TITLE: Driver

JOB DESCRIPTION: Loading, transporting, and delivering items to clients or businesses in

a safe, timely manner

JOB SPECIFICATION: Driver's License, Courteous, Previous Driving Experience, Good

Customer Service Skills, Good Communication Skills, No Driving Disqualifications With

the Last Three Years, Problem-Solver, Patient, Pleasant, Enthusiastic, Attention to Detail,

Ability to Handle Fragile Packages and Parcels With Care, Ability to Work Under

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Pressure, Ability to Work On a Team, Ability to Drive Long Distances and Sit for Long

Periods of Time, Be Physically Fit, Able to Meet Deadlines

WORKING SCHEDULE

THURSD-
POSITION MONDAY TUESDAY WEDNESDAY FRIDAY SATURDAY SUNDAY
AY
General
8AM-5PM 8AM-5PM 8AM-5PM 8AM-5PM 8AM-5PM 8AM-5PM
Manager
HR Manager 8AM-5PM 8AM-5PM 8AM-5PM 8AM-5PM 8AM-5PM 8AM-5PM
Plant
8AM-5PM 8AM-5PM 8AM-5PM 8AM-5PM 8AM-5PM 8AM-5PM
Manager
Production
8AM-5PM 8AM-5PM 8AM-5PM 8AM-5PM 8AM-5PM 8AM-5PM
Supervisor
Chemist 8AM-5PM 8AM-5PM 8AM-5PM 8AM-5PM 8AM-5PM 8AM-5PM
Personnel
8AM-5PM 8AM-5PM 8AM-5PM 8AM-5PM 8AM-5PM 8AM-5PM
OIC
Sales Staff 8AM-5PM 8AM-5PM 8AM-5PM 8AM-5PM 8AM-5PM 8AM-5PM
Marketing
8AM-5PM 8AM-5PM 8AM-5PM 8AM-5PM 8AM-5PM 8AM-5PM
Staff
Procurement
8AM-5PM 8AM-5PM 8AM-5PM 8AM-5PM 8AM-5PM 8AM-5PM
Officer
Production
Line Crew 8AM-5PM 8AM-5PM 8AM-5PM 8AM-5PM 8AM-5PM 8AM-5PM
(peeling)
Production
Line Crew 8AM-5PM 8AM-5PM 8AM-5PM 8AM-5PM 8AM-5PM 8AM-5PM
(fermenting)
Production
Line Crew 8AM-5PM 8AM-5PM 8AM-5PM 8AM-5PM 8AM-5PM 8AM-5PM
(straining)
Production
Line Crew 8AM-5PM 8AM-5PM 8AM-5PM 8AM-5PM 8AM-5PM 8AM-5PM
(filling)
Production
Line Crew 8AM-5PM 8AM-5PM 8AM-5PM 8AM-5PM 8AM-5PM 8AM-5PM
(packaging)
Driver 8AM-5PM 8AM-5PM 8AM-5PM 8AM-5PM 8AM-5PM 8AM-5PM
Janitor 1 8AM-5PM 8AM-5PM 8AM-5PM 8AM-5PM 8AM-5PM 8AM-5PM
Janitor 2 8AM-5PM 8AM-5PM 8AM-5PM 8AM-5PM 8AM-5PM 8AM-5PM
Security 7AM-
7AM-3PM 7AM-3PM 7AM-3PM 7AM-3PM 7AM-3PM 7AM-3PM
Guard 1 3PM
Security 3PM- 3PM- 3PM- 3PM-
3PM-11PM 3PM-11PM 3PM-11PM
Guard 2 11PM 11PM 11PM 11PM
Security 11PM- 11PM- 11PM- 11PM-
11PM-7AM 11PM-7AM 11PM-7AM
Guard 3 7AM 7AM 7AM 7AM
Table 34. Working Schedule

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Jan-01 New Year’s Day

Apr-09 Day of Valor
Apr-18 Maundy Thusday
Apr-19 Good Friday
May-01 Labor Day
Jun-05 Eidul Fitr
Jun-12 Independdence Day
Aug-12 Eidul Adha
Aug-26 National Hereos Day
Nov-30 Bonifacio Day
Dec-25 Christmas Day
Dec-30 Rizal Day
Table 35. List of Regular Holidays

Jan-02 Public Holiday

Feb-05 Chinese New Year
Feb-25 People Power
Apr-20 Black Saturday
May-13 Election
Aug-21 Ninoy Aquino Day
Nov-01 All Saints Day
Dec-08 Immaculate Conception
Dec-31 New Year’s Eve

Table 36. List of Special Non-working Holidays

Annual Holidays and Weekends Tally

Number of Days in a Year 365
Number of Sundays 52
Number of Regular Holidays 12
Number of Special Non-Working Holidays 11
Number of Operating Days 288
Table 37. Annual Holidays and Weekends Tally

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RECRUITMENT PROGRAM

A recruitment plan is a strategic method of hiring employees. It plays as a

timeline for companies to find qualified applicants without causing downtime for the

company.

1. Application form and CV’s

2. Online screening and shortlisting

3. Interviews

4. Psychometric testing

5. Ability and aptitude tests

6. Personality profiling

ORIENTATION & TRAINING

Employees should receive orientation on their first day on the job so that they

understand everyone’s role and can contribute to an Effective Internal Responsibility

System (IRS). An employee needs to be trained on the correct way to do their job before

they are left to work alone so that the risk of injury or illness is minimized. It is essential

to protect your workers and your business an injured employee will not be able to

support your business entirely.

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Training is essential. It provides the knowledge and practice to prevent injuries

and illnesses in the workplace. Some training programs will be delivered to everyone,

while others are position or task-specific.

The content of your training program can be organized in different ways. One

example would be:

 Generic Orientation covers information common to all workplace parties and can

be often delivered in a group setting. Information like duties and responsibilities,

hazard reporting, first aid procedures, violence and harassment policy, generic

WHMIS, and common workplace hazards fall into this category.

 Job-specific hazard training focuses on teaching employees to work safely with

the hazards to which they will be exposed while doing their job. This training

would cover content such as safe work procedures, specific PPE, use, PPE care

and replacement, lockout, and tag-out procedures; job-specific WHMIS hazards.

CODE OF DISCIPLINE

Having an employee code of conduct protects your business and informs

employees of expectations. Even the smallest of organizations can (and should) develop

a code of conduct, ideally coupled with an employee handbook. These documents need

to be elaborate in design or contain complex content, but the potential benefits of even

the simplest of employee documents outweigh the time and cost of producing them.

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An employee code of conduct includes expectations and defines acceptable

behaviors. It differs from a code of ethics in that it contains information pertinent to the

individual and their behavior on the job, but may contain detailed offshoot information

from the company’s ethics code. Many companies require the employee to sign the

code of conduct, at which point it becomes a legal agreement between the employer

and employee. A copy is kept in the employee’s file for documentation if necessary

CODE OF DISCIPLINE

 Be inclusive.

We welcome and support people of all backgrounds and identities. This includes,

but is not limited to members, gender identity and expression, race, ethnicity,

culture, national origin, social and economic class, educational level, color,

immigration status, sex, age, size, family status, political belief, religion, and

mental and physical ability.

 Be considerate.

We all depend on each other to produce the best work we can as a company.

Your decisions will affect clients and colleagues, and you should take those

consequences into account when making decisions.

 Be respectful.

We won’t all agree all the time, but disagreement is no excuse for disrespectful

behavior. We will all experience frustration from time to time, but we cannot

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follow that frustration becomes personal attacks. An environment where people

feel uncomfortable or threatened is not a productive or creative one.

 Choose your words carefully.

Always conduct yourself professionally. Be kind to others. Do not insult or put

down others, harassment and exclusionary behavior aren’t acceptable.

 Don’t harass.

In general, if someone asks you to stop something, then stop. When we disagree,

try to understand why. Differences of opinion and disagreements are mostly

unavoidable. What is important is that we resolve conflicts and differing views

constructively.

 Make differences into strengths.

We can find strength in diversity. Different people have different perspectives on

issues, and that can be valuable for solving problems or generating new ideas.

Being unable to understand why someone holds a viewpoint doesn’t mean that

they’re wrong. Don’t forget that we all make mistakes, and blaming each other

doesn’t get us anywhere. Instead, focus on resolving issues and learning from

mistakes.

GENERAL POLICIES

Policies establish rules of conduct within an organization, presenting the

responsibilities of both employees and employers. It is made to protect the rights of the

workers as well as the business. Policies will depend on the need of the organization,

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various rules, and procedures regarding employee conduct, behavior, dress code,

privacy, and other area related to the terms and conditions of employment. Here are

some of the general policies of JEMS Manufacturing Corporation:

 Employee Conduct Policies – establishes the responsibility and duty that every

employee must adhere to as a condition of employment. Guideline for

appropriate employee behavior, dress code, workplace safety procedure,

harassment policy, etc.

 Equal Opportunity Policy – Promotes fair treatment inside the organization.

 Attendance and Time off Policy – Set rules and guidelines to employee work

schedules. Attendance policy shows how employees may schedule time off or

notify superiors of absence, leave, or late arrivals.

 Substance Abuse Policies – Prohibit the use of drugs, alcohol, and tobacco

products during working hours, on company property.

 Workplace Security Policies – protects not only the people within the

organization but also the physical and intellectual property. Includes entrance to

the facility, such as the use of ID and procedures for signing in guests.

PERFORMANCE MANAGEMENT & APPRAISAL

Performance management is the process of identifying, measuring, managing

and developing the performance of the human resources in an organization.

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Performance appraisal, on the other hand, is the ongoing process of evaluating

employee performance.

To be valid at evaluating an employee’s performance, a supervisor must

understand the entire performance management and appraisal process. In other words,

supervisors need to see the “Big Picture” to recognize how the various parts of the

system fit together. This can be achieved by looking at all of the system’s components,

individually, and then studying how the different parts relate to one another. One of the

best methods to accomplish this is to look at each of the parts of the process

sequentially. Those parts include:

• Performance Planning

• Coaching and Counseling

• Interim or Mid-Point Review

• Annual or Final Performance Appraisal

These three parts of the performance management and appraisal puzzle are

reduced to the following oversimplifications:

• First, tell employees what is expected of them and give them a chance to

accomplish it.

• Second, tell them from time-to-time how they are doing, especially when they

are not performing as expected and offer suggestions for improvement.

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• Third, tell them how they have done overall throughout the performance

rating period and use that information in future performance planning

Unfortunately, most things are easier said than done. However, this does not

mean the performance appraisal process cannot be mastered. It can mainly through

study and practice. We will begin by studying what each part of the process entails, that

is, what supervisors have to do when they have to do it, and what forms they need to

complete to document the action they took.

COMPENSATION & BENEFITS

1. 13th Month Pay

Equivalent to 1/12 of the basic salary received by an employee within the

year. If an employee worked for less than a year (regardless of the cause for the

termination of his employment), the amount due to him is determined by dividing the

total salary he received by the number of months he was employed. The computation of

the basic salary does not include allowances and monetary benefits that are not

considered or integrated as part of the employee's regular compensation. The items

that are taken off the list are cash equivalent of unused vacation and sick leave credits,

overtime, premium, night differential, and holiday pay and cost-of-living allowance. If,

however, these benefits are, by agreement, company practice or policy treated as part

of the basic salary, and then they shall be included in the computation of an employee's

13th-month pay. Although the law requires that the extra payment be given not later

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than Dec. 24, the employer may provide 50 percent before the opening of the regular

school year and the balance on the cut-off date mentioned.

2. Maternity Leave

Every employer shall grant to any pregnant woman employees who has

rendered an aggregate service of at least six months for the last twelve months,

maternity leave of at least two weeks prior to the expected date of delivery and

another four weeks after standard delivery or abortion, with full pay based on her

regular or average weekly wages.

From the above provision, a qualified pregnant woman employee shall be

entitled maternity leave of at least two weeks before the expected date of delivery and

another four weeks after standard delivery or abortion.

3. Paternity Leave

Paternity leave refers to the benefits granted to a married male employee in the

private and public sectors allowing him to take a vacation for seven days, with full pay,

for the first four deliveries of his legitimate spouse with whom he is cohabiting.

4. Sick Leave

The number of days of paid sick leave you are entitled to depend on your

period of service, up to 14 days for outpatient non-hospitalization vacation, and 60 days

for hospitalization leave. The 60 days of hospitalization leave includes the 14 days

outpatient sick leave entitlement. If you have for months or more, you are entitled to 14

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days of outpatient leave and 60 days of hospitalization leave every year. The number of

the day should not be proprated.

5. Vacation Leave

Granted to employee for personal reasons, the approval of which is contingent

upon the necessities of the service Vacation leave without pay is considered a gap in the

service, FIVE (5) DAYS FORCED/MANDATORY LEAVE

6. Social Security System

Social Security System (SSS) was formed to provide private employees

together with their family's protection against old age, sickness, disability, and death. All

employed people under 60 years and who earn more than Php.1,000 every month are

supposed to contribute a certain percentage to the SSS. These contributions are

normally deducted from the employee's salaries. Every month, the employer usually

withholds the figures from the wages.

Figure 31. SSS Contribution

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7. Phil Health

The National Health Insurance Program was established to provide health

insurance coverage and ensure affordable, acceptable, available, and accessible health

care services for all citizens of the Philippines. It shall serve as the means for the healthy

to help pay for the care of the sick and for those who can afford medical care to

subsidize those who cannot. It shall initially consist of Programs I and II or Medicare and

be expanded progressively to constitute one universal health insurance program for the

entire population. The application shall include a sustainable system of funds

constitution collection, management, and disbursement for financing to avail of a basic

minimum package and other supplementary packages of health insurance benefits by a

progressively expanding proportion of the population. The program shall be limited to

paying for the utilization of health services by covered beneficiaries. It shall be

prohibited from providing health care directly, from buying and dispensing drugs and

pharmaceuticals, from employing physicians and other professionals to render care

directly, and from owning or investing in health care facilities.

Figure 32. PhilHealth Contribution

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8. Pag-ibig Fund

It is an essential benefit to employees because it offers savings, short term loan,

and access to housing programs. The advantage is being provided by the proposed

business not only because it is mandatory by the government, but also the management

wants to

give their employees the benefit that they will treasure and which can also help others.

Figure 33. Pag-ibig Fund Contribution

CONTINGENCY PLAN

The development of the JEMS Manufacturing Contingency Plan is required by

executive decisions and to meet regulatory mandates. The JEMS Manufacturing

management must maintain an information assurance infrastructure that will ensure

that its information resources maintain availability, confidentiality, integrity, and non-

repudiation of its data. Further-more, JEMS Manufacturing management must provide

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its strategic information resources management capabilities. Therefore, the following

Contingency plans of JEMS Manufacturing are:

Disaster Preparedness Planning includes the identification of risks,

vulnerabilities, possibilities of influence, organizational resources and capacity, division

of responsibilities, developing practices and processes as well as implementing an action

plan to have the best possible preparedness in case of disaster.

If a worker decides to go on leave, the plant manager must be informed at least a week

before the proposed period of the vacation. This is also subject to the approval of the

plant manager. If approved, the worker should plan out all activities to be done during

the period of absence and should be delegated to his/her subordinate. Other

unexpected concerns within the responsibility of the worker must be addressed to

his/her superior. Furthermore, the worker has to submit a letter stating his/her reasons

for filing a leave, and the leave would not be validated until he/she obtains a signature

of approval from the plant manager. In case a worker is absent due to sickness or

emergency, the superior or the assistants of that work should be approached if there be

any concerns with the job affected.

CUSTOMER MANAGEMENT

Customer management or customer relationship management is an approach to

manage a company's interaction with current and potential customers. It uses data

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analysis about customers' history with a company to improve business relationships

with customers, specifically focusing on customer retention and ultimately driving sales

growth. Customer management is defined as the process of managing the relationship

between an organization, its people and its customers over time. For sustained success,

companies need to align their customer strategy with the company’s aims and

objectives. The profitability of a firm depends on its ability to identify, grow, and retain

profitable customers. This can be achieved through combining a deep understanding of

customer needs, behaviors, and value, with the ability to engage specific customers

optimally at various touchpoints. Also, this enables the company to optimize customer

satisfaction and develop a relationship of trust with its customers.

5 Example of Customer Management

 Sending out a thank you when a customer makes a purchase.

 Upsell or cross-sell a client if they purchase a particular product.

 We are offering a birthday greeting with a promo code.

 Sending a discount to a customer that hasn't made a purchase recently

 Notifying customers when an item on their wish list goes on sale.

RESEARCH & DEVELOPMENT

Directs and implements an organization’s research and development policies,

objectives, and initiatives. Ensures research and development activities will maintain an

organization’s competitive position and profitability. Relies on extensive experience and

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judgment to plan and accomplish to goals, performs a variety of tasks, leads, and directs

the work of others. A full degree of creativity and latitude is expected.

Manages and directs the research and development programs to meet

organizational needs and to capitalize on potential new products. Develops and

implements research and development procedures and techniques.

Research and Development aim to improve the current technologies offered by

an organization or to develop innovations that strengthen the organization’s position in

the marketplace. The sector includes many companies that are dedicated research and

development businesses that focus on particular fields or areas of work.

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FINANCIAL STUDY

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CHAPTER 4

FINANCIAL STUDY

INTRODUCTION

This chapter will discuss the needs of the company. It also includes the

assessment of the viability of this study concerning the capital it will put up, the sales it

will accumulate, and the revenues it will generate after considering the costs. The

business will incur. The researchers, moreover, reside on the following assumptions,

which indicate the stability and profitability of the company.

MAJOR ASSUMPTIONS

This chapter observes and assumes the following to be faithful:

 The company would be receiving a start-up investment worth Php.

1,250,000.00 each from Mr. Abejo, Ms. Caingles, Ms. Katada, and Ms.

Pilapil, assuming up to an amount of Php.5,000,000.00 plus an additional

bank loan of Php.85,000,000.00. This would serve as the capital of the

company that would help finance the necessary expenses needed to start

production.

 The company's business year is to start from January to December. It is

operating for a total of 288 days.

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 The workforce needed to carry out the entire business consists of direct,

indirect, and administrative labor. Part of the administrative job is a

single outsourced service.

 In terms of direct labor and compensation for the human resource, the

company assumes the Php 386.00 minimum wage with NO annual wage

increase. The company also provides the employee’s benefits that are

based on mandatory government requirements.

 All transactions in sales and supplies observe a 30-day credit term.

 All assets are disposed at the end of its useful life for sanitary and health

purposes.

WORKING CAPITAL REQUIREMENT (PARTNER'S EQUITY)

It is already given that money, for a business, is necessary to fund marketing,

employees, customer acquisition costs, capital, and all other expenses in the industry.

When opening or starting a business, it is either you will fund the shop yourself, or you

will get an investor.

For JEMS Manufacturing’s standpoint, the initial funding will be given by the

owners, having the role of both owner and investor. The investors, namely Majorie

Caingles, John Carlo Abejo, Erica Katada, and Stephanie Pilapil, will invest Php

1,250,000.00 each for their business to run.

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All in all, business needs money for the business to succeed and be sustainable in

the long run.

INVESTORS INVESTMENT

Mr. John Carlo Nino V. Abejo Php 1,250,000

Ms. Marjorie L. Caingles Php 1,250,000

MS. Erica M. Katada Php 1,250,000

Ms. Stephanie G. Pilapill Php 1,250,000

Table 38. Investment

ALTERNATIVE SOURCES OF FINANCING

Most of the businesses that are new to the market industry take out bank loans

for a specific reason, though borrowing money is expensive for a company and can raise

risk in the future. To manage the day-to-day operations and expenses, the company

should have pending money regardless of what alternative they use.

The proponents decided to have a bank loan as an alternative source of

financing. The proponents will loan Php 85,000,000.00 initially to help sustain the

business.

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LOAN AMORTIZATION

The table shows the amortization schedule after acquiring the principal amount

loaned from the bank, considering the payment terms:

AMORTIZATION SCHEDULE
OUTSTANDING
ANNUAL
YEAR INTEREST PAID PRINCIPAL PAID PRINCIPAL
PAYMENT
BALANCE
0 85,000,000.00
1 20,664,144.44 5,848,000.0000 14,816,144.44 70,183,855.56
2 20,664,144.44 4,828,649.26 15,835,495.17 54,348,360.39
3 20,664,144.44 3,739,167.19 16,924,977.24 37,423,383.15
4 20,664,144.44 2,574,728.76 18,089,415.68 19,333,967.47
5 20,664,144.44 1,330,176.96 19,333,967.47 -
Total 103,320,722.181 18,320,722.1805 85,000,000.00

Payment Terms:

Principal: Php 85,000,000.00

Payable annually every DECEMBER 31

Annual Payment is Php 20,664,144.44

Interest Rate is 6.88%

Annual Payment Computation:

𝐴𝑛𝑛𝑢𝑎𝑙 𝑃𝑎𝑦𝑚𝑒𝑛𝑡𝑠 = 𝑃𝑟𝑖𝑛𝑐𝑖𝑝𝑎𝑙

𝑃𝑉𝐹
𝐴𝑚𝑜𝑢𝑛𝑡

1 − (1 + 𝑖)−𝑛
𝑃𝑟𝑒𝑠𝑒𝑛𝑡 𝑉𝑎𝑙𝑢𝑒 𝐹𝑎𝑐𝑡𝑜𝑟(𝑃𝑉𝐹) =
𝑖

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Interest Paid

= Outstanding Balance x Interest Rate

Annual Payment Computation

= Annual Payment – Interest Paid

Outstanding Principal Balance

= Outstanding Principal Balancen-1 – Principal Paid

SELLING PRICE & SALES FORECAST

The company will have a suggested retail price of Php 18.00, Php 20.00, and Php

50.00 for 100 ml, 200 ml, and 350 ml, respectively. For 100ml and 200 ml, it will be

vinegar alone, while for 350 ml, there will be spices such as chili pepper, ginger, and

garlic.

The forecasted selling price and sales forecast are shown below.

The price of Musa Acuminata Vinegar was calculated using the formula below:

Price = Total Cost + Mark Up Percentage

Note: The price varies according to the volume of the vinegar.

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2019
Overhead
Product Type Material Labor Mark Up Price
Fixed Variable Total Cost
100 ml 11.46 0.33 0.17 0.228 12.19 49% ₱18.00
200ml 13.46 0.88 0.03 1.53 15.90 42% ₱20.00
350ml 34.46 2.46 0.004 8.53 45.45 37% ₱50.00

2020
Overhead
Product Type Material Labor Mark Up Price
Fixed Variable Total Cost
100 ml 11.46 0.33 0.17 0.229 12.19 49% ₱18.00
200ml 13.46 0.88 0.03 1.53536025 15.91 42% ₱20.00
350ml 34.46 2.46 0.004 11.1699498 48.09 35% ₱50.00

2021
Overhead
Product Type Material Labor Mark Up Price
Fixed Variable Total Cost
100 ml 11.46 0.33 0.17 0.290 12.25 49% ₱18.00
200ml 13.46 0.88 0.03 1.94407981 16.32 41% ₱20.00
350ml 34.46 2.46 0.004 10.8243725 47.75 35% ₱50.00

2022
Overhead
Product Type Material Labor Mark Up Price
Fixed Variable Total Cost
100 ml 11.46 0.33 0.17 0.14454813 12.10 50% ₱18.00
200ml 13.46 0.88 0.03 0.97049795 15.34 43% ₱20.00
350ml 34.46 2.46 0.004 5.40464533 42.33 39% ₱50.00

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2023
Overhead
Product Type Material Labor Mark Up Price
Fixed Variable Total Cost
100 ml 11.46 0.33 0.17 0.14431888 12.10 50% ₱18.00
200ml 13.46 0.88 0.03 0.99804129 15.37 43% ₱20.00
350ml 34.46 2.46 0.004 5.72306258 42.65 39% ₱50.00

2024
Overhead
Product Type Material Labor Mark Up Price
Fixed Variable Total Cost
100 ml 11.46 0.33 0.17 0.14406783 12.10 50% ₱18.00
200ml 13.46 0.88 0.03 0.96733107 15.34 43% ₱20.00
350ml 34.46 2.46 0.004 5.38715467 42.31 39% ₱50.00

2025
Overhead
Product Type Material Labor Mark Up Price
Fixed Variable Total Cost
100 ml 11.46 0.33 0.17 0.14379961 12.10 50% ₱18.00
200ml 13.46 0.88 0.03 0.96553765 15.34 43% ₱20.00
350ml 34.46 2.46 0.004 5.37529391 42.30 39% ₱50.00

2026
Overhead
Product Type Material Labor Mark Up Price
Fixed Variable Total Cost
100 ml 11.46 0.33 0.17 0.14350866 12.10 50% ₱18.00
200ml 13.46 0.88 0.03 0.96356129 15.34 43% ₱20.00
350ml 34.46 2.46 0.004 5.36412596 42.29 39% ₱50.00

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2027
Overhead
Product Type Material Labor Mark Up Price
Fixed Variable Total Cost
100 ml 11.46 0.33 0.17 0.14318886 12.10 50% ₱18.00
200ml 13.46 0.88 0.03 0.96137752 15.33 43% ₱20.00
350ml 34.46 2.46 0.004 5.35374807 42.28 39% ₱50.00

2028
Overhead
Product Type Material Labor Mark Up Price
Fixed Variable Total Cost
100 ml 11.46 0.33 0.17 0.14285969 12.10 50% ₱18.00
200ml 13.46 0.88 0.03 0.95917438 15.33 43% ₱20.00
350ml 34.46 2.46 0.004 5.33996721 42.26 39% ₱50.00

2029
Overhead
Product Type Material Labor Mark Up Price
Fixed Variable Total Cost
100 ml 11.46 0.33 0.17 0.14250436 12.10 50% ₱18.00
200ml 13.46 0.88 0.03 0.95685042 15.33 43% ₱20.00
350ml 34.46 2.46 0.004 5.32741963 42.25 39% ₱50.00

Table 39. Selling Price

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Sales forecast was obtained by multiplying the selling price to the yearly production output. The yearly production output is

based on the captured demand.

Sales Forecast
Sales
Yearly Production Output
Year 100ml 200ml 350 ml w/spices Total Sales
100 ml 200 ml 350 ml ₱18.00 ₱20.00 ₱50.00
2019 2029127.982 302210.55 54275 ₱36,524,303.67 ₱6,044,211.01 ₱2,713,727.39 ₱45,282,242.07
2020 2092376.758 311630.581 55966 ₱37,662,781.65 ₱6,232,611.62 ₱2,798,315.42 ₱46,693,708.69
2021 2157918.043 321392.049 57719 ₱38,842,524.77 ₱6,427,840.98 ₱2,885,969.42 ₱48,156,335.17
2022 11129219.11 1657543.27 297681 ₱200,325,944.04 ₱33,150,865.44 ₱14,884,062.04 ₱248,360,871.52
2023 11481302.29 1709981.19 307099 ₱206,663,441.28 ₱34,199,623.85 ₱15,354,933.16 ₱256,217,998.30
2024 11846299.69 1764342.51 316862 ₱213,233,394.50 ₱35,286,850.15 ₱15,843,075.58 ₱264,363,320.23
2025 24449457.49 3641408.56 653967 ₱440,090,234.86 ₱72,828,171.25 ₱32,698,362.60 ₱545,616,768.72
2026 25234271.25 3758295.72 674959 ₱454,216,882.57 ₱75,165,914.37 ₱33,747,961.56 ₱563,130,758.50
2027 26048176.15 3879515.6 696729 ₱468,867,170.64 ₱77,590,311.93 ₱34,836,466.58 ₱581,293,949.15
2028 26892343.58 4005242.66 719309 ₱484,062,184.40 ₱80,104,853.21 ₱35,965,444.30 ₱600,132,481.91
2029 27768009.63 4135661.01 742731 ₱499,824,173.39 ₱82,713,220.18 ₱37,136,547.84 ₱619,673,941.42
Table 40. Sales Forecast

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ACCOUNTS RECEIVABLE

The accounts receivable per year only consists of the one-month receivable for December. This is primarily because clients

are given a 30-day credit term. This means that a transaction made within the current month would be paid off the following month.

The effect of this would credit the transaction made for December to the following month (January of the succeeding year).

Accounts Receivable
Accounts
Year Sales Returns and Allowances Net Credit Sales AR Unadjusted Bad Debts Allowances Receivable
2019 ₱45,282,242.07 -₱1,358,467.26 ₱43,923,774.81 ₱4,392,377.48 ₱219,618.87 ₱4,172,758.61
2020 ₱46,693,708.69 -₱1,400,811.26 ₱45,292,897.43 ₱4,529,289.74 ₱226,464.49 ₱4,302,825.26
2021 ₱48,156,335.17 -₱1,444,690.06 ₱46,711,645.11 ₱4,671,164.51 ₱233,558.23 ₱4,437,606.29
2022 ₱248,360,871.52 -₱7,450,826.15 ₱240,910,045.37 ₱24,091,004.54 ₱1,204,550.23 ₱22,886,454.31
2023 ₱256,217,998.30 -₱7,686,539.95 ₱248,531,458.35 ₱24,853,145.83 ₱1,242,657.29 ₱23,610,488.54
2024 ₱264,363,320.23 -₱7,930,899.61 ₱256,432,420.62 ₱25,643,242.06 ₱1,282,162.10 ₱24,361,079.96
2025 ₱545,616,768.72 -₱16,368,503.06 ₱529,248,265.66 ₱52,924,826.57 ₱2,646,241.33 ₱50,278,585.24
2026 ₱563,130,758.50 -₱16,893,922.75 ₱546,236,835.74 ₱54,623,683.57 ₱2,731,184.18 ₱51,892,499.40
2027 ₱581,293,949.15 -₱17,438,818.47 ₱563,855,130.67 ₱56,385,513.07 ₱2,819,275.65 ₱53,566,237.41
2028 ₱600,132,481.91 -₱18,003,974.46 ₱582,128,507.46 ₱58,212,850.75 ₱2,910,642.54 ₱55,302,208.21
2029 ₱619,673,941.42 -₱18,590,218.24 ₱601,083,723.17 ₱60,108,372.32 ₱3,005,418.62 ₱57,102,953.70
Table 41. Accounts Receivable

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Bad debts happen when products/ finished goods get damaged while being in

the custody of the client. The company allocates 0.5% of the total sales to bad debts

allowances.

DIVIDEND POLICY/PROFIT SHARING

The proponents decided to use the stable dividend policy because, in this policy,

the company follows the procedure to pay out a fixed percentage of profits to the

shareholders as dividends every year. The company sets the payout rate at 30%,

meaning the proponents will withdraw 30% of their calculated net income and

distributes it equally to the shareholders since they invested the same amount. The

withdrawal will begin in the year 2021, up to the following years. The rest of the net

income will be used in investing for a new product soon for the money to circulate and

grow and also for the company’s other expenses and future expansion.

PRE-OPERATING EXPENSE

The table shows the total startup costs incurred by the business before the

operation takes place, which is the sum of the value of the fixed assets and the pre-

operating expenses needed by the company.

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Table 42. Pre-operating Expenses

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OPERATING EXPENSES

Year
Operating Expenses 2019 2020 2021
Total Total Total
Pre-operating Costs ₱299,700.00
Wages and Salaries 6,568,056.00 6,679,224.00 6,679,224.00
13th Month Pay 547,338.00 556,602.00 556,602.00
Employee Benefits
SSS Contrribution 1,198,051.80 1,222,508.76 1,246,965.72
Pag-ibig Contribution 269,014.02 275,128.26 281,242.50
PhilHealth Contribution 207,264.24 211,710.96 216,157.68
1,674,330.06 1,709,347.98 1,744,365.90
Communication Expenses 4,900.00 4,900.00 4,900.00
Advertising and Marketing Expenses 80,000.00 35,000.00 35,000.00 35,000.00 35,000.00
General and Administrative Expenses
Utilities Expenses 2,257,237.49 2,331,049.15 3,044,350.19
Licences and Permit Expenses 6,000.00 6,000.00
Depriciation Expences 248,711.13 104,071.13 104,071.13
Office Supplies 24,000.00 24,000.00 24,000.00
2,529,948.62 2,465,120.29 3,178,421.33
TOTAL OPERATING EXPENSES ₱11,704,272.68 ₱11,450,194 ₱12,198,513

Table 43. OPERATING EXPENSES (2019-2021)

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Year
2022 2023 2024 2025
Total Total Total Total

11,998,409.54 12,241,149.67 12,371,857.19 19,488,094.69

999,867.46 1,020,095.81 1,030,988.10 1,624,007.89

1,943,989.08 1,992,903.00 2,041,816.92 2,078,502.36

455,498.34 467,726.82 479,955.30 489,126.66
342,889.20 351,782.64 360,676.08 367,346.16
2,742,376.62 2,812,412.46 2,882,448.30 2,934,975.18
4,900.00 4,900.00 4,900.00 4,900.00
35,000.00 35,000.00 35,000.00 35,000.00 35,000.00 50,000.00

3,135,680.70 3,229,751.12 3,326,643.66 3,426,442.97

6,000.00 6,000.00 6,000.00 6,000.00
104,071.13 104,071.13 104,071.13 104,071.13
24,000.00 24,000.00 24,000.00 24,000.00
3,269,751.83 3,363,822.26 3,460,714.79 3,560,514.10
₱19,050,305 ₱19,477,380.19 ₱19,800,908 ₱27,612,492

Table 44. OPERATING EXPENSES (2022-2025)

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Year
2026 2027 2028 2029
Total Total Total Total

20,348,259.03 20,886,199.93 21,444,831.13 21,970,391.05

1,695,688.25 1,740,516.66 1,787,069.26 1,830,865.92

2,127,416.28 2,188,558.68 2,237,472.60 2,286,386.52

501,355.14 516,640.74 528,869.22 541,097.70
376,239.60 387,356.40 396,249.84 405,143.28
3,005,011.02 3,092,555.82 3,162,591.66 3,232,627.50
4,900.00 4,900.00 4,900.00 4,900.00

3,529,236.25 3,635,113.34 3,744,166.74 3,856,491.74

6,000.00 6,000.00 6,000.00 6,000.00
104,071.13 104,071.13 104,071.13 104,071.13
24,000.00 24,000.00 24,000.00 24,000.00
3,663,307.39 3,769,184.48 3,878,237.88 3,990,562.88
₱28,717,166 ₱29,493,357 ₱30,277,630 ₱31,029,347

Table 45. OPERATING EXPENSES (2026-2029)

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FIXED ASSETS

A fixed asset is an item with a useful life higher than one reporting period, and

which exceeds an entity's minimum capitalization limit. A fixed asset is not purchased

with the intent of immediate resale, but rather for productive use within the object. An

inventory item cannot be considered a fixed asset since it is purchased with the intent of

either reselling it directly or incorporating it into a product that is then sold.

Table 46. Fixed Assets

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TOTAL PROJECT COST

Four areas were considered for the project cost: fixed assets, pre-operating

expenses, operating expenses, and working capital requirements.

FIXED ASSESTS
Manufacturing Equipment ₱2,317,500.00
Furniture and Fixtures ₱317,300.00
Security Equipment ₱109,864.00
Personal Protective and Auxiliary
Equipment ₱68,304.00
Land ₱48,960,000.00
Building ₱10,729,926.76

Operating Expenses
Wages and Salaries ₱6,568,056.00
13th Month Pay ₱547,338
Employee Benefits ₱1,674,330.06
Communication Expenses ₱4,900.00
Advertising and Marketing Expenses ₱200,000.00
General and Administrative Expenses ₱2,391,308.62
Working Capital ₱102,700.00
TOTAL PROJECT COST ₱73,991,527.44

Table 46. Total Project Cost

FINANCIAL STATEMENTS

Income Statement

The income statement keeps track of the financial performance of the company for each

business year. It reflects how the company incurs its expenses and revenues. It also

shows if whether or not the company could make a profit or not (loss) over a period.

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Since it was stated that the company would have a business year consisting of 12 months (January to December), the income

statement would be shown a yearly period from 2019 to 2029.

Table 47. Cost of Goods Sold 2019-2023

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Table 48. Cost of Goods Sold 2025-2029

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Table 49. Income Statement 2019-2023

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Table 50. Income Statement 2024-2029

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Statement of Cash flow

Table 51. Cash Flow 2019-2023

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Table 52. Cash Flow 2024-2029

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Statement of Financial Position/ Balance Sheet

The balance sheet lets the company know its summary of assets they own, their

liabilities, and their total equity. This gives the company a picture of their financial

position or the idea of what they have and owe.

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Table 53. Balance Sheet

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FINANCIAL ANALYSIS

Financial Ratios

Liquidity Ratio

Current Ratio

The current ratio shows the ability of the company to settle the short term

liabilities with its existing assets.

Current Ratio = Tot. CA/ Tot. CL

Year Total Current Asset Total Current Liabilities Current Ratio
2019 ₱28,564,091.67 ₱11,139,421.81 3
2020 ₱25,379,938.82 ₱9,082,254.12 3
2021 ₱9,498,756.41 ₱30,462,297.38 0
2022 ₱52,952,157.82 ₱45,999,083.03 1
2023 ₱71,606,529.70 ₱36,535,238.56 2
2024 ₱92,060,184.95 ₱36,777,510.85 3
2025 ₱223,857,432.96 ₱57,901,421.87 4
2026 ₱329,060,046.36 ₱24,769,287.59 13
2027 ₱438,129,294.21 ₱25,446,152.18 17
2028 ₱550,992,674.89 ₱26,148,214.08 21
2029 ₱667,904,337.50 ₱26,821,888.41 25
Table 54. Current Ratio

The ratio shows that with the company's current liabilities is lesser than its total

current assets which. It is also above the industry standard of 2.0. This shows that the

company has little exposure to liabilities because liability is composed only of expenses

incurred and accrued every December of every year. Higher than the industry standard

of 2.0 in current ratios also mean that the company may have large amounts of asset

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that are not being utilized or distributed properly; this could recommend the

management to invest assets to other ventures.

Acid-Test Ratio

This ratio is also a liquidity indicator like the current ratio but it is a more

conservative method.

Acid-Test Ratio = (Cash +AR)/ Tot. Liabilities

Year Cash AR Total Liabilities Acid-Test Ratio
2019 ₱24,273,614.46 ₱4,172,758.61 ₱11,139,421.81 2.55
2020 ₱20,957,542.29 ₱4,302,825.26 ₱9,082,254.12 2.78
2021 -₱4,747,884.07 ₱4,437,606.29 ₱30,462,297.38 -0.01
2022 ₱951,288.10 ₱22,886,454.31 ₱45,999,083.03 0.52
2023 ₱17,855,655.07 ₱23,610,488.54 ₱36,535,238.56 1.13
2024 ₱36,409,123.78 ₱24,361,079.96 ₱36,777,510.85 1.65
2025 ₱100,898,435.14 ₱50,278,585.24 ₱57,901,421.87 2.61
2026 ₱202,303,959.97 ₱51,892,499.40 ₱24,769,287.59 10.26
2027 ₱307,196,287.75 ₱53,566,237.41 ₱25,446,152.18 14.18
2028 ₱415,716,358.17 ₱55,302,208.21 ₱26,148,214.08 18.01
2029 ₱528,088,407.38 ₱57,102,953.70 ₱26,821,888.41 21.82
Table 55. Acid-Test Ratio

The ratio shows the same interpretation as with the current assets above and

also a trend above the industry standard because of underutilized assets. The acid ratios

show the ability of the company to pay off its liabilities using cash and without

depending on its inventory.

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Leverage Ratios

Debt Ratio

Debt ratios are used to evaluate the company's liabilities in comparison to its

current assets. It is also used to evaluate how much of the company's assets are being

shouldered by its liabilities.

Debt Ratio = Tot. Liabilities/ Tot. Assets

Year Total Liabilities Total Assets Debt Ratio
2019 ₱11,139,421.81 ₱90,818,275.30 0.12
2020 ₱9,082,254.12 ₱25,379,938.82 0.36
2021 ₱30,462,297.38 ₱9,498,756.41 3.21
2022 ₱45,999,083.03 ₱52,952,157.82 0.87
2023 ₱36,535,238.56 ₱71,606,529.70 0.51
2024 ₱36,777,510.85 ₱92,060,184.95 0.40
2025 ₱57,901,421.87 ₱223,857,432.96 0.26
2026 ₱24,769,287.59 ₱329,060,046.36 0.08
2027 ₱25,446,152.18 ₱438,129,294.21 0.06
2028 ₱26,148,214.08 ₱550,992,674.89 0.05
2029 ₱26,821,888.41 ₱667,904,337.50 0.04
Table 56. Debt Ratio

It can be seen that the company's ratio is decreasing and approaching zero. This

means that the company's liabilities are being paid off per year and that its assets are

not highly dependent on debt. Loan dependency of the company's total assets is seen to

decrease gradually per year from 2% to 0% throughout its life cycle.

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Debt-Equity Ratio

Debt ratios are used to evaluate the company's liabilities in comparison to its

equity or owner's capital. It estimates how many portions of the business are financed

by liabilities.

Debt-Equity Ratio
Year Total Liabilities Total Equity Debt-Equity Ratio
2019 ₱11,139,421.81 ₱79,678,853.49 0.14
2020 ₱9,082,254.12 ₱16,297,684.69 0.56
2021 ₱30,462,297.38 -₱20,963,540.97 -1.45
2022 ₱45,999,083.03 ₱6,953,074.79 6.62
2023 ₱36,535,238.56 ₱35,071,291.15 1.04
2024 ₱36,777,510.85 ₱55,282,674.10 0.67
2025 ₱57,901,421.87 ₱165,956,011.09 0.35
2026 ₱24,769,287.59 ₱304,290,758.77 0.08
2027 ₱25,446,152.18 ₱412,683,142.03 0.06
2028 ₱26,148,214.08 ₱524,844,460.82 0.05
2029 ₱26,821,888.41 ₱641,082,449.08 0.04
Table 57. Debt-Equity Ratio

As seen in the ratios given above, the company's total equity is much higher than its

liabilities. This means that the company's owner or management does not depend on bank loans

to run and sustain the business. Loan dependency of the company's total equity is seen to

decrease gradually per year from 2% to 0% throughout its life cycle.

Efficiency Ratios

Accounts Receivable Turnover Ratio

Accounts receivable turnover ratio measures how many times a business can

turn its accounts receivable into cash during a period. In other words, the accounts

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receivable turnover ratio measures how many times a company can collect its average

accounts receivable during the year.

Accounts Receivable Turnover Ratio =NCS/AR

Year Net Credit Sales Accounts Receivable AR Turnover Ratio
2019 ₱43,923,774.81 ₱4,172,758.61 11
2020 ₱45,292,897.43 ₱4,302,825.26 11
2021 ₱46,711,645.11 ₱4,437,606.29 11
2022 ₱240,910,045.37 ₱22,886,454.31 11
2023 ₱248,531,458.35 ₱23,610,488.54 11
2024 ₱256,432,420.62 ₱24,361,079.96 11
2025 ₱529,248,265.66 ₱50,278,585.24 11
2026 ₱546,236,835.74 ₱51,892,499.40 11
2027 ₱563,855,130.67 ₱53,566,237.41 11
2028 ₱582,128,507.46 ₱55,302,208.21 11
2029 ₱601,083,723.17 ₱57,102,953.70 11
Table 58. Accounts Receivable Turnover Ratio

As stated above, the ratio indicates how many times a year can the company's

accounts receivable be converted to cash.

Operating Expense Ratio

The operating expense ratios are essential in measuring the cost of operating the

company against the income it generates. It also ties into the ability of a company to

meet both its short term and long term obligations.

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Operating Expense Ratio = TE/NI

Year Total Expenses Net Income Operating Expense Ratio
2019 ₱11,303,160.22 ₱1,047,923.03 10.79
2020 ₱11,501,532.47 ₱1,334,216.83 8.62
2021 ₱12,268,186.95 ₱548,313.80 22.37
2022 ₱20,101,576.83 ₱82,396,435.95 0.24
2023 ₱20,579,447.74 ₱85,315,417.06 0.24
2024 ₱20,950,570.55 ₱88,587,385.25 0.24
2025 ₱29,511,574.56 ₱206,491,213.49 0.14
2026 ₱30,655,251.36 ₱212,710,269.84 0.14
2027 ₱31,512,840.20 ₱219,843,286.38 0.14
2028 ₱32,370,495.67 ₱227,273,533.81 0.14
2029 ₱33,216,991.33 ₱235,078,927.44 0.14
Table 59. Operating Expense Ratio

Profitability Ratios

Profit Margin

The profit margin allows the management to see how costs within the company

are being managed.

Profit Margin = NI/NS

Year Net Income Net Sales Profit Margin
2019 ₱1,047,923.03 ₱43,923,774.81 0.02
2020 ₱1,334,216.83 ₱45,292,897.43 0.03
2021 ₱548,313.80 ₱46,711,645.11 0.01
2022 ₱82,396,435.95 ₱240,910,045.37 0.34
2023 ₱85,315,417.06 ₱248,531,458.35 0.34
2024 ₱88,587,385.25 ₱256,432,420.62 0.35
2025 ₱206,491,213.49 ₱529,248,265.66 0.39
2026 ₱212,710,269.84 ₱546,236,835.74 0.39
2027 ₱219,843,286.38 ₱563,855,130.67 0.39
2028 ₱227,273,533.81 ₱582,128,507.46 0.39
2029 ₱235,078,927.44 ₱601,083,723.17 0.39
Table 60. Profit Margin

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The table above shows how much the company earns for each sale. It is a quantitative

approach to looking at the company's net income earned per sales generated. It can also be

interpreted as the percentage of sales left over after all expenses are paid.

Break-even Point Analysis

Breakeven is calculated using the formula:

𝐹𝑖𝑥𝑒𝑑 𝐶𝑜𝑠𝑡𝑠
Breakeven Point =
𝑆𝑒𝑙𝑙𝑖𝑛𝑔 −𝑉𝑎𝑟𝑖𝑎𝑏𝑙𝑒 𝐶𝑜𝑠𝑡𝑠/𝑢𝑛𝑖𝑡

Business Year
100 ml
2019
Fixed Cost ₱57,817,218.00
Variable Cost ₱2,316,037.49
Production Capacity 2029127.982
Variable Cost/unit ₱1.14
Selling Price ₱18.00
Breakeven Point 3,429,537.59
Table 61. Break-even Point (100ml)

Business Year
200 ml
2019
Fixed Cost ₱57,817,218.00
Variable Cost ₱495,787.84
Production Capacity 302210.5505
Variable Cost/unit ₱1.64
Selling Price ₱20.00
Breakeven Point 3,149,178.20
Table 62. Break-even Point (200ml)

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Business Year
350 ml
2019
Fixed Cost ₱57,817,218.00
Variable Cost ₱155,819.04
Production Capacity 54274.54784
Variable Cost/unit ₱2.87
Selling Price ₱50.00
Breakeven Point 1,226,784.91
Table 63. Break-even Point (350ml)

Breakeven entails the number of bottles the company has to sell to incur no

income loss. The table above shows the projected number of bottles the company has

to sell.

Payback Period

Payback Period

The payback period is the length of time required to recover the cost of an

investment.

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PAYBACK PERIOD
2019 2020 2021 2022 2023
Net Cash Flow ₱24,273,614.46 ₱3,316,072.18 ₱25,705,426.35 ₱5,699,172.16 ₱16,904,366.97
Cumulative Cash Flow ₱24,273,614.46 ₱27,589,686.64 ₱53,295,112.99 ₱58,994,285.16 ₱75,898,652.13
Table 64. Payback Period (2019-2023)

PAYBACK PERIOD
2024 2025 2026 2027 2028 2029
₱18,553,468.72 ₱64,489,311.35 ₱101,405,524.83 ₱104,892,327.78 ₱108,520,070.42 ₱112,372,049.21
₱94,452,120.84 ₱158,941,432.20 ₱260,346,957.02 ₱365,239,284.81 ₱473,759,355.22 ₱586,131,404.44
Table 65. Payback Period (2014-2029)

The payback period was calculated by dividing the cumulated cash flow of 2020 by the cash flow of the year 2019. The

payback period is 3.12 years.

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The Ratio of Return Investment Analysis

The rate of return of investment calculates the profits of a venture as a percentage of the original cost. The use of this is to

measure the benefits of the investment.

ROI
2019 2020 2021 2022 2023
Net Income ₱55,444,183.56 ₱84,235,500.63 ₱85,776,044.25 ₱191,936,255.65 ₱198,161,519.13
Total Assets 167044329.7 200183468.4 249840461.4 370930356.3 450140376.7
ROI 33% 42% 34% 52% 44%
Table 66. Ratio of Return Investment (2019-2023)

ROI
2024 2025 2026 2027 2028 2029
₱204,633,476.99 ₱211,645,025.72 ₱218,692,611.51 ₱225,797,502.32 ₱233,455,845.30 ₱241,418,412.82
532678494.7 619004250.1 729560756.1 843660704.3 961838904.4 1084177674
38% 34% 30% 27% 24% 22%
Table 66. Ratio of Return Investment (2019-2023)

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Sensitivity Analysis

The objective of sensitivity analysis is to determine the percentage increase of

bottles to produce that the company can tolerate without incurring any loss during the

first year of operation. If the output will decrease greater than the given tolerance

percentage, the company’s income will become negative.

If output will decrease by 2%

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SOCIO-ECONOMIC
ASPECT

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CHAPTER 5

SOCIO-ECONOMIC ASPECT

Socio-Economic & Environmental Goals

The success of a business is not only measured by its profitability but also by how

their economic activities affect society. Wherein in this part, it talks about the summary

and findings, the impact of the study, the economy, government, market, supplier and

customers benefits, and other information that can help in determining the feasibility of

socio-economic.

The business cannot operate without any involvement from the public. It pays

taxes; it renders products and services, buys materials, and employs people and others.

They also get permits for any branch of the government.

This feasibility study aims to shape its future in unison with the community,

changing the way of life of the public and the landscape of the vinegar industry

together.

The following are the social and economic benefits that Musa Acuminata Vinegar

strives to deliver:

Government

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Our project will benefit the government about tax matters. This means that the

government would generate more funds. The additional fund may help the government

on assisting their on-going projects or for creating new ones through which the people’s

welfare will be given more emphasis.

JEMS Manufacturing Inc. has the responsibility to pay taxes to the government

as stated in Republic Act No. 8424, an act amending the national internal revenue code,

as amended, and for other purposes. Bureau of Internal Revenue (BIR) for public

information purposes showing transparency and accountability.

Environment

Environmental is the total of all surroundings of a living organism, including

natural forces and other living things, which provide conditions for development and

growth as well as of danger and damage. The environmental impact of vinegar does not

have any severe effects on the environment, but there is just one minor way in which it

can have a negative impact. When vinegar comes in contact with some plants, it can

inhibit their ability to absorb nutrients and water causing them to die. Aside from this,

vinegar does not have any negative effects and does not produce any pollutants that are

released into the environment. `

In terms of being "environmentally friendly", vinegar is the much better choice.

There are multiple severe ways that bleach can affect the environment and no severe

ways that vinegar can do so.

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 SOCIO-ECONOMIC ASPECT

Economic

The company will benefit the economy in terms of implementing waste

segregation at the source to facilitate waste recovery because it will be reused again by

recycling the bottles. The business (new entrants to the business industry) will lessen

the cost of waste disposal in landfills. The demand for the junk shop means a greater

need for every company because their trash will not be waste anymore, but it will

become money as soon as the transaction occurs. If given a chance, this business will

also promote a refillable product to reduce the usage of bottles. With this business in

the market or industry, the awareness of people will increase regarding how significant

the impact of waste is.

Workers & Customers

The business will be acceptable in the market and may also have a big chance to

survive because the product rendered is cheap and high quality when compared to that

of a competitor’s product makes. The business can employ those unemployed persons,

which means the company can contribute a significant impact on the economy. The

industry can also help the customers by providing cheaper and healthier products

compared to those of the competitors.

Suppliers

Suppliers will also be benefited as a result of the realization of the proposed

business since they are responsible for making it and distributing it to the market upon

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making it to the available stores in market for the effective operation of the company.

The right suppliers provide the most suitable goods or services at the most suitable

prices and at the right time frames for your specific business needs.

There are specific vital factors for choosing suppliers.

• Price - If you are in a new business, a key consideration for choosing

suppliers is affordability. If you are focused on managing your finances, competitively

priced suppliers are an attractive option.

• Reliability - Large suppliers are generally reliable because they have

enough resources and systems in place to make sure they can still deliver if anything

goes wrong. However, you can often develop a closer relationship with small suppliers -

especially if you are their primary customer.

• Stability - Stability is essential, especially if you are entering into a long-

term contract with a supplier, or they are the only supplier of a particular item you need

for your business.

• Location - Think about situation when choosing suppliers. Dealing with

distant suppliers might mean longer delivery times and extra freight costs. If you need

something quickly, a local supplier might be a better option.

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SUMMARY, FINDINGS
AND
RECOMMENDATIONS

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CHAPTER 6

SUMMARY, FINDINGS, AND RECOMMENDATIONS

Musa Acuminata is a proposed vinegar that is made up of purely fermented

banana flesh. Banana contains a high level of sugar and a watery kind of fruit, which will

help produce more alcohol that will soon be converted into acetic acid during

fermentation.

After conducting the project feasibility on the analysis and computations that are

related to the study, the following objectives are accomplished:

1. To design a business model that would show the following key elements of the

business: customer segments, value proposition, channels, customer

relationships, key resources, key activities, key partners, revenue streams and

the cost structure;

2. To determine the microenvironment of the company: suppliers, marketing

intermediaries, customers, competitive position, competitors, and the public;

3. To establish a market analysis that would know the target market through

segmentation basis;

4. To produce a quantitative and qualitative analysis of the market demand;

5. To conceptualize the management aspect of the business during the pre-

implementation stage and the actual operations of the company;

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6. To determine the requirements on the legal aspect of the market and the

registration process for DTI, DOLE, BIR, SSS, PhilHealth, PAG-IBIG, FDA, Public,

and Private Insurance Companies and Other Barangay and City Permits and

Licenses and the different types and amount of taxes to be imposed on the

business;

7. To present the financing aspect of the company like the initial capitalization, pre-

operating expenses, operating expenses and its sources of initial capitalization as

well as the financial aspect of the business like projected income statement,

projected balance sheets, projected statement of cash flows and its financial

performance; and

8. To evaluate the impact of the business on its socio-economic and environmental

desirability aspect, the impact assessment, and its cost-benefit analysis.

To accomplish the project feasibility study of Musa Acuminata Vinegar, the

researchers had undergone the flow of research, which starts at data collection followed

by the data presentation, data analysis, and interpretation. Research instruments such

as interviews, questionnaires, document analysis, and focus group discussions were

used to collect data. Company profile, marketing mix, life cycle strategies, market study,

and technical study, which involves the product cycle, inventory management,

management aspect, financial aspect, and socio-economic goals, were gathered through

document analysis, focus group discussion and interviews. Survey questionnaires were

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used to gather the target market’s preferences concerning the features, functions, and

prices. After collecting the data, the researchers were able to attain the data to be used

as inputs that were used in the process stage, which is comprised of the data

presentation, data analysis, and interpretation. It involved the generation of the

business model canvas, organizational chart, office and workstation layout, IPO

framework, and flow charts. In data analysis and interpretation, the data gathered from

the survey were studied to establish market share estimation, sales projection,

reordering point, financial performances, plant layout and location, work environment,

product price, computation of expenses, product cost, financing, and socio-economic

aspect. Overall, the market study of Musa Acuminata Vinegar was accomplished,

achieving the outputs for the research which established the business’ Company Profile

and its Marketing Aspect, Technical Aspect, Management, Financing, and Financial

Aspect and Socio-economic Aspect.

1. Marketing Aspect

When marketing products, it involves the identification, choice, and

development of a product, the determination of its price, the selection of a

distribution channel to reach the customer's place, and the development and

implementation of a promotional strategy which will be tackled in the

following section of the study.

2. Technical Aspect

In computing, the number of the workforce needed, working days and hours

are considered, which is derived from the computed annual demand that is

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 SUMMARY, FINDINGS AND RECOMMENDATIONS

based on the market share of the company. Economic order quantity and

reordering points were also calculated to lessen or reduce the cost of

inventory.

3. Management Aspect

The researchers considered the business to be under the form of general

partnership as a form of organization or ownership. There will be 288

working days in a year, six days per week, except for the security guard. The

organization is composed of manager, head supervisor, assistant supervisor,

accounting consultant, production workers, and safety officers.

4. Financial Aspect

The initial capital or money used to start the business comes from the

investors and also from the alternative source of financing, which is the loan

from the bank, which will sum up to Php. 90,000,000.00. Amortization or

paying off of debt with a fixed payment is expected to be zero balance after

five years. The income statement, statement of cash flow, balance sheet, and

ratios was computed to monitor the state of the business.

5. Socio-economic Aspect

The business has decisions that influence employees, customers, suppliers,

and competitors, while company operations affect communities,

governments, and the environment. The researchers evaluated the social,

ethical, environmental, and economic impact of these decisions and

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 SUMMARY, FINDINGS AND RECOMMENDATIONS

activities, considering that society expect business and commerce to be

conducted responsibly and not to do severe damage.

Customer satisfaction should be the priority of the business. Improvement of the

current features being offered by Musa Acuminata Vinegar should be considered to gain

customer satisfaction, which could be a factor for the business to lead the market as

well as an advantage against the competitors. Not just with the technicality and features

of the proposed vinegar, the company should involve the voice of the customers, which

contains their views, opinions as well as suggestions, which may help in innovating the

product, especially in the declining stage of the product life cycle. Also, through

customer relationships, customer satisfaction would rise. Thus, the company should

think about other strategies that may upsurge the market’s fulfillment. Overall, the

company should retain as well as strengthen its critical success factors, core values,

goals, and objectives, continuing the company’s vision and mission. For the marketing

aspect, the company should consider increasing and upgrading its promotions, and

feature pricing should be evaluated. Assessment through business evaluations and

gaining customer suggestions, opinions, and ratings should be achieved by the company

to know its strengths and weaknesses. For the product aspect, the company should be

able to improve the proposed product as well as to maintain the product’s uniqueness

in the market. The company should be able to escape from the risks of the competitors

through continuous improvement and product differentiation, which is the company’s

strategic approach.

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 BIBLIOGRAPHY

BIBLIOGRAPHY

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 BIBLIOGRAPHY

BIBLIOGRAPHY
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Unpublished Thesis:

[1] E. CAB, C. MANGUBAT, A. K. ROMEO, PRODUCTION AND DISTRIBUTION OF

BANANA JAM IN CEBU CITY

[2] J. CABAJAR, L. J. CASQUEJO, M. T. COLON, A. EYAC, K. LASPOÑA, PROPOSED

BABY HEALTH PROCTORING BUSINESS THROUGH BABY NURTURE MOBILE

APPLICATION

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APPENDICES

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APPENDIX A. Population Growth Rate from 2019 – 2029

The household growth rate was computed using this formula:

Household Population = ((CChhpop*(1+GR))+((MChhpop*(1+GR))+((LChhpop*(1+GR))

Cebu City HGR (CC) = 1.87%

Mandaue City HGR (MC) = 4.61%

Lapu-lapu City HGR (LC) = 4.12%

Year Forecasted Population

2019 457834
2020 472105
2021 486895
2022 502222
2023 518110
2024 534581
2025 551659
2026 569366
2027 587731
2028 606778
2029 626536

http://rsso07.psa.gov.ph/cebu

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APPENDIX B. Survey Questionnaire

University of Cebu - Main Campus

Sanciangko St., Cebu City, Philippines

Industrial Engineering Department

To the respondents:

We, 5th year Industrial Engineering students from University of Cebu Main

Campus, would like to conduct a research in line with our IE 52-Feasibility Study Course.

Please help us grow by sharing your insights. This is for educational purpose only and

not for any commercial purposes. Your response in this regard will help us complete this

research in efficient way. We will assure you that the data gathered is held with utmost

confidentiality.

“The information herein shall be treated with utmost confidentiality and shall be

for scholastic purposes only. No information herein shall be given out or used (other

than the indicated purpose) without my written consent and permission pursuant to the

data privacy act of 2012 (R.A no. 10173) and its implementing rules and regulations, as

well as the pertinent circulars of the national privacy commission”

We highly appreciate your cooperation. Thank you.

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 APPENDICES

Name (optional): Age (optional):

Address:

Please put a checkmark on the box/boxes provided that corresponds to your answer.

1. Do you use vinegar?

☐ Yes ☐ No

If no, don’t proceed in answering the rest of the questions.

2. What type of vinegar do you use?

☐Coconut ☐Apple

☐Sugar cane Others please specify:

3. Of what specific amount of vinegar do you usually consume in a week?

☐ 100 ml ☐ 350 ml

☐ 200 ml Others please specify:

4 Are you aware that some vinegars sold in the market were made of synthetic acetic

acid which made it fake and unsafe vinegars?

☐Yes ☐No

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5. If we will introduce a new version of vinegar in the market (banana vinegar), are you

interested to avail?

☐ Yes ☐ No

If no, don’t proceed in answering the rest of the questions.

6. If we will sell the banana vinegar using polyethylene terephthalate (PET) bottles,

among the following choices listed below, what volume of banana vinegar would you

prefer to buy weekly?

PET: is a form of polyester (just like the clothing fabric). It is extruded or molded into a

plastic bottles and containers for packaging foods and beverages, personal care

products, and many other consumers’ product.

☐100 ml ☐350 ml ☐1000 ml

☐200 ml ☐500 ml

7. What sourness of vinegar do you like?

☐not too sour ☐very sour

☐average sourness

8. If you like to add taste or something on your vinegar, what would it be? Please check

as many as you can.

☐Chilli Pepper ☐Onion ☐None

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☐Garlic ☐Ginger Others please specify:

9. Base on your answers on question number 6, 7 and 8, how much are you willing to

spend for this product?

☐10 php ☐40 php

☐20 php ☐50 php

☐30 php ☐60 php Others please specify:

10. Rate the following according to its importance, 1 being the highest and 6 being the

lowest.

Appearance Taste 1- Strongly important

2- Most Important
3- Important
4- Fairly important
Quality Acidity 5- Slightly important
6- Unimportant

Cost Health Benefits

Please leave any comments/recommendation/suggestions to improve our product and

research.

Thank you for your time and cooperation. God Bless!!!

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SURVEY RESULTS, SUMMARY AND CONCLUSION

Summary Result

1. Do you use vinegar?

Yes No

2.75%
Choices Frequency Percentage

Yes 389 97.25%

No 11 2.75%

Total 400 100.00%

97.25%

2. What type of vinegar do you use?

Frequency Coconut Sugarcane Apple

Choices Percentage
4.63%

Coconut 81 20.82%
20.82%

Sugarcane 290 74.55%

Apple 18 4.63%

74.55%

Total 389 100.00%

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3. Of what specific amount of vinegar do you usually consume in a week?

100 ml 200 ml 350 ml Others

Choices Frequency
Percentage

100 ml 203 52.19% 7.97%

11.31%
200 ml 111 28.53%

350 ml 44 11.31% 52.19%

28.53%
Others 31 7.97%

Total 389 100.00%

4. Are you aware that some vinegars sold in the market were made of synthetic
acetic acid which made it fake and unsafe vinegars?
Yes No

Choices Frequency Percentage

Yes 247 63.50%

36.50%
No 142 36.50%

Total 389 100.00%

63.50%

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5. If we will introduce a new version of vinegar in the market (banana vinegar), are
you interested to avail?
Yes No

Choices Frequency Percentage

11.57%

Yes 344 88.43%

No 45 11.57%

Total 389 100.00%

88.43%

6. If we will sell the banana vinegar using polyethylene terephthalate (PET) bottles,
among the following choices listed below, what volume of banana vinegar would
you prefer to buy weekly?

100 ml 200 ml 350 ml Others

Choices Frequency Percentage
4.94%
6.40%
100 ml 235 68.31%

200 ml 70
20.35%
20.35%
350 ml 22 6.40%

Others 17 4.94% 68.31%

Total 344 100.00%

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7. What sourness of vinegar do you like?

Not too sour Average Sourness Very Sour

Choices Frequency Percentage

Not too
73 21.22%
sour 14.53%
21.22%
Average
221 64.24%
Sourness

Very Sour 50 14.53%

Total 344 100.00%

64.24%

8. If you like to add taste or something on your vinegar, what would it be? Please
check as many as you can.

Chilli Pepper Garlic Onion

Choices Frequency Percentage
Ginger None Others
Chilli 3.45%
234 32.32%
Pepper 6.08%

Garlic 162 22.38%

Onion 135 18.65% 32.32%

17.13%

Ginger 124 17.13%

None 44 6.08% 18.65%

22.38%
Others 25 3.45%

Total 724 100.00%

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9. Base on your answers on question number 6, 7 and 8, how much are you willing
to spend for this product?

Choices Frequency Percentage 10 20 30 40 50 60 Others

10 142 41.28% 3.78% 2.91%

20 90 26.16%
7.85%
30 41 11.92%
6.10%
40 21 6.10% 41.28%

50 27 7.85% 11.92%

60 13 3.78%

Others 10 2.91%
26.16%
Total 344 100.00%

10. Rate the following according to its importance, 1 being the highest and 6 being
the lowest.
1st.
Appearance Quality Cost
Choices Frequency Percentage Taste Acidity health benefits

Appearance 106 30.81%

Quality 68 19.77%
16.86%
Cost 23 6.69% 2.91%
30.81%
Taste 79 22.97%

Acidity 10 2.91%
health 22.97%
58 16.86%
benefits
Total 344 100.00% 19.77%
6.69%

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 APPENDICES

2nd.

Choices Frequency Percentage Appearance Quality Cost

Taste Acidity health benefits
Appearance 37 10.76%

Quality 80 23.26%
8.14% 10.76%
Cost 100 29.07% 8.43%

Taste 70 20.35%
23.26%
Acidity 29 8.43% 20.35%
health
28 8.14%
benefits
Total 344 100.00%
29.07%

3rd.

Appearance Quality
Choices Frequency Percentage
Cost Taste
Appearance 43 12.50% Acidity health benefits

Quality 62 18.02%

Cost 66 19.19% 12.21% 12.50%

Taste 81 23.55% 14.53%

18.02%
Acidity 50 14.53%
health 23.55%
42 12.21% 19.19%
benefits
Total 344 100.00%

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4th.

Percentage Appearance Quality

Choices Frequency
Cost Taste
Appearance 39 11.34% Acidity health benefits

Quality 78 22.67%

Cost 55 15.99% 13.95% 11.34%

Taste 67 19.48%

Acidity 57 16.57% 16.57% 22.67%

health
48 13.95%
benefits
Total 344 100.00% 19.48%
15.99%

5th.

Choices Frequency Percentage Appearance Quality

Cost Taste
Appearance 54 15.70%
Acidity health benefits
Quality 38 11.05%

Cost 56 16.28%
15.70%
Taste 27 7.85% 22.38%

Acidity 92 26.74% 11.05%

health
77 22.38%
benefits
26.74% 16.28%
Total 344 100.00%

7.85%

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6th.

Choices Frequency Percentage

Appearance Quality
Cost Taste
Appearance 59 17.15%
Acidity health benefits
Quality 27 7.85%

Cost 44 12.79%
17.15%
Taste 25 7.27% 25.87%

Acidity 100 29.07% 7.85%

health
89 25.87%
benefits 12.79%
Total 344 100.00%
29.07%
7.27%

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 APPENDICES

APPENDIX C. Projected Demand of Existing Vinegar

Actual Demand for Existing Vinegar (L)

= Forecasted Household Population x Demand factor

𝐶𝑜𝑚𝑝𝑢𝑡𝑒𝑑 𝐷𝑒𝑚𝑎𝑛𝑑 𝑜𝑓 𝑒𝑥𝑖𝑠𝑡𝑖𝑛𝑔 𝑣𝑖𝑛𝑒𝑔𝑎𝑟 𝑏𝑎𝑠𝑒𝑑 𝑜𝑛 𝑠𝑢𝑟𝑣𝑒𝑦

Demand Factor =
𝐹𝑜𝑟𝑒𝑐𝑎𝑠𝑡𝑒𝑑 𝑃𝑜𝑝𝑢𝑙𝑎𝑡𝑖𝑜𝑛

Existing Vinegar
Actual
Forcasted Demand
Year Demand for
Population factor
Vinegar
2019 457834 7.53 3447491.00
2020 472105 7.53 3554949.91
2021 486895 7.53 3666318.38
2022 502221 7.53 3781728.08
2023 518110 7.53 3901367.32
2024 534581 7.53 4025393.15
2025 551658 7.53 4153986.02
2026 569366 7.53 4287326.40
2027 587730 7.53 4425610.65
2028 606777 7.53 4569034.95
2029 626535 7.53 4717811.41

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 APPENDICES

APPENDIX D. Projected Demand of Musa Acuminata Vinegar

Actual Demand for Musa Acuminata Vinegar (L)

= Forecasted Household Population x Demand factor

𝐶𝑜𝑚𝑝𝑢𝑡𝑒𝑑 𝐷𝑒𝑚𝑎𝑛𝑑 𝑜𝑓 𝑀𝑢𝑠𝑎 𝐴𝑐𝑢𝑚𝑖𝑛𝑎𝑡𝑎 𝑏𝑎𝑠𝑒𝑑 𝑜𝑛 𝑠𝑢𝑟𝑣𝑒𝑦

Demand Factor =
𝐹𝑜𝑟𝑒𝑐𝑎𝑠𝑡𝑒𝑑 𝑃𝑜𝑝𝑢𝑙𝑎𝑡𝑖𝑜𝑛

Musa Acuminata Vinegar

Forecasted Actual Demand for
Demand
Year Household Musa Acuminata
factor
Population Vinegar (L)
2019 457834 5.89 2697787.00
2020 472105 5.89 2781877.50
2021 486895 5.89 2869027.38
2022 502221 5.89 2959339.66
2023 518110 5.89 3052961.72
2024 534581 5.89 3150016.43
2025 551658 5.89 3250645.03
2026 569366 5.89 3354988.72
2027 587730 5.89 3463201.18
2028 606777 5.89 3575435.90
2029 626535 5.89 3691858.89

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APPENDIX E. Supply Computation

The Annual Supply of Vinegar was computed using this formula:

Annual Supplybrand = (Total Supply in Cebu City + Total Supply in Manadue City +
Total Supply in Lapu-lapu City)*12 months

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APPENDIX F. Projected Supply

Supply of Existing Vinegar (L) = Forecasted Household Population x Demand factor

𝐶𝑜𝑚𝑝𝑢𝑡𝑒𝑑 𝑠𝑢𝑝𝑝𝑙𝑦 𝑜𝑓 𝑒𝑥𝑖𝑠𝑡𝑖𝑛𝑔 𝑣𝑖𝑛𝑒𝑔𝑎𝑟 𝑏𝑎𝑠𝑒𝑑 𝑜𝑛 𝑣𝑒𝑟𝑏𝑎𝑙 𝑑𝑎𝑡𝑎

Demand Factor =
𝐹𝑜𝑟𝑒𝑐𝑎𝑠𝑡𝑒𝑑 𝑃𝑜𝑝𝑢𝑙𝑎𝑡𝑖𝑜𝑛

Existing Vinegar

Forecasted Supply Actual Supply

Year
Population factor for Vinegar

2019 457834 7.63 3,495,052.80

2020 472105 7.63 3,603,994.22
2021 486895 7.63 3,716,899.13
2022 502221 7.63 3,833,901.04
2023 518110 7.63 3,955,190.83
2024 534581 7.63 4,080,927.72
2025 551658 7.63 4,211,294.67
2026 569366 7.63 4,346,474.62
2027 587730 7.63 4,486,666.65
2028 606777 7.63 4,632,069.64
2029 626535 7.63 4,782,898.63

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APPENDIX G. Competitor’s Market Share Computation

The competitor’s market share was computed using the formula:

𝑠𝑢𝑝𝑝𝑙𝑦 𝑝𝑒𝑟 𝑏𝑟𝑎𝑛𝑑 𝑜𝑣𝑒𝑟𝑎𝑙𝑙 𝑠𝑢𝑝𝑝𝑙𝑦

=
𝑚𝑎𝑟𝑘𝑒𝑡 𝑠ℎ𝑎𝑟𝑒 𝑡𝑜𝑡𝑎𝑙 𝑚𝑎𝑟𝑘𝑒𝑡 𝑠ℎ𝑎𝑟𝑒
Note: Total market share =100%

Market share = X

Silver Swan
917222.4 = 3495052.8 = 26.243%
x 1

Datu Puti
874281.6 = 3495052.8 = 25.015%
x 1

Camel
775497.6 = 3495052.8 = 22.188%
x 1

Others
928051.2 = 3495052.8 = 26.553%
x 1

100.00%

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APPENDIX H. Yearly Production Capacity

Captured demand = Demand of existing vinegar x Percentage to steal

Percentage to steal:

Year 1-3 = 7.8%

Year 4-6 = 39%

Year 7-10 = 78%

𝐶𝑎𝑝𝑡𝑢𝑟𝑒𝑑𝐷𝑒𝑚𝑎𝑛𝑑
Daily Rate = x1000ml
𝑇𝑜𝑡𝑎𝑙 𝑤𝑜𝑟𝑘𝑖𝑛𝑔 𝑑𝑎𝑦𝑠 𝑖𝑛 𝑎 𝑦𝑒𝑎𝑟

Product
Respondents Percentage
Volume
100 ml 235 71.87%
200 ml 70 21.41%
350 ml 22 6.73%
total 327 100.00%

𝐷𝑎𝑖𝑙𝑦 𝑅𝑎𝑡𝑒 𝑥 𝑃𝑒𝑟𝑐𝑒𝑛𝑡𝑎𝑔𝑒

Production Capacity per day (bottles) =
𝑝𝑟𝑜𝑑𝑢𝑐𝑡 𝑣𝑜𝑙𝑢𝑚𝑒

Production Capacity per week (bottles)= Production Capacity per day (bottles)x (6days/week)

Production Capacity per month (bottles)= Production Capacity per week (bottles)x (4weeks/month)

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714 B Gorordo Avenue Lahug Cebu City, Cebu

Mobile: +639452002690
Email: sitsiritsit347@gmail.com

JOHN CARLO NINO V. ABEJO

PERSONAL DATA

Date of Birth January 9, 1999

Place of Birth Cebu City
Civil Status Single
Citizenship Filipino
Religion Roman Catholic
Height 5 feet 5 inches
Weight 50lbs
Father’s Name Alan V. Abejo
Mother’s Name Mercedita V. Abejo

EDUCATIONAL BACKGROUND

Primary Lahug Elementary School

Lahug Cebu City
2011

Secondary Lahug Nigh High School

Lahug Cebu City
2015

Tertiary University of Cebu – Main Campus

Sanciangko St., Cebu City
Bachelor of Science in Industrial
Engineering
(Student)

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Tuyan City of Naga Cebu

Mobile: +639503842490
Email: marjsmith@yahoo.com

MARJORIE L. CAINGLES

PERSONAL DATA

Date of Birth December 30,1998

Place of Birth Cebu City
Civil Status Single
Citizenship Filipino
Religion Roman Catholic
Height 4’11
Weight 53lbs
Father’s Name Diomedes L. Caingles
Mother’s Name Margina L. Caingles

EDUCATIONAL BACKGROUND

Primary Tuyan Central Elementary School

Tuyan City of Naga Cebu
2011

Secondary Naga National High School

Naga Cebu City
2015

Tertiary University of Cebu – Main Campus

Sanciangko St., Cebu City
Bachelor of Science in Industrial
Engineering
(Student)

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DASULA Lutopan, Toledo City, Cebu

Mobile: +639166764310
Email: iericakatada@gmail.com

ERICA M. KATADA

PERSONAL DATA

Date of Birth July 11, 1999

Place of Birth Cebu City
Civil Status Single
Citizenship Filipino
Religion Roman Catholic
Height 5 feet 4 inches
Weight 53lbs
Father’s Name Rodnedion V. Katada
Mother’s Name Mary Florelie M. Katada

EDUCATIONAL BACKGROUND

Primary Gen. P. Del Rosario Elementary School

Lutopan, Taledo City, Cebu
2011

Secondary De La Salle (AMSC)

Toledo City, Cebu
2015

Tertiary University of Cebu – Main Campus

Sanciangko St., Cebu City
Bachelor of Science in Industrial
Engineering
(Student)

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615-A Tormis Ext., Sambag 2, Cebu City

Mobile: 09071926933
Email: pilapilstephanie23@gmail.com

STEPHANIE G. PILAPIL

PERSONAL DATA

Date of Birth July 23, 1999

Place of Birth Valencia City, Bukidnon
Civil Status Single
Citizenship Filipino
Religion Roman Catholic
Height 5 feet
Weight
Father’s Name Alfredo L. Pilapil Sr.
Mother’s Name Soledad G. Pilapil

EDUCATIONAL BACKGROUND

Primary Doña Manuela Elementary School

28 Camia, Las Pinas, Manila, Metro
Manila
2011

Secondary Salvacion National School

Salvacion, Bayugan City
2015

Tertiary University of Cebu – Main Campus

Sanciangko St., Cebu City
Bachelor of Science in Industrial
Engineering
(Present)

209