Product: its use and users

Nata is Spanish word derived from the latin word Nature meaning to float. It is usually white or cream colored and as well liked for dessert and and for making or preparingbuko salad and it will served as dessert after meals. But the proposed product was Nata de Langka it is usually yellowish in color and it will be packed in a bottle jar with label, approximately 60g. Though it is a processed food, the natural flavor and taste can maintained.

Nata de langka is a nutritious dessert and its advantage is the sweetness found in (langka) and it provides a good supply of proteins, carbohydrates and vitamins.

The proposed business project is a food manufacturing type, which is on the production of Nata de Langka it is good for preparing dessert after or before meals. The target consumers of the product are the household population of the target market.

INTRODUCTION

There are different products that exist in our local market today. The proponent decided to propose a new variation of nata that compliments the dishes dessert and salad utilizing the original flavor of jackfruit. A delicacy popularly called nata is formed by cellulose forming bacterium, acetobacteracetixylinum or acetic acid xylinum. Nata is usually white or cream colored and as well like for dessert and for preparing buko salad. There are already existing differentnata products in the market. Such as nata de pinya, nata de coco and etc. in the preparation of the nata, the presence of the right percentage of sugar, a definite acidity and the addition of proper nutrient like ammonium sulfite, urea acid, and ammonium phosphate are important. The culturing requirements for the formation of nata are as promoting factors, temperature about 28oc, pH, nitrogen source like ammonium, salts, and carbon source like sucrose or glucose.

This study will attempt jackfruit as raw material to process nata. Jackfruit provides a good supply of proteins, carbohydrates and vitamins. It contains 38% carbohydrates, 6.6% proteins and 0.4g fats, vitamins like Vitamins A, C and certain Vit. B1. The proposed business project also known as Armandos Best NATA de LANGKA.

Brief Description of the Business

The proposed business project is a food manufacturing type, which is on the production of NATA de LANGKA it is good for dessert and for preparing buko salad. The target consumers of the product are the household of Pio Duran Albay, DonsolSorsogon, and near Barangays. The label of the products states the name of the products, contact number, expiration date and ingredients to be used. NATA de LANGKA is likely intended for desserts and for preparing buko salad. Its advantage is the sweetness found in (LANGKA) and it provides a good supply of proteins, carbohydrates and vitamins. It will be packed at 60g per jar. The proponent will be used the streamers, fliers, and conduct a free taste sampling to recognize the product. And it will be delivered at all grocery stores, market, canteen, and schools.

Procedure:

1. Select ripe jackfruit washed and sliced. 2. Get the pulp of jackfruit then blend. 3. Strain the ground pulp. Measure the juice 4. Mix 100g sugar, 2L mother liquor and 350ml. acetic in the juice. Mix them thoroughly. 5. Distribute the mixture equally in a plastic container about 2-3 inches deep. 6. Cover with Manila paper and set aside in an undisturbed place for 8-10 days as the fermentation process. 7. Harvest the nata after specified period.

After harvest:

8. Wash the nata thoroughly and cut into cubes. 9. Immerse in water for two days changing the water often to remove the sour taste. 10. Boil in water for 2 or more times until the sour taste and odor are completely remove. 11. Drain and weight. 12. Add an equal weight of sugar and stir thoroughly (1kg of refined sugar in every 1kg of nata). 13. Boil again until it is tender. Cool 14. Pack in a bottle then process it in a thermal processing.

EXECUTIVE SUMMARY Armandos Best NATA de LANGKA Sta. Cruz DonsolSorsogon NATA de LANGKA Production Sole Proprietorship Armando M. Olivas Jr. Owners Equity Php.141,201.37

Name of Business Location

: :

Nature of the Business: Form of Business Proponents : :

Sources of financing : Total project cost :

Return on Investment : Cash payback period : Start of operation : April 2014

VISION: To be the first and leading producer and distributor of Nata de Langka in the municipality of Donsol Sorsogon, Pio Duran Albay and Ligao City.

MISSION: To promote Lanka as a main ingredients/materials of a product at an affordable price. And to provide safe and convenient to customers in this fast changing time and to uplift and generate income to the community; to provide employment to the people in the locality; to be an active contributor to the growth and development of our economy and to promote good health among the customers by providing safely. Train and educate the workers to be efficient responsible and to help the economic growth of the locality.

BUSINESS OBJECTIVES: 1. To be the leading producer and seller of Nata de Langka products in Donsol, Pio Duran and Ligao. 2. To gain profit out of the business. 3. To help improve the economy of Donsol and provide employment for the individual for them to live a good standard of living. 4. To contribute in the economic growth of the country by paying taxes.

MARKET STUDY

Production Process Flow Chart

Cleaning Ripe Jackfru it Slicing Preparation of the sample Pulping Mechanical Method of Extraction

Filtrating

Juice
Mixing T1 T2 T3

Meat

Fermenting

Harvesting

Washing

Cutting

Boiling

Syruping

Boiling Time 1 Time 2 Time 3

Immersing

Thermal Processing Temp.1 Temp.2 Temp. 3

Bottling

NATA de LANGK A

Delivery

Demand Analysis Demand is the willingness of the buyer/prospective customers to buy the product. The proposed product of this study is the processed of Nata de Langka, to compute for the demand of the proposed product, the proponent divided to use the household population of the Pio Duran Albay, Ligao City and Donsol Sorsogon.

TABLE 1 Projected Household for the next 6 years Number of projected household Year Donsol Pio Duran Ligao City Sorsogon Albay Actual 2014 9,991 10,224 111,259 2015 10,173 10,355 112,906 2016 10,358 10,488 114,577 2017 10,547 10,622 116,273 2018 10,739 10,758 117,994 Total 51,808 52,447 573,009 (Source: NSO Demographic Survey)

Total 131,474 133,434 135,423 137,442 139,491 677,264

From this data gathered, the proponent arrived with the projected household for 2013 by multiplying the growth rate with actual household and adding the same with product. The projected household from 2013-2018 was also determined. Projected household population of Donsol Sorsogon, Pio Duran Albay, and Ligao City with the corresponding growth rates of 1.82% in Donsol Sorsogon, 1.28% in Pio Duran Albay, and 1.48% in Ligao City.

Name of Towns/City Pio Duran Albay Ligao City Donsol Sorsogon Total

Household Population 10,224 111,259 9,991 131,474

TABLE 2 Prospective Buyer

Year 2014 2015 2016 2017 2018 (source: actual survey)

Household Population 131,474 133,434 135,423 137,442 139,491

% of Willingness to buy 83% 83% 83% 83% 83%

Prospective buyer 109,123 110,750 112,401 114,077 115,778

The table 2 shows the computation of the prospective buyer. The total number of household was multiplied to 83% which was the percentage of willingness to buy. Percentage of willingness to buy is based from actual survey.

TABLE 3 Projected Demand Year 2014 2015 2016 2017 2018 Prospective Buyer 109,123 110,750 112,401 114,077 115,778 Average Per Capita Consumption 17 17 17 17 17 Total Demand 1,855,091 1,882,750 1,910,817 1,939,309 1,968,226

The table 3 shows the total demand for the product. It was calculated by multiplying the prospective buyer by the average per capita consumption. Based on the study there are 1,680 packs related products consumed in a year. To get the average per capita 1,680 packs divided to 100.

TABLE 4 LIST OF DEALERS OF SIMILAR PRODUCTS

Address

Dealers Nevares Store

Supply of Products Nata de Coco

Supply per Month 350

Supply per Year 4,200

Donsol Sorsogon

Melitante Store

Fruit Cocktail

300

3,600

Donsol Mini Mart Pavia Store PioduranAlbay Llenaresas Store

Nata de Pia Nata de Coco Fruit Cocktail

150 250 400

1,800 3,000 4,800

LCC Ligao City Expressmart Total (Source: Actual Interview)

Nata de Coco Fruit Cocktail

500 475 2,425

6,000 5,700 29,100

The proponent of Nata de Langka can compete with other Nata products in terms of its fruit flavor, taste and texture of its products and the packaging method. The propose Nata will be packed in a bottle jar thereby for the safetyness of the consumers and easy to transport and make sure the product was sealed.

TABLE 5 PROJECTED SUPPLY OF SOME COMPETING PRODUCT FOR FIVE (5) YEARS YEAR 2014 2015 2016 2017 2018 PROJECTED SUPPLY (10% INCREASE) 32,010 35,211 38,732 42,605 46,866

These supplies of competing products were projected to increase 10% per annum, based on the interview conducted on the existing distributors and suppliers. Table 5 shows the projected supplies of competing products for the next 5 years. Demand and Supply Gap Analysis The demand and supply gap were obtained by subtracting the total supply from the total demand. There will be a high possibility of a high acceptance for the proposed business by the target market. Production volume is projected to increase by 10% per annum. Market share was determined by dividing the production volume over the demand and supply gap and multiplied by 100% per year. Table 6 shows the demand and supply gap of the product.

TABLE 6 PROJECTED PRODUCTION VOLUME AND MARKET SHARE DEMAND AND SUPPLY GAP 1,823,081 1,847,539 1,872,085 1,896,704 1,921,360

YEAR 2014 2015 2016 2017 2018

TOTAL DEMAND 1,855,091 1,882,750 1,910,817 1,939,309 1,968,226

TOTAL SUPPLY 32,010 35,211 38,732 42,605 46,866

PRODUCTION VOLUME 2,560 2,816 3,104 3,408 3,744

MARKET SHARE 1.40% 1.52% 1.65% 1.79% 1.94%

The demand and supply gap was analyzed in order to determine if the proposed business has a placed in the market. Table 6 shows that proposed business has a potential in the market, with a market share of 2.31% on its first year of operation and expected to increase to 3.21% on its fifth year of operation as projected.

.Marketing Strategy Selling the product is a hard task on the part of the manufacturer. In order for the product to be sold several strategy in marketing must be employed. Marketing strategies focus on the four Ps of marketing. Product, Price, Promotion and the place.

Product Strategy The product is created out of ingredients that is only grown/abundant in the Locality Nata de Langka is a fruit product. It is processed together with some ingredients to attain its best taste and appearance. It will be bottled jar to make it attractive and catch the attention of the target customers. The innovation is expected to bring more curious costumers which expected to become regular buyers because of its delicious taste of jackfruit (langka). The proponent decided to produce Nata de Langka to introduced in the market. The product will be packed in bottled jar and the selling price of product is Php.36.02 the price is comparable to the prices of existing related products in the market.

Pricing Strategy Selling price is based on unit production cost with a mark-up of 7%.which is enough to supplement the administrative. The suggested selling price of the proposed product is Php.36.02 per bottle of 60g. It is just equal from the price of the competitors and it will serve as an advantage of product. The proposed product will sell and distribute to the target consumers, buyer and through distributors such as grocery stores and all outlets in order to patronize the product.

Promotional Activities The strategies that will be used in promoting the product are: (1) offer discounts to the costumers who have a large volume of purchasing of product, (2) giving pamphlets to the prospective buyers for them to be guided with the necessary information about the product, (3) free taste campaign, it will be done purposely to know the reaction of the costumers. Based from their reaction we can determine if they like the product or not.

Figure 1 LABEL

Armandos Best Nata de Langka

Ingredients: Ripe Jackfruit Mother Liquor Acetic Acid Water

Address and contact number of manufactured

Sta Cruz DonsolSorsogon

09466846000/ 09272905990
Net Wt.60g

Channel of Distribution Nata de Langka will be sold directly to end users or distributed to sari-sari stores in the selected barangays in Donsol, Pio Duran, and Ligao. Figure 2 shows the channel of distribution that will be adopted by the proposed business.

Figure 2. Channel of Distribution of Nata de Langka

PRODUCERS R DISTRIBUTOR

END USERS COSTUMERS

TECHNICAL STUDY

Product Specification and Composition Nata is Spanish word derived from the latin word Nature meaning to floatIt is usually white or cream colored. It is a chewy, jelly-like food product and it is highly regarded for its high dietary fiber, zero fat, and cholesterol content. Nata de Langka used for processing should be smooth, yellowish in color, firm in texture and preferably 1 to 1.5cm. in thickness and as well liked for dessert and for making or preparing buko salad and it will served as dessert after meals. It will be packed in a bottle jar with label, approximately 60g. Though it is a processed food, the natural flavor and taste can maintained. Nata de langka is a nutritious dessert and its advantage is the sweetness found in (langka) and it provides a good supply as proteins, carbohydrates and vitamins. The proposed product is a Nata made out of Langka/Jackfruit. Nata means it will be turned into a jelly/chewy white or cream jelly.

PRODUCTION PROCESS It will presents the processing of jackfruit into Nata de Langka which include the proportion. Ingredients, procedure and the degree of acceptability in terms of color, aroma, texture, taste and the production cost. It is present the correct proportion of ingredients in processing of jackfruit into Nata De Langka, the process involved were illustrated step by step. 1. Select ripe jackfruit, cleaning and slice 2. Get the bulb of jackfruit then blend. Strain 3. Add the juice in 6L water, then add sugar 4. Mix well using a wooden spoon 5. Add the mother liquor after removing the thin nata growth add the glacial acetic. Mix thoroughly 6. Pour the mixture into clean hot water sanitizes fermenting containers to depth of about 2 inches 7. Cover with manila paper set aside in undisturbed place for 10-14 days 8. Harvested nata is cleaned by removing the cream adhering to the lower portion of nata. Syruping of Nata de Langka 1. Cut cleaned nata into cubes approximately 1cm 2. Soak the nata for one or more days in water changing it in several times to remove the sour taste and smell 3. Drain the nata and boil in water for 5-10 minutes or until the acid is totally removed. Check if the acid is totally removed 4. Prepare jackfruit syrup and mix it thoroughly in a nata. Set aside overnight until the nata is fully penetrated or evenly mixed with jackfruit syrup.

Figure 3 Production Process Flow Chart

Cleaning

Ripe Jackfr uit

Slicing

Preparation of the sample

Pulping

Mechanical Method of Extraction

Filtrating Juice Meat

Mixing T1 T2 T3

Fermenting

Harvesting

Washing

Cutting

Boiling

Syruping

Boiling Time 1 Time 2 Time 3

Immersing

Thermal Processing Temp.1 Temp.2 Temp. 3

Bottling

NATA de LANGK A

Delivery

Production Volume and Schedule The Business will operate four (4) days a week on an average of sixteen (16) days production per month the production and sale operation will be from 8:00 am to 12:00 noon and 1:00 pm to 4 :00 pm as shown in table 9.

Table 9 Production and Distribution Schedule

Weeks

Monday

Tuesday

Wednesday

Thursday

Friday

Monday Production and Packaging checking and inspecting the maintenance and sanitation of the production area. Tuesday Production and Packaging, Purchasing raw materials and order taking Wednesday Production and Packaging Thursday - Production and Packaging, collection and order taking Friday Delivery Saturday and Sunday Rest day

Table 9 shows the production Volume of the proposed production for five (5) consecutive years under study. Production volume will increase by 10% annually.

Table 10 Production Volume Year 2014 2015 2016 2017 2018 Total Daily 160 176 194 213 234 977 Weekly 640 704 776 852 936 3,908 Monthly 2560 2, 816 3, 104 3, 408 3, 744 15,632 Yearly 30,720 33, 792 37, 248 40, 896 44, 928 187,584

Table 10 shows the product on volume of the proposed production for five (5) Consecutive years under study. Production and Volume will increase by 10% annually.

Raw Materials Requirements The primary raw materials will be used for the production of the Nata de Langka. Table 11 Raw Materials Requirements Raw Materials Ripe Jack fruit Mather liquior Acetic Acid Sugar Total Volume per day 1 kg. ripe Jackfruit 2L 350 ml 100g Unit Cost 80.00/klo. 100.00/L 0.1/ml 6.25/100g Total Cost Week Month 320.00 1280.00 800.00 140.00 3,200.00 560.00

Day 80.00 200.00 35.00 6.25 321.25

Year 15,360.00 38,400.00 6,720.00 1,200.00 61,680.00

25.00 100.00 1,285.00 5,140.00

Table 11 shows, the raw material needed for production with its corresponding costs. Unit costs were gathered from actual interview conducted by the proponent with different vendors selling the raw material. The business needs Php. 61,680.00. To produce the annual raw material

Table 12 Packaging Materials Requirement Particular Sticker Pet jar Top Seal Total Quantity Unit costs Daily 160 pcs. 0.75 120.00 160 pcs. 13.00 2,080 160 pcs. 2.00 320.00 Weekly 480.00 8,320.00 1,280.00 Monthly 1,920.00 33,280.00 5,120.00 Yearly 23,040.00 399,360.00 61,440.00 483,840.00

Table 12 shows the packaging materials and its cost which is needed in the production of the proposed product. The said materials will come from the supplier stated as its source. TABLE 13 Transportation Expense Cost/Week Php.240.00 Cost/Month Php.960.00 Cost/Year Php.11,520.00

Table 13 shows the transportation expense that will be allocated for the delivery of finished proposed product.

Production Tools, Utensils and Equipments During the production activities, tools & utensils, and equipments are used to make the process faster and easier. It enables to meet the production schedule. Table 14 presents the tools and equipment needed for the production with the corresponding cost. Table 14 Production Tools & Equipment Particulars Quantity Unit cost 1,800.00 2,500.00 Total cost Economic life 3,600.00 5,000.00 5 years 5 years Yearly, Depreciation 720.00 1,000.00 1,720.00

Blender 2 Electric 2 sealer Total (source: LCC Legaspi)

The table 15shows the unit cost of utensils Table 15 Production Utensils Particulars Quantity Slicing knife 4 Stock Pot 5 Measuring Cup 4 Wooden spoon 4 Chopping board 4 Strainer 4 Mixing bowl 2 Plastic Container 20 Weighing Scale 2 Total (source: Pioduran Public Market) Unit Cost 8 15 120 25 50 150 500 50 200.00 Total Amount 32 75 480 100 200 600 1000 1000 400.00 3,887

To maintain a clean sanitary, production site the proponent needs materials and other things for the purpose. Table 16 Production Supplies Particulars Quantity Apron 4 Hairnet 10 Face mask 10 Pot holder 10 Hand gloves 1 pack Total (source: Pioduran Public Market) Unit Cost 35.00 20.00 15.00 5.00 30.00 Total Amount 140.00 200.00 150.00 50.00 30.00 570.00

The next tables show the list of the production furniture and fixtures and housekeeping supplies that are needed to make the production area clean. Table 17 Production furnitures and fixtures Particulars Quantity Unit cost Total costs Estimated life 5 years 5 years 5 years 5 years 5 years Yearly depreciation 850.00 350.00 300.00 480.00 674.00 2,654.00

Working 2 2,125.00 4,250.00 table Chairs 5 350.00 1,750.00 Storage 1 1,500.00 1,500.00 Cabinets Stand fan 2 1,200.00 2,400.00 Fire 1 3,368.00 3,368.00 Extinguisher Total 13,268.00 (source: Villanueva Furniture, BFP Pioduran)

Table 18 Housekeeping Supplies Particulars Quantity Basin 2 pail 2 Deeper 2 Dishwashing liquid 12 bottle Dish scrubber 12 pcs Trashcan 2 Dust pan 2 Broom 2 Floor Mop 2 Total (source: Pioduran Public Market) Unit Cost 60 400 20 36 15 95 45 100 150 Total Amount 120 800 40 432 180 190 90 200 300 2, 352

Waste Disposal Scheme The proponents are conscious of the environment with the proper disposal of waste materials that will be strictly complied. One of the main factors that should be maintained is the sanitation of the area through proper waste disposal. The proponent will be avoid necessary hazard to the environment and to the community. Plastic bags and other wrappers can be recycled or reused for the purposes. Trashcan will be placed in the conspicuous part of the building to dispose properly. Likewise the good drainage system will be secured and always to be of good condition to ensure that it will be environment and neighborhood friendly.

Quality Control Strategy One of the concerns in business is to produce high quality products that will promote the costumers safety in business producing right quality of the product is one of the most important factors to consider this is achieved starting from the purchase of the raw materials until the finished product is distributed. The producers should see to it that the utensils to be used are clean and sterilized, tools and equipment in good condition to ensure continuity in the production activities. A blender machine is needed to make the product be of uniform texture and quality of the product. Workers are required to wear apron, hairnet, handgloves and face mask during the product on process and packaging to avoid contamination of bacteria. The production area should observed cleanliness and prevent to coming of insects and parasites. The finished product will placed in boxes and distributed to their respective area to avoid breakage.

Plant Layout

The building is to be rented from the proponents parents amounting to Php.800 per month. The building light and other facilities are to be renovated and improve. The proponent prefers this location because there is ample supply of water and electricity. Manufacturing is the type of the business and it needs a right space to provide good working conditions in the operation of production.

Building facilities To ensure a continuous production activity, the equipment must be placed in their respective areas and the area must be in proper order. Building will be rented at fixed amount of 800 every month. The building must have an office the estimated cost of the construction of the office is estimated of Php.32,430.00

Table 19 Total Cost for Renovation Particulars Sand (400 cans) 80 Cement 23 pcs. Metal (cabilla) 175 pcs. of hollow blocks Paints (3 gallons) Others Fluorescent (2pcs.) Nail #1,2,3,4 (12kls.) Add: 2 Laborers (7 days 200/day) Total (source: APPAMP Trading) Amount 800.00 17,600.00 2,300.00 2,450.00 1,800.00 2,300.00 1,600.00 780.00 2,800.00 32,430.00

COST OF PRODUCTION Unit Production Cost (Monthly Basis)

Direct Cost: Direct Materials Packaging materials Direct Labor Total direct costs Overhead expense: Production tools and utensils Housekeeping supplies Rent expense Utility costs Depreciation: Equipment Furniture and fixture Building Total production costs: Divide: production volume Unit cost Add: Mark-up (7%) Unit selling price (per bottle) Php. 143.33 221.16 2,702.50 Php.3,887.00 2,352.00 800.00 5,124.40 Php.5,140.00 40,320.00 25,512.00 Php.70,972.00

15,230.39 86,202.39 2,560.00 Php.33.67 2.35 Php.36.02

The proposed project will be located at Sta. Cruz DonsolSorsogon. It is an ideal Location which will bring a great competitive advantage. The location was owned by the Proponents family.

UTILITIES REQUIREMENTS

Utilities are necessary required in the operation of the business to make the production faster, easier and convenient. It mainly composed of electricity for lighting, ventilation and for using electrical tools/equipment, and water for mixing, drinking and washing. These are presented in table 20.

TABLE 20 UTILITIES REQUIRED AND COST Production Utilities Water Electricity Total (source: SORECO) The water bill is fixed at a cost of Php.30.00 monthly. The electrical power supply will be provided by the SORECO with a rate of Php.11.00 the required electricity to be consumed and its cost was determined by computing the consumed power at a given time then multiplied by the rate per kilo watt hour. Month 30.00 5,094.40 5,124.40 Year 360.00 61,132.80 61,492.80

LABOR REQUIREMENT

The required number of labor for the business operation will be four (4) production workers. The two workers will perform in the preparation of the ingredients and packaging. And the two workers will perform in the mixing and fermenting section. Their working time will be 8 hours per day. They will receive Php.25.50 per hour which is equivalent to Php.204.00 per day each of them will avail fringe benefits such as Phil. Health and SSS.Salaries will be given at the 15thand 30thday of the month. The monthly compensation together with the fringe benefits that the workers will received as indicated in table 21.

TABLE 21 DIRECT LABOR AND FRINGE BENEFITS

Labor cost SSS Philhealth Direct labor No. Daily Month Year Month Year Month Year Production 1 204.00 4,896.00 44,064.00 353.00 4,236.00 50 600 worker 1 Production 1 204.00 4,896.00 44,064.00 353.00 4,236.00 50 600 worker 2 Production 1 204.00 4,896.00 44,064.00 353.00 4,236.00 50 600 worker 3 Production 1 204.00 4,896.00 44,064.00 353.00 4,236.00 50 600 worker 4 Total 816.00 19,584.00 451,584.00 1,412.00 16,944.00 200.00 2,400.00

The business will not operate without the help of manpower. It is proper for the business to allocate compensation and benefits to its worker not just as a reward but it is requirement by law.

TABLE 22 OFFICE SUPPLY (1 Year) Quantity 2pcs 12pcs Particulars Record book Ball pen (Faber castle) Official receipt Calculator Scissor Bond paper Stapler White out Staple wire Unit cost 125.00 10.00 1,000.00 150.00 25.00 .50 75.00 26.00 20.00 Total cost 250.00 120.00 5,000.00 300.00 50.00 50.00 150.00 130.00 100.00 6,150.00

5pcs 2pcs 2pcs 100sheet 2pcs 5pcs 5 box Total (source: Pavia Trading,Pioduran)

Table 22 shows the enumerated list of office supplies to be utilized in the operation of the proposed business.

TABLE 23 OFFICE FURNITURE AND FIXTURE

Particulars Office table Office chair Stand fan Filingcabinet Total

Quantity 1 3 1 1

Unit cost 2,500.00 900.00 1,200.00 1,600.00

Total costs 5,000.00 2,700.00 1,200.00 1,600.00 10,500.00

Estimated life 5 years 5 years 5 years 5 years

Yearly depreciation 1,000.00 500.00 240.00 320.00 2,060.00

Table 23 shows the total amount of office furniture and fixture needed for administrative.

ORGANIZATIONAL AND MANGEMENT STUDY

FORM OF BUSINESS ORGANIZATION The proponents prefer a sole proprietorship as the form of business organization. thenorganizations is owned and manage by sole. This type of business organization has several advantages where it is best for his business. It can start its operation as soon as the required permits and licenses being authorized by the law are served. Another advantage is that the owner can make moves unknown to his competitors since he is not required by the law to share information to the advantage of the proponent with other competitors and the owner has a direct contact with his employees thats why there exist an open communication with them for what problem that can encounter by the employees may arise then the proponent can immediately resolve it. And the decisions are made solely by the proponent regulations regarding the business operation whatever decisions are immediately implemented.

The organizational structure of the company will be in line form which is simply indicated in figure

figure 4 ORGANIZATIONAL CHART Production Manager

Production worker 1

Production worker 2

Production worker 3

Production worker 4

Duties and responsibilities Production Manager Overall manager of the firm who supervise the performance of the workers in the production area regarding quality control. Acts as the secretary who does the bookkeeping and keeps all the records of business transaction. Does the financial statement reports, cashiering and all office works. Does the selling and marketing procedures in all business transactions. Does the promotion, sales talk with the clients, and delivery of the products to the customers and the order taking.

Production worker 1 and 2 Performs the production processes such as preparation of the ingredients and packaging keeps the cleanliness and orderliness in the production area.

Qualifications: Male Or Female 20-28 years of age At least high school graduate Must be efficient, hardworking, honest, punctual and willing to be trained and work at a given schedule.

Production worker 3 and 4 Performs the production processes and procedures such as blending, mixing and fermenting of the products. Maintains the high quality standards of raw materials in the production of the products. keeps the cleanliness and orderliness in the production area.

Qualifications: Male Or Female 20-28 years of age At least high school graduate Must be efficient, hardworking, honest, punctual and willing to be trained and work at a given schedule.

MAN POWER COMPENSATION SCHEME

The firm will require four (4) production worker of Nata de Langka. Their working hours will be eight (8) hours and will receive Php.25.50 each per hour which is equivalent to Php.204.00 per day or Php.3,264.00 monthly and Php.39,168.00 for the total annual salary. They will avail fringe benefits each such as SSS and Phil health which will be included to their monthly salary. In the administrative department there will be only one (1) manager who will receive a daily salary of Php.370.50 or Php.5,928.00 monthly and Php.71,136.00 for the annual salary. There will be also SSS and Phil health benefits for the management the salaries will be given every 15th and 30th day of the month.

Table 24 shows the manpower compensation of the direct and indirect labors of the proposed business with the corresponding fringe benefits.

TABLE 24 MANPOWER COMPENSATION AND FRINGE BENEFITS Salary and fringe benefits Monthly Annually Monthly Annually Monthly Annually Monthly Annually 5,928.00 71,136.00 624.00 7,488.00 125.00 1,500.00 6,677.00 80,124.00 4,896.00 44,064.00 353.00 4,236.00 50.00 600.00 5,299.00 52,200.00 4,896.00 44,064.00 353.00 4,236.00 50.00 600.00 5,299.00 52,200.00 4,896.00 44,064.00 353.00 4,236.00 50.00 600.00 5,299.00 52,200.00 4,896.00 44,064.00 353.00 4,236.00 50.00 600.00 5,299.00 52,200.00 25,512.00 229,608.00 2,036.00 24,432.00 325.00 3,900.00 27,873.00 288,924.00 Labor costs SSS Phil health

Position Managers Worker 1 Worker 2 Worker 3 Worker 4 Total

FINANCIAL STUDY

FINANCIAL ASSUMPTION 1. Working capital will be computed for one month 2. Contingences are assumed to be 5% of the working capital 3. TERMS OF SALE: The company will be involve in cash and credit sales, a.) 88% of total sales will be cash sales and estimated to be collected within 15 days b.) 2% discount will be given to cash sales. c.) 10% of credit sales is estimated to be outstanding at the end of the year. 4. Direct labor is assumed to increase 5% per year 5. The cost of raw materials is assumed to increase by 5% per annum 6. Utilities are assumed to increase by 5% annually 7. Administrative salary is assumed to increase 5% per year 8. Packaging materials will increase 3% annually 9. Office supplies have an annual increase of 3% yearly 10. Delivery expenses are expected to increase 3% yearly 11. Promotional expense is fixed 1,500.00 yearly 12. Rent expense is fixed at 9600 annually 13. Registration and licenses will increase at 3% yearly 14. Production volume is assumed to increase by 10% yearly 15. Housekeeping supplies have an annual increase of 3% 16. The selling price is assumed to increase at Php.1.00 per year 17. Production supplies is assumed to increase by 2 % yearly 18. Php. 11,520.00 will be allocated for transportation, it is assumed to increase by 5% annually. 19. Depreciation expense assumed to increase 3% per year.

TOTAL PROJECTED COST A. Fixed Assets Building Improvement Tools and utensils Equipments Furniture and Fixtures Production `Total Fixed Assets B. Working Capital (one month) Raw Materials Packaging Materials Housekeeping Supplies Office Supplies Utilities Direct Labor Administrative Salary Fringe benefits Rent Expense Transportation Promotional Total Working Capital C. Pre-Operating Expense PFS Preparation Registration, license and permits Total Pre-Operating Expense D. Contingencies (5% of A,B and C)

Php.32,430.00 1,720.00 63,600.00 2,654.00 5,010.00 Php.45,701.00

Php.5,140.00 42,880.00 2,352.00 512.50 524.00 25,512.00 4,896.00 800.00 800.00 960.00 1,500.00 Php.85,876.50

Php.850.00 2,050.00 Php.134,477.50 Php.6,723.87

Total Projected Cost

Php.141,201.37

Schedule 1 Computation of the Projected Household Population of Donsol, Pio Duran and Ligao City Formula Used: X.= Xxg + X Where: X = Projected Household population per year X = Projected Household population for the present year g = Growth rate

Donsol Sorsogon Year 2013 total household population is 9,812 , Growth rate is 1.82% Year 2014 = 9,812 x 1.82% + 9,812 = 9,991 Year 2015 = 9,991 x 1.82% + 9,991 = 10,173 Year 2016 = 10,173 x 1.82% + 10,173 = 10,358 Year 2017 = 10,358 x 1.82% + 10,358 = 10,547 Year 2018 = 10,547 x 1.82% + 10,547 = 10,739

Pio Duran Albay Year 2013 total household population is 10,095 , Growth rate is 1.28% Year 2014 = 10,095 x 1.28% + 10,095 = 10,224 Year 2015 = 10,224 x 1.28% + 10,224 = 10,355 Year 2016 = 10,355 x 1.28% + 10,355 = 10,488 Year 2017 = 10,488 x 1.28% + 10,488 = 10,622 Year 2018 = 10,622 x 1.28% + 10,622 = 10,758

Ligao City Year 2013 total household population is 109,636 , Growth rate is 1.48% Year 2014 = 109,636 x 1.48% + 109,636 = 111,259 Year 2015 = 111,259 x 1.48% + 111,259 = 112,906 Year 2016 = 112,906 x 1.48% + 112,906 = 114,577 Year 2017 = 114,577 x 1.48% + 114,577 = 116,273 Year 2018 = 116,273 x 1.48% + 116,273 = 117,994

Schedule 2 Getting the Respondent in each Mulnicipality/City

Computation for the sample size

The formula used:

n = N_______ 1+n(e)

Where: n = sample size N = Total Household Population e = Level of error

Solution: n= 131,474________ 1+131,474(0.05) 131,474________ 1+131,474x(0.0025) 131,474________ 1+328.69 131,474________ 329.69 399 Respondent

n=

Schedule 3 Computation of the Survey Results and Percentage of the Willingness to Buy the Product

Municipality/City Donsol Pio Duran Ligao City Total

No. of Respondents 30 31 338 399

No. of Willing to Buy 25 20 287 332

Percentage of willingness to buy = Number of respondents whose willing to buy Total number of respondents = 332 x 100 399 = 0.832 x 100 = 83.21% = 83%