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 unit
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

Native chicken eggs range in price from P8 to P10 per piece. This is significantly higher
than eggs from caged hens. Free-range chickens have a strong market for both meat and eggs.
Many Filipinos have turned raising native chicken into a profitable farming business. Free-range
chicken meat and eggs are becoming increasingly popular. This makes raising native chickens
appealing. There is a ready and expanding market.

Production Schedule

 Philippine native chicken production cycles last 6 months. The chickens hatch in the home
throughout these 6 months and reach their adult weight in 3 months. The home is then cleaned,
sanitized, and made ready to receive fresh eggs. This 6-months production cycle allows for the
production of 100 eggs per year for eac chicken

2. Production Process. What are the major stages in producing your product? How would you
describe each stage?
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 Mode of Acquisition
Unit (PhP) Cost (purchase or rented)
(PhP)

Feeders 2 110 200 Purchase

Bulbs 3 115 345 Purchase

Drinker 2 85 170 Purchase

Waste Bin 2 180 360 Purchase

Table 1 1,899 1,899 Purchase

Chairs 2 220 440 Purchase

Shovel 2 246 492 Purchase

Boots 2 300 900 Purchase

Gloves 2 50 100 Purchase

Egg Tray 1 210 210 Purchase

Native Chicken 1 130 130 Purchase

Nest
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)
Feeds 5kg 36 180
Vitamins 2 120 240
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 T Nu Nu T P
y m m o a
p be be t y
e r r al m
o of of e
f in da L nt
L div ys a pe
a id b r
b ua or un
o ls it
r
(
M
D
/
M
A
D
/
M
M
D
)
cost
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

Expens
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