Names: _____________________________________ Date submitted: ___________

Section code: _______________ Score:__________

Activity No. 3.2

PRODUCTION PLAN
A good entrepreneur does not only concern himself/herself on continuously developing a
unique product that sells but also with the equally important daily operations and management
of the whole enterprise.
The business plan provides a detail of how products are produced and the necessary
inputs, process steps and quality control requirement. This information is found in the
Production Plan section of the business plan. Established production standards from credible
agencies are used as basis for production information such as number of hills per hectare or
heads per cage for livestock or poultry. This is to get a conservative estimate of input
requirements and volume of production per hectare per cycle or season.
Labor as an important input is identified in terms of number of man-days (MD), man-
animal days (MAD) or man-machine days (MMD) and cost per labor. Quantity and cost of
material inputs are enumerated. Further, entrepreneurs should be able to map the lay-out of the
farm enterprise from production area, post-harvest storage, farm entry and exit location, office
and supplies section, and irrigation and power facilities.
On the other hand, the Business plan also presents in detail how the enterprise will be
organized as to its human resource. This refers to identifying the key people of the enterprise,
their qualifications, responsibilities and compensation. The Organizational chart shows the
hierarchy of command in the enterprise. This is significant in establishing authority and
accountability among employees and offices.
This activity focuses on crafting the operational and organizational section of the
Business Plan.
Objectives
At the end of the activity, the students are expected to:
1. create a flow chart of the production process.
2. identify material inputs, tools and equipment for the enterprise.
3. determine labor requirement for production.
4. sketch the farm lay-out of the enterprise.
5. Make an enterprise budget and whole farm plan.
Procedure
1. This is an activity to be submitted in the next laboratory meeting.
2. Product Specification and Production Schedule. Product specification describes the final
form of the output ready for sale in terms of variety/breed, size or grade, weight, days-old
and other characteristics for quality control. This also includes the estimated volume of
production per cycle of production activity. Production schedule refers to the time period of
production e.g. from planting to harvesting (for crops). Specify the months or number of days
per production cycle and the number of cycles per year. Write these information in Activity
Question 1- Table 3.3.1.
3. Production Process. Using references (books, production guides, internet search), creatively
draw the process flow of producing your product. Label each stages and provide a brief
description of each stage. Write this in Activity Question 2. See sample flow chart below.
You can choose other flow chart templates in Microsoft Word.
4. Tools and Equipment. In Activity Question 3- Table 3.3.2, list down the tools and equipment
your enterprise will need in order to produce your product. Indicate the number of units,
estimated cost per unit and total cost. Total cost is computed as the product of number units
and estimated cost per unit. Identify whether the tool or equipment will be purchased or
rented.

5. Supplies and Materials. In Activity Question 4- Table 3.3.3, list down the material inputs (e.g.
seeds, fertilizers, chemicals, feeds, etc.) your enterprise will need in order to produce your
product. Indicate the number of units, estimated cost per unit, and total cost. Total cost is
computed as the product of number units and estimated cost per unit. Note that the quantity
of these materials should be close to the standard recommendation for one hectare
production (in the case of agronomic/horticultural crop).

6. Labor Requirement. In Activity Question 5- Table 3.3.4, list down the number of
individuals/animal/machine and days needed to accomplish each stage in the production
process. Indicate how and how much these workers will be paid, whether on daily basis or
monthly basis for regular workers. The total labor per activity is computed by multiplying
number of man/animal/machine with the number of days needed to accomplish the task. For
example, if the enterprise uses a rented tractor to plow a one hectare land the total labor is
equal to 1 MMD (1 Man-Machine times 1-day work).

7. Production Lay-out. Provide a sketch of the farm plan or lay-out indicating location of major
facilities such as irrigation facility, storage for materials, post-harvest facility, etc. Write this in
Activity Question 6.

8. Organizational Chart. In Activity Question 7, creatively present the organizational chart of

the enterprise. You can make use of available templates in Microsoft Word. Indicate the
position occupied, qualification and responsibilities of each key person in Table 3.3.5.

Grading criteria
This activity will be graded by the following criteria and points:

Criteria Point allotment Actual points earned

Accurate product specification 5
Clear production schedule 5
Methodological production process 10
Completing Table 3.3.2 10
Completing Table 3.3.3 10
Completing Table 3.3.4 10
Farm lay-out 5
Clear organizational structure 10
Completing Table 3.3.5 10
Total 75 points
Activity:

Summary of Production Plan

1. Product Specification and Production Schedule. How would you characterized the final form
of your product? What are your indicators for a quality output? When can you say that the
output is ready for sale? Write your answer in paragraph form at the upper portion of Table
3.3.1. What months of the year will you begin and end your production? How often do you
expect to harvest and sell your product? Write this in the lower portion of the table.

Table 3.3.1 Product specification and production schedule of the enterprise.

Product Specification

Production Schedule
2. Production Process. What are the major stages in producing your product? How would you
describe each stage?

Flow chart of the production process

3. Tools and Equipment. What are the tools and equipment needed to produce your output?
Write this in the table below.
Table 3.3.2 List of tools and equipment for production.
Tool/Equipment Quantity Price per Total Cost Mode of Acquisition
Unit (PhP) (purchase or rented)
(PhP)

Use extra sheets if necessary

4. Supplies and Materials. What material inputs are needed to produce your output? Write this
in the table below.

Table 3.3.3 Material inputs for production.

Materials/supplies Quantity Price per Unit Total Cost
(PhP)
(PhP)

Use extra sheets if necessary

5. Labor Requirement. How many individuals/animals/machine are needed to accomplish the

different production activities? How many days will they finish the task? How much will they
be paid? Write down your answers by filling the table below.

Table 3.3.4 Labor requirement of the enterprise.

Activity Type of Number of Number Total Payment Total
Labor individuals of days Labor per unit cost
(MD/ MAD/
MMD)
 Sketch and Production Lay-out. How does the whole farm or production area look like?
Where is the entry and exit area? Where can you find the major facility and buildings? Draw
your farm sketch in the box below.

Farm Sketch and Lay-out of the enterprise

6. Make an Enterprise Budget. An Enterprise Budget -The formal listing of the expected
income expenses and profit for a single enterprise. It serve as “building blocks” of a
whole farm plan. On the other it is a table summarizing expected income, inputs and
materials and the corresponding profit. (PLEASE USE SEPARATE SHEET OR THE
SPACE AT THE BACK).

Enterprise Budget for __________________________________________________

Revenue/Income

Total Revenue

Expenses

Total Expenses
Net Income
Cost of Production
Break-Even Price
Break-Even Yield/Output
Return on Investment (ROI)
7. Make a whole Farm Plan/Production Plan (If more than one product). Whole Farm Plan -
is outline or summary of the type and volume of production to be carried out on the
entire farm and the resources needed to do it. And can be designed specifically for the
current or upcoming year or it may reflect a typical year over a longer period.
Whole Farm Plan
REVENUE/INCOME
Sales from Rice
Sales from Corn
Sales from Hogs
Total Sales

EXPENSES
Expenses for Rice
Expenses for Corn
Expenses for Hogs

NET FARM INCOME