Department of Industrial and Management Engineering
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1 Feasibility Study on Mixed Fruit and Vegetable Smoothie Production
Western Mindanao State University Department of Industrial and Management Engineering 2
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ACKNOWLEDGEMENT
This feasibility study would not be made possible without the guidance and love of our ALMIGHTY GOD. It is true that the harder the struggle, the more glorious the triumph. We, the FRUGIES group is truly overwhelmed and proud that finally our sacrifices and hardships in complying this feasibility study as the requirement for accomplishing our course as an Industrial and Management Engineering student had turned out successfully. To our family, thank you for the support and understanding. We used to come home late, tired, sleepy and sometimes out of mind that were not even able to help in the household chores but rather leaving our bedrooms messy and untidy and our things left unfixed. Thank you so much for the trust and considerations and all out support. We would also like to acknowledge the kindness of our beloved best friends who were sincerely and eagerly involved in helping us to make this study easier. Thank you so much APYUGON FAMILY for everything, specially to our humble and reliable friend Mr. Cresente Baynos, a.k.a Bossing for welcoming us to his apartment and allowing us to have our fruit combinations experiment in order for us to come up with the best and unique combinations of fruit smoothie as our proposed product in this study. To our classmates who have never doubted our product and stayed loyal in consuming and buying our product. And of course to the ever supportive IME faculties, thank you for believing in our capabilities and for inspiring and pushing us to our limits.
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TABLE OF CONTENTS
I PROJECT SUMMARY
1. Introduction------------------------------------------------------------------------------------------------------- 1 2. Project Title---------------------------------------------------------------------------------------------------------2 3. Type of Business Organization---------------------------------------------------------------------------------2 4. Project Proponents/Researchers------------------------------------------------------------------------------2 5. Project Location---------------------------------------------------------------------------------------------------2 6. Estimated Total Project Cost-----------------------------------------------------------------------------------2 7. Mission and Vision------------------------------------------------------------------------------------------------3 8. Short Term Objective and Long Term Objective-----------------------------------------------------------3
9. Specific Objective-------------------------------------------------------------------------------------------------4
10. Limitations and Scope of the Study--------------------------------------------------------------------------5 11. Highlights of the Study------------------------------------------------------------------------------------------6 12. Methodology------------------------------------------------------------------------------------------------------6 13. Leadership Strategy---------------------------------------------------------------------------------------------6
II ORGANIZATION AND MANAGEMENT ASPECT
14. Form of Ownership---------------------------------------------------------------------------------------------7 15. Organizational Structure--------------------------------------------------------------------------------------8 16. Personnel Functions and Qualifications-------------------------------------------------------------------9 17. Feasibility Study Timetable----------------------------------------------------------------------------------16 18. Feasibility Study Gantt chart---------------------------------------------------------------------------------18
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III MARKET ASPECT
19. Product Description-------------------------------------------------------------------------------------------20 20. Target Demand-------------------------------------------------------------------------------------------------20 21. Historical Data--------------------------------------------------------------------------------------------------21 22. Projected Population------------------------------------------------------------------------------------------21 23. Demand Analysis-----------------------------------------------------------------------------------------------22 24. Projected Demand---------------------------------------------------------------------------------------------22 25. Supply Analysis--------------------------------------------------------------------------------------------------23 26. Historical Data of Supply--------------------------------------------------------------------------------------24 27. Projected Supply------------------------------------------------------------------------------------------------24 28. Demand and Supply Analysis---------------------------------------------------------------------------------25 29. Supply, Market Share and New Gap for School Year 2013-2014-----------------------------------26 30. Supply, Projected Market Share and New Gap for School Year 2014-2015----------------------27 31. Supply, Projected Market Share and New Gap for School Year 2015-2016----------------------28 32. Supply, Projected Market Share and New Gap for School Year 2016-2017----------------------29 33. Supply, Projected Market Share and New Gap for School Year 2017-2018----------------------30 34. Supply, Projected Market Share and New Gap for School Year 2017-2018----------------------31 35. Product Selling Price------------------------------------------------------------------------------------------32 36. Market Program and Strategy-----------------------------------------------------------------------------33
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IV TECHNICAL ASPECT
37. The Product------------------------------------------------------------------------------------------------------35 A. Nutrition Facts of Fruits and Vegetables---------------------------------------------------------36 38. Product Ingredients--------------------------------------------------------------------------------------------38 39. The Manufacturing Process---------------------------------------------------------------------------------45 40. Qualitative Flow Diagram-----------------------------------------------------------------------------------49 41. Quantitative Flow Diagram----------------------------------------------------------------------------------50 42. Production Capacity and Operation Schedule-----------------------------------------------------------53 43. Equipments------------------------------------------------------------------------------------------------------53 44. Utensils and Materials----------------------------------------------------------------------------------------54 45. Store Location---------------------------------------------------------------------------------------------------55 46. Stall layout-------------------------------------------------------------------------------------------------------56 47. Raw Materials for Gelatin-------------------------------------------------------------------------------------57 48. Raw Materials for Verdi Smoothie--------------------------------------------------------------------------57 49. Raw Materials for CAO Smoothie --------------------------------------------------------------------------58 50. Raw Materials for Pia-Banana Smoothie----------------------------------------------------------------58 51. Utilities------------------------------------------------------------------------------------------------------------59 52. Waste Disposal Procedure-----------------------------------------------------------------------------------60 53. Labor Requirement--------------------------------------------------------------------------------------------60 54. Safety and Maintenance-------------------------------------------------------------------------------------61 55. Total Production Cost-----------------------------------------------------------------------------------------61
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V SOCIO-ECONOMIC ASPECT 56. Agricultural-------------------------------------------------------------------------------------------------------62 57. Job Opportunities----------------------------------------------------------------------------------------------63 58. Standard of Living----------------------------------------------------------------------------------------------64 59. Healthy Living--------------------------------------------------------------------------------------------------65 60. Environmental Considerations------------------------------------------------------------------------------67 61. Government----------------------------------------------------------------------------------------------------68 VI FINANCIAL ASPECT 62. Financial Basis--------------------------------------------------------------------------------------------------69 63. Total Project Cost----------------------------------------------------------------------------------------------70 64. Pre-operating Expenses Breakdown------------------------------------------------------------------------71 65. Working Capital-------------------------------------------------------------------------------------------------71 66. Monthly Cash Flow Statement from November 2013 to March 2014-----------------------------72 67. Monthly Income Statement from November 2013 to March 2014---------------------------------73 68. Monthly Balance Sheet from November 2013 to March 2014 -------------------------------------74 69. Frugies Smoothies Production Monthly Cost of Goods Sold Schedule November 2013 to March 2014------------------------------------------------------------------------75
70. Frugies Smoothies Production Direct Material Schedule November 2013 to March 2014-----------------------------------------------------------------------76
71. Financial Analysis for Actual Financial Statement------------------------------------------------------77 72. Test of Profitability--------------------------------------------------------------------------------------------77 a. Gross Profit Margin-----------------------------------------------------------------------------------77
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b. Net Profit Margin--------------------------------------------------------------------------------------78 73. Assets Turnover------------------------------------------------------------------------------------------------79 a. Total Assets Turnover---------------------------------------------------------------------------------79 74. Test of Capital Investment -----------------------------------------------------------------------------------80 a. Return on Investment---------------------------------------------------------------------------------80 b. Payback Period------------------------------------------------------------------------------------------81 75. Break-even Analysis--------------------------------------------------------------------------------------------82 76. Cost Structure and Operating Leverage-------------------------------------------------------------------83 77. Financial Assumption------------------------------------------------------------------------------------------84 78. Frugies Smoothies Production Projected Annual Cash Flow Statement SY 2013-2014 to SY 2018-2019-------------------------------------------------------------------------85 79. Frugies Smoothies Production Projected Annual Income Statement SY 2013-2014 to SY 2018-2019------------------------------------------------------------------------86 80. Frugies Smoothies Production Projected Annual Balance Sheet SY 2013-2014 to SY 2018-2019------------------------------------------------------------------------87 81. Frugies Smoothies Production Projected Annual Cost of Goods Sold SY 2013-2014 to SY 2018-2019------------------------------------------------------------------------88 82. Frugies Smoothies Production Projected Annual Direct Material Schedule SY 2013-2014 to SY 2018-2019------------------------------------------------------------------------89 83. Financial Analysis for Projected Financial Statement-------------------------------------------------90 84. Test of Profitability--------------------------------------------------------------------------------------------90 a. Gross Profit Margin-----------------------------------------------------------------------------------90 b. Net Profit Margin------------------------------------------------------------------------------------91
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85. Assets Turnover------------------------------------------------------------------------------------------------92 a. Total Assets Turnover---------------------------------------------------------------------------------92 86. Test of Capital Investment -----------------------------------------------------------------------------------93 a. Return on Investment---------------------------------------------------------------------------------93 b. Payback Period------------------------------------------------------------------------------------------94 87. Break-even Analysis--------------------------------------------------------------------------------------------95 88. Cost Structure and Operating Leverage-------------------------------------------------------------------96
VII CONCLUSION 89. Conclusions and Recommendations-----------------------------------------------------------------------97
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Introduction Fruit and Vegetable Juice is a non-alcoholic beverage and is primarily made of extracted and blended fruits and vegetables concentrates. Popular in Western countries, where people usually make it at their homes with a juicer machine or they purchase it in cans, in bottles and freshly made in restaurants for convenience. In the Philippines it can be purchased on some restaurants that offer this kind of beverage. It became popular nowadays because people are now being conscious about health and wellness and for diet reasons. Working people, mothers with active children and students are always looking for a quick, tasty, healthy alternative for lunch or a mid-afternoon infusion of energy. These are the reasons that make it a potential product to be introduced in the market. As more people continue to turn toward natural and wholesome food and drinks. Fruit and vegetable juice have great potential for providing a healthy, refreshing and nutritious drink. Frugies, a mixed fruit and vegetable smoothie, the proposed product that the researchers will introduce in the market, were the target market are the students, administrative staffs and faculty members of Western Mindanao State University main campus. Frugies is a product that the students can afford to buy, a smoothie that has a lot of nutrients that young and old people will benefit and will surely love. In a stressful and hectic schedule of students, Frugies would be the best drink that could boost their immune system against sickness. The researcher decided to produce smoothie instead of juice as an innovation to the usual juices that are commonly offered. Frugies contains Malunggay, a vegetable known to be A miracle tree and a powerful anti-cancer and rich in anti oxidant that slows the aging process.
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Project Title: A Project Feasibility Study on Mixed Fruits and Vegetable Smoothie Production Proposed Name of Firm: Frugies Smoothies Production Type of Business Organization: Sole Proprietorship Project Proponents/Researchers: Arranguez, Princess D. Dinaga, Raquel F. Librada, Maribeth Repollo, Maricar T. Reyes, Kate Kathelyn L. Usman, Rashida H.
Project Location: The proposed project location will be at Western Mindanao State University Campus A, located at Normal Road, Baliwasan, Zamboanga City
Total Project Cost: The project cost is Php9,436.21
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Mission Frugies Smoothies Production, as a source of healthy mixed fresh fruit and vegetable smoothie, adhere strict implementation of safety methods for consumers concern and to promote further development of manufacturing operations to ensure customers satisfaction.
Vision To achieve the highest standard desired and required in the production operation of mixed fresh fruit and vegetable fruit drinks that will make Frugies Smoothies Production products acceptable in Zamboanga City and also competitive in the national market. Objectives To be the leading producer of mixed fresh fruit and vegetable smoothies in Zamboanga City and be more competitive in the market.
Short Term Objectives To develop and maintain a good relationship with the consumers and the people of Western Mindanao State University To provide staff and students of Western Mindanao State University a healthy drink To be the number one producer of fruit and vegetable smoothie
Long Term Objectives To be one of the most successful and most influential healthy drink producers in Zamboanga City To be an excellent company here in the Philippines that will expand its business in the other parts of the country and become the pride of Zamboanga City To be nationally and globally competitive in producing an excellent smoothie products
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Specific Objectives Marketing Aspect To ensure that the product will be promoted in a good way in which it can penetrate the market To determine the competitive advantage of the product To be more creative in attracting customers To guarantee that the chosen promotional campaigns will not only benefit the company but also the customers who will purchase the product
Management Aspect Focus on needs of our consumers Get out into the market, listen, observe, and learn Determine the factors that create demand for our product, and forecasting its potential demand Focus on execution in the marketplace every day To attain the companys aim and purpose To focus on the employees, their jobs, benefits and salaries, and tasks that will be done before starting the business
Technical Aspect To get rid of uncertainties in operation and production To scheme the overall process in the production To ensure the safety and benefits of the customers
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Socio Economic Aspect
To discuss the benefits of all the stakeholders involved in the operation of the business. To have an environmental friendly procedure. To showcase the ability of the workforce of the students of Industrial and Management Engineering
Financial Aspect To have gain information about the financial status of the business To be able to figure out how the business deals with the trend of demand and supply within the circulation of the business. To assure that the business is profitable and feasible.
Limitations and Scope of the Study The study focuses on the establishment of mixed fruit and vegetable smoothie production in Zamboanga City. Five aspects were presented in this study which includes the Organizational and Management Aspect, the Marketing Aspect, the Technical Aspect, the Socio- Economic and the Financial Aspect. The proposed product will be sold at Western Mindanao State University targeting the students, faculty members and administrative personnel of the Tertiary, Secondary and Elementary Education Department both from campus A and B. The product will be made to order which the researchers company will also focus on exclusive supplying of smoothies for the different student activities through the organization officers.
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Highlights of the Study Fresh mixed fruit and vegetable smoothie is not the usual drink that the researchers will introduce in the market, were the market are the students, faculty members and administrative personnel, in that case the study has an edge on promoting healthy lifestyle and the habit on drinking healthy fresh mixed fruit and vegetable smoothie daily that begins in the school. The researchers assures that the taste of the product will be more exciting and suits the taste of each customers, were one of the ingredients is vegetable.
The customers will surely be curious of what will be the taste of the product and make the product trend in the market.
Methodology The study was conducted with the use of primary and secondary data. Primary data were obtained by conducting surveys to the target market were the researchers gathered reliable data and by conducting interviews to every canteen within the vicinity. While the secondary data were gathered from reliable sources such as NFRI, DAR, DOST, MISTO.
Leadership Strategy The researchers used the leadership strategy were process of strategic leadership begins with people. Managing change through uncertainty requires strategic leaders who possess and communicate a clear path of direction and alignment within their workgroups to achieve the desired outcomes.
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Form of Ownership The proposed business will be a Sole Proprietorship type of business. The owner will be the manager of the business. This type of business is easy to set-up because of the following advantages: Ease in business commencement Absolute control Avoidance of double taxation Ease in business dissolution
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Figure 1.1 Organizational Structure The proposed business has 10 positions. But it will be handled by 6 individuals in actual operation for the mean time due to financial capability; some positions will be handled by a single person.
Manager Production Supervisor Receiving Personnel Production Crew Finance Supervisor Accountant Purchasing Officer Cashier Sales and Marketing Supervisor Promotional and Advertising Staff 8 Western Mindanao State University Department of Industrial and Management Engineering 19
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Personnel Functions and Qualifications In the field of business before it starts to operate, Human Resource management perform recruitment and selection of new employees who are qualified for the job description but for the mean time the manager will be in charge of the hiring, since the manager is also the owner of the business. The business will be handled by 6 individuals. The qualified positions and description that are listed in the organizational structure are divided into six (6) persons. For the mean time, as a new contributor in the field of business, the researchers will be the one who will handle and take over the positions. All six members will be work six times a week during the initial run of the business. As the business grows, it will employ necessary number of individuals that the company needs. They will be hired according to the qualifications prescribed position.
1. One person will assume the role of Manager/Production Supervisor. Specifically his/her roles are as follows:
Manager - is a person who manages the work of others in order to run a business efficiently and make a large profit. He or she should have working knowledge of the areas under her, and may be a specialist in one or more. She manages everything that goes in and out of the company. She has the sole right for overall management of the authority and has the control to all personnel in the plant. She must also be responsible in keeping, recording and filling out papers and confidential documents of the company.
Qualifications: Must be a graduate of any business related course such as (BS Industrial Management Engineering, BS Management, BS Business Administration) Female/Male, preferably 25-35 years of age. At least two years experience in manufacturing and service industry.
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Production Supervisor - is the one responsible to oversee the day-to-day operations in the company and as well as manages workers on production line. She monitors the means of production to ensure that they are operating smoothly, and they check the products for defects and as well as determining quality control standards.
Qualifications: Must be a graduate of any business related course. Female, preferably 25-35 years of age. Expertise on integral planning, product design, purchasing processes and production scheduling. Must have at least two years of working experience in the related field.
2. One person will assume the role of Production Crew/Receiving Personnel. Specifically his/her roles are as follows:
Production Crew is in charge of preparing smoothie before it goes out to the customers. Specific duty vary, but typically include clearing off and setting Juicers/Blenders, stocking supplies and as well as washing or cleaning the juicers/blenders and utensils.
Qualifications: Must have a High School Diploma. Male/Female, preferably 25-30 years old. Must have at least one year experience in related field With good moral character Health Certificate from CHO (City Health Office)
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Receiving Personnel - is responsible for the verification and recording of raw materials and generally review purchase order.
Qualifications: Must have a High School Diploma Male/Female, preferably 25-30 years old. Able to demonstrate basic math and organizational skills. Must have an experience in customer service or inventory checking positions With Good moral Character
3. One person will assume the role of Finance Supervisor/Production Crew. Specifically his/her roles are as follows: Finance Supervisor is responsible for maintaining financial, accounting, administrative and personnel services in order to meet legislative requirements and support municipal operations. Finance Supervisor must administer and monitor the financial system in order to ensure that the municipal finances are maintained in an accurate and timely manner. Qualifications: Certified Public Accountant Female, preferably 25-35 years of age With at least 2 years of working experience in the related field Must have computer skills including the ability to operate computerized accounting, spreadsheet and word processing programs at a highly proficient level Must possess cultural awareness and sensitivity. 11 Western Mindanao State University Department of Industrial and Management Engineering 22
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Production Crew is in charge of preparing smoothie before it goes out to the customers. Specific duty vary, but typically include clearing off and setting Juicers/Blenders, stocking supplies and as well as washing or cleaning the juicers/blenders and utensils.
Qualifications: Must have a High School Diploma. Male/Female, preferably 25-30 years old. Must have at least one year experience in related field. With good moral character.
4. One person will assume the role of Accountant/Receiving Personnel. Specifically his/her roles are as follows: Accountant is responsible for analyzing financial information and prepare financial reports such as compiling and analyzing financial information to prepare entries to accounts, such as general ledger accounts, documenting business transactions. Accountant analyzes financial information detailing assets, liabilities, capital, and prepares balance sheet, profit and loss statement, and other reports to summarize current and projected company financial position, using calculator or computer. Qualifications: Certified Public Accountant Female, preferably 25-35 years of age. With at least 2 years of working experience in the related field Must possess analytical skills in order to analyze certain discrepancies on a balance sheet or income statement Detail oriented-- Accountants have to compile a lot of figures to construct balance sheets and income statements. Having the ability to compile a lot of information and then interpret the 12 Western Mindanao State University Department of Industrial and Management Engineering 23
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meaning is something an accountant will have to do on a regular basis. Good Computer Skills. Must possess good moral character. Receiving Personnel is responsible for the verification and recording of raw materials and generally review purchase order. Qualifications: Must have a High School Diploma Male/Female, preferably 25-30 years old. Able to demonstrate basic math and organizational skills. Must have an experience in customer service or inventory checking positions With Good moral Character
5. One person will assume the role of Sales and Marketing Officer/Production Crew. Specifically his/her roles are as follows: Sales and Marketing Officer is the one responsible in marketing framework for successful positioning, promoting and distributing the products for the profitability of the business. Qualifications: Must be a graduate of any four year related business course Female, preferably 25-35 years of age With at least 2 year working experience in related field Good communication skills Must possess pleasing personality
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Production Crew is in charge of preparing smoothie before it goes out to the customers. Specific duty vary, but typically include clearing off and setting Juicers/Blenders, stocking supplies and as well as washing or cleaning the juicers/blenders and utensils. Qualifications: Must have a High School Diploma Male/Female, preferably 25-30 years old Must have at least one year experience in related field With good moral character
6. One person will assume the role of Purchasing Officer/Promotional and Advertising Staff/Production Crew. Specifically his/her roles are as follows: Purchasing Officer is the one responsible at some level for buying or approving the acquisition of goods and services needed by the company. The position responsibilities may be the same as that of a buyer or purchasing agent, or may include wider supervisory or managerial responsibilities. A Purchasing Manager may oversee the acquisition of materials needed for production, general supplies for offices and facilities, equipment, or construction contracts. Purchasing Officer seeks reliable vendors or suppliers to provide quality goods at reasonable prices. Qualifications: Must possess a four-year degree in any Business related course Female/ Male, preferably 25-30 years of age Minimum of 2 years of experience in related field Must have excellent interpersonal and negotiation skills, as her/his role is to receive the best possible product at the best possible price Should have great communication skills, both orally and in writing 14 Western Mindanao State University Department of Industrial and Management Engineering 25
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Should possess exceptional management skills, as she may oversee a team of people
Promotional and Advertising Staff is the one responsible for planning and directing advertising policies and programs or produce collateral materials, such as posters, contests, coupons, or give-away, to create extra interest in the purchase of a product or service for a department, an entire organization, or on an account basis. Qualifications: Must be a graduate of any business related course Female/male, preferably 23-35 of age With 1-2 years working experience in the field of marketing Good communication skills Pleasing personality Production Crew is in charge of preparing smoothie before it goes out to the customers. Specific duty vary, but typically include clearing off and setting Juicers/Blenders, stocking supplies and as well as washing or cleaning the juicers/blenders and utensils. Qualifications: Must have a High School Diploma Male/Female, preferably 25-30 years old Must have at least one year experience in related field With good moral character
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Table 1.1 Feasibility Study Timetable and Gantt chart Project Timetable Activities for 1 st Semester Date No. of weeks A. Grouping of members, assigning tasks, meeting among members of the group June 15 June 29 2 B. Gathering data of the given study, conducting survey, presentation of data gathered
June 29 - July 20
3 C. Preliminary presentation, Reviewing/Revising the draft presentation and consultation July 21 July 27 1 D. Re-conducting survey and evaluating the result on market aspect, Preliminary presentation of prototype July 28 - August10 2 E. Presentation of prototype per combination July 11- July 17 1 F. Computing of data, gathering data for Organizational and management, Technical aspect, presentation of O and M and Technical aspect
July 18 - August 24
1 G. Consultation of 2 aspects, gathering additional data August 25 - September 8 2 H. Revision of organizational and management and technical aspect September 9- October 15 5
I. Finalization and presentation of 3 aspects
October 16 October 27
2 J. Enrolment
October 28 - November 19
-- K. Opening of business operation
November 20 February 22
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L. Discussion and drafting on financial statement for the month of November and discussion on sensitivity analysis.
November 21 December 6
2 M. Submission and evaluation of financial statement for the month of November. Discussion on socio-economic and SWOT analysis orientation
December 7 - 20
2 N. Presentation of Expo materials (Brochures, layout and costing)
December 21January 3
2 O. Submission and evaluation of financial statement for the month of December.
January 4 - 10
1 P. SWOT analysis presentation and submission of financial statement for the month of January.
January 11 February 4
4 Q. Submission of Manuscript for final presentation.
February 5 24
3
R. Preparation for the final presentation
February 25 - 28
1 S. Final presentation to the faculty and submission of thesis manuscript for Expo use
March 1 6
1 T. IME Expo 2014 and preparation for the business evaluation.
March 7 - 14
1 Table 1.1 shows the activities for the school year 2013-2014
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Activity 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 A B C D E F G H I
Scheduled Activity s
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Work Finished Table 1.2 Gantt chart of the Time Table Presented s Legend: 18 Western Mindanao State University Department of Industrial and Management Engineering 29
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Activity 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 J K L M N O P Q R S T
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Product Description Fruit and Vegetable Juice is a non-alcoholic beverage popular in Western countries, where people can purchase it in aluminum cans, in bottles and freshly made in restaurants. In the Philippines it can be purchased on some restaurants that offer this kind of beverage. It became popular nowadays because people have increase awareness on health and wellness. Some are even very particular with the food they eat and beverage they drink. The researchers have decided to make it into smoothie instead of just a plain juice which makes it a potential viable product to be sold in the market.
The Target Demand The target demand of this study is the people of Campus A and Campus B of Western Mindanao State University which comprises of the students, members of the faculty and administrative personnel. There are about 19,171 individuals from Campus A and Campus B combined from school year 2013-2014. The products will be sold in an ordering basis where the seller makes and prepares the products while the customer waits, through a stall situated inside the campus where it is easily be accessible.
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HISTORICAL DATA
Table 2.1 Population of Western Mindanao State University (Year 2008 2013)
SCHOOL YEAR POPULATION 2008-2009 15,827 2009-2010 17,358 2010-2011 17,645 2011-2012 17,257 2012-2013 17,332 Source: MISTO WMSU Table 2.1 shows the historical data of enrollees who enrolled from 2008-2013 of the target university. The data will be used in projecting the population for the next five years.
Table 2.2 Projected Actual Population
SCHOOL YEAR PROJECTED POPULATION 2013-2014 19,171 2014-2015 18,247 2015-2016 18,538 2016-2017 14,490 2017-2018 15,075 2018-2019 19,411
Table 2.2 shows the projected population of the target university from 2013-2014 to 2018-2019. The population is computed using the four methods of projection and the projected values are taken from the method which has the least standard deviation which yields the realistic output. The population from school year 2013-2014 to 2015-2016 remains the same because only school year 2016-2017 until 2018- 2019 affected in the new curriculum of K to 12 program wherein no new freshmen are enrolled in the said school year. (Refer to annex A from table 1.0 to table 5.2)
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DEMAND ANALYSIS
Fig 2.1 Annual Per Capita Consumption of juice in the Philippines
Fig 2.1 shows the annual per capita consumption of juice in the Philippines based from Euromonitor. The data will be used to compute the projected demand of Western Mindanao State University.
Table 2.3 Projected Demand for Juice within the vicinity of WMSU
SCHOOL YEAR PROJECTED POPULATION ANNUAL PER CAPITA CONSUMPTION (L) PROJECTED DEMAND (L) 2013-2014 19,171 1 19,171.00 2014-2015 18,247 1 18,247.00 2015-2016 18,538 1 18,538.00 2016-2017 14,490 1 14,490.00 2017-2018 15,075 1 15,075.00 2018-2019 19,411 1 19,411.00 Table 2.3 shows the computation of the projected demand for juice within the vicinity of Western Mindanao State University by means of multiplying the total projected population per year to the annual per capita consumption which is 1 liter. The projected demand will be used to determine the total volume of juice that the university is consuming.
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SUPPLY ANALYSIS There are currently 16 present canteens that sell Juice beverage within the vicinity of Western Mindanao State University.
Table 2.4 Present Supply within the vicinity of Western Mindanao State University CANTEEN/OWNER'S NAME WEEKLY SUPPLY (L) DAILY SUPPLY (L) Janny Bee 1.985 0.331 Shanes Fastfood 2.262 0.377 Maimona Majid 11.000 1.833 Magsayo Store 3.358 0.560 Oliver 32.938 5.490 Pilang Cervantes 23.386 3.898 Flavours 17.854 2.976 Emanual Canteen ( Jane D. Baroquillo) 18.000 3.000 WMSU Coop Canteen #8 (April Delos Reyes) 32.125 5.354 Antonieta Dumen 4.180 0.697 Social Work Canteen (Ester Carpizo) 12.700 2.117 Islamic Canteen (Arnalyn Ibrahim) 11.020 1.837 Forestry Canteen (Ginton Michael O. Locson) 3.320 0.553 Merciana 83.000 13.833 Mercedes Domocol 17.825 2.971 WMSU Coop #3 2.250 0.375 TOTAL 277.203 46.201 GRAND TOTAL (year) 10,949.530 10,949.530
Table 2.4 shows the total volume supply of juice in the vicinity of Western Mindanao State University. The data was then computed in terms of weekly supply with a total volume of 277.203 L per week and was converted into daily supply by dividing the weekly supply by 6. The total volume of juice in a year for the supply is 10,949.530 L per year which is obtained by multiplying the weekly supply by 39.5 and 237 for the daily supply.
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Table 2.5 Historical Data of Supply within the vicinity of Western Mindanao State University SCHOOL YEAR YEARLY GROWTH RATE YEARLY SUPPLY (L) 1990-2009 - 4,205.86 2009-2010 4% 4,368.08 2010-2011 17% 5,093.86 2011-2012 22% 6,203.46 2012-2013 22% 7,589.45 2013-2014 44% 10,949.53
Table 2.5 shows the details of the yearly supply of canteens within the vicinity of WMSU since 1990 until the present. The data will serve as the historical supply of the target university which was obtained by subtracting the present year to the previous year divided by the previous year by using the growth rate. Refer to annex A Table 5.3 for the computation.
Table 2.6 shows the projected supply which is based on the computation using Statistical Straight Line method which yields the realistic output. (See ANNEX A table 5.3 to table 6.4.1 for computation of projected supply) 24 Western Mindanao State University Department of Industrial and Management Engineering 36
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Table 2.7 shows the volume of the unsatisfied demand or the gap per school year. The projected supply is subtracted from the projected demand to identify the unsatisfied demand. The unsatisfied demand will be used in determining the market share of the company. The demand-supply analysis is from school year 2013-2014 to 2018-2019. 25 Western Mindanao State University Department of Industrial and Management Engineering 37
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Figure 2.2 Supply, Market Share and New Gap for School Year 2013-2014
Figure 2.2 shows the total demand of 19,171.00 L for the school year 2013-2014. The supply for this school year is 8,072.91 L and the unsatisfied demand is 11,098.09 L. The company will get 1,759.73 L of the total demand which leaves 9,866.36 L as the new gap. The companys market share is base from the capacity of the company provided in Table 3.1 page 53.
42% 9% 49% Total Demand of 19,171.00 L Supply (8,072.91 L) Market Share(1,759.73 L) New Gap (9,338.36 L) 26 Western Mindanao State University Department of Industrial and Management Engineering 38
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Figure 2.3 Supply, Projected Market Share and New Gap for School Year 2014-2015
Figure 2.3 shows the total demand of 18,247.00 L for the school year 2014-2015. The supply for this school year is 8,933.17 L and the unsatisfied demand is 9,313.83 L. The company will get 2,652.92 L of the total demand which leaves 6,660.91 L as the new gap. The companys market share is base from the capacity of the company provided in Table 3.1 page 53.
49% 15% 36% Total Demand of 18,247.00 L Supply (8,933.17) Market Share (2,652.92 L) New Gap (6,660.91 L) 27 Western Mindanao State University Department of Industrial and Management Engineering 39
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Figure 2.4 Supply, Projected Market Share and New Gap for School Year 2015-2016
Figure 2.4 shows the total demand of 18,538.00 L for the school year 2015-2016. The supply for this school year is 9,793.42 L and the unsatisfied demand is 8,744.58 L. The company will get 3,546.11 L of the total demand which leaves 5,198.47 L as the new gap. The companys market share is base from the capacity of the company provided in Table 3.1 page 53.
53% 19% 28% Total Demand of 18,538.00 L Supply (9,793.42 L) Market Share (3,546.11 L) New Gap (5,198.47 L) 28 Western Mindanao State University Department of Industrial and Management Engineering 40
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Figure 2.5 Supply, Projected Market Share and New Gap for School Year 2016-2017
Figure 2.5 shows the total demand of 14,490.00 L for the school year 2016-2017. The supply for this school year is 10,653.68 L and the unsatisfied demand is 3,836.32 L. The company will get 4,439.31 L of the total demand which leaves -602.99 L as the new gap or no gap at all because the market share is higher than the gap. The companys market share is base from the capacity of the company provided in Table 3.1 page 53.
68% 28% -4% Total Demand of 14,490.00 L Supply (10,653.68 L) Market Share (4,439.31 L) New Gap (-602.99 L) 29 Western Mindanao State University Department of Industrial and Management Engineering 41
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Figure 2.6 Supply, Projected Market Share and New Gap for School Year 2017-2018
Figure 2.6 shows the total demand of 15,075.00 L for the school year 2017-2018. The supply for this school year is 11,513.93 L and the unsatisfied demand is 3,561.07. The company will get 5,332 L of the total demand which leaves -1,771.43 L as the new gap or no gap at all because the market share is higher than the gap. The companys market share is base from the capacity of the company provided in Table 3.2 page 53.
62% 29% -11% Total Demand of 15,075.00 L Supply (11,513.93 L) Market Share (5,332.5L) New Gap (-1,771.43 L) 30 Western Mindanao State University Department of Industrial and Management Engineering 42
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Figure 2.7 Supply, Projected Market Share and New Gap for School Year 2018-2019
Figure 2.7 shows the total demand of 19,411.00 L for the school year 2018-2019. The supply for this school year is 12,374.19 L and the unsatisfied demand is 7,036.81 L. The company will get 6,225.70 L of the total demand which leaves 811.12 L as the new gap. The companys market share is base from the capacity of the company provided in Table 3.2 page 53.
64% 32% 4% Total Demand of 19,411.00 L Supply (12,374.19 L) Market Share (6,225.70 L) New Gap (811.12 L) 31 Western Mindanao State University Department of Industrial and Management Engineering 43
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Table 2.7 Product Selling Price
Verdi Smoothie Amount CAO Smoothie Amount Pia-Banana Smoothie Amount Production cost per unit P15.70 P16.40 P11.28 Markup P 4.30 (21.50%) P 3.60 (18%) P 8.72 (43.60%) Selling price per cup P20 P20 P20
Table 2.7 shows the selling price per cup, it is based from the production cost. The mark up is 21.50% for Verdi smoothie, 18% for CAO smoothie and Pia-banana smoothie 43.60% were the profit is P4.30 for Verdi smoothie,P3.60 for CAO smoothie and P8.72 for Pia-Banana smoothie.
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Market Program and Strategy As a new contributor in the business industry the market strategy will be applied to the students, administrative staff and faculty member were school is the best location to start with, because now a days people are already outspoken and involved on what is happening in the society specially the young once in terms of things that are unusual like our product Mixed Fruit and Vegetable Smoothie. In that case our product will be easily known in the university and also outside the campus. Product Mixed fruit and vegetable smoothie contains 250ml of smoothie per cup, the product are new to the target location so it is not difficult to market and the quality of the product are rest assured to be safe to consume.
Promotion
The company believes and is confident on the capability of Promotional and Advertising Staff who plans and secures the implementation of the promotional activities. One of which is the establishment of partnership between school organizations aiming to be the official supplier of healthy drinks for their activities. This helps a lot because some students want to try the product but has no means to afford to buy it, so through organizations they can have it for free. The following are other promotional activities that the company will do:
Online Advertisement
The company saw the potential of online advertisement through social media websites such as Facebook and Twitter and will take advantage of it. There will be a creation of a company account for the product. This will not only introduce the product easily on the market through social media, but also people can give feedbacks or testimonials about the product and the different tastes. The researchers had created a Facebook page for the company 33 Western Mindanao State University Department of Industrial and Management Engineering 45
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(https://www.facebook.com/frugies?ref=br_rs) where customers can make a call regarding the product and will answer their complaints promptly and make consumers happy, whenever possible, with a speedy apology, a refund, and a discount on future purchases or an exchange. Sharing of photos with information can also be helpful by creating an appeal to the target clients.
Personal Endorsement
These are the following personal endorsement can be use to market the product, first is the Words of Mouth and by building personal relation to customers in verbal form. Through giving free taste of the product, possible consumers can give testimonials about it and provide information to the others. Second is by building personal relation to customers, it can help to gain customers trust to the company.
Tarpaulins and Brochures
Tarpaulin is a very useful tool to catch the attention of the market. The material is durable and can be used repeatedly. The information about the company and the products can be published through tarpaulins. People want printed material to take home and read at their leisure. It can direct them to the web page provided, but a brochure adds a personal touch, tells the prospect what the product or service can do for them and why they should buy from you. Brochures also support other advertising, direct mail, online promotions, and can be used as a sales tool by distributors. In short, a good brochure sells. The actual cost of tarpaulin the researchers had used is Php 133.00 in which the size is 2x3 ft while the brochure cost Php 20.00 per piece in which the size is 8.5 x 11 inches. 34 Western Mindanao State University Department of Industrial and Management Engineering 46
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The Product Mixed Fruit and Vegetable Smoothie is primarily made of fresh fruits and vegetable blended together. It is rich in nutrients that have unique healthy promoting compounds, vitamins and minerals that are essential for optimum health, benefiting for the body, such as vitamin A, protein, vitamin C, anti-oxidants, potassium and iron. One cup (250ml) per serving of Mixed Fruit and Vegetable Smoothie can give 30 vitamins and minerals to supply the nutrients needed of the body. Frugies a product name has a volume of 250ml which is equivalent to 1 cup. The product has three combinations of smoothies which are the Apple-Orange Smoothie with Malunggay gelatin, Apple-Carrots-Orange Smoothie with Malunggay gelatin, and the Banana- Pineapple Smoothie with Malunggay Gelatin. The 3 combination were added with evaporated milk and a little of refined sugar to make it more suitable to the customers taste. Smoothies will stay fresh in the refrigerator for up to 3 hours, but it will lose some nutrients as it sits in the fridge, the ideal temperature for the smoothie to last for 3 hour is (4C-6C) but if smoothie expose to a normal room temperature it can only last for about 30 minutes. It will not also taste as fresh after the first 3 hours and water separation may occur. Personally, the researcher dont like the way smoothies taste after the said time.
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Figure 3.1 Nutrition Facts of Fruits and Vegetables
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Continuation of Figure 3.1 Nutrition Facts of Fruits and Vegetables 37 Western Mindanao State University Department of Industrial and Management Engineering 50
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1. Apple-Orange Smoothie with Malunggay Gelatin (Verdi Smoothie) The ingredients are Fuji Apple, Orange juice extract, ice cubes, refined sugar, evaporated milk, and Malunggay gelatin as the additive. The ingredients for the Malunggay gelatin are Malunggay broth, Buko Pandan flavored Gelatin powder, water, refined sugar and evaporated milk. The nutritional facts that the Apple-Orange Smoothie with Malunggay gelatin can provide are iron, calcium, potassium, manganese, magnesium, vitamin A, vitamin B, vitamin C, folate, thiamin and protein. 2. Apple-Carrots-Orange Smoothie with Malunggay Gelatin (CAO Smoothie) The ingredients for the second combination on smoothie are Fuji Apple, Carrot juice extract, Orange juice extract, ice cubes, refined sugar, evaporated milk, and Malunggay gelatin as the additive. The nutritional facts that Apple-Carrots-Orange Juice with Malunggay gelatin can provide are calcium, potassium, iron, manganese, magnesium, vitamin A, vitamin B, vitamin C, folate, thiamin, beta-carotene and protein. 3. Banana-Pineapple Smoothie with Malunggay Gelatin (Pia-Banana Smoothie) The ingredients for the smoothie were ripe Banana, Pineapple , ice cubes, refined sugar, and evaporated milk and Malunggay gelatin as the additive. The nutritional facts that the Banana-Pineapple Smoothie with Malunggay gelatin can provide are potassium, magnesium, manganese, fiber, vitamin A, vitamin B1, vitamin C, calcium, foliate, iron and protein.
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Product Ingredients The study came up with three different kinds of products with four different kinds of fruits and two different kinds of vegetables to be mixed. Apple Orange Smoothie with Malunggay Gelatin (Verdi Smoothie) 1. Apple fruit The apple is the pomaceous fruit of the apple tree, species Malus domestica in the rose family (Rosaceae). It is one of the most widely cultivated tree fruits, and the most widely known of the many members of genus Malus that are used by humans. Apples grow on small, deciduous trees. Specifically, the researcher had used the Fuji Apple because it has a very long shelf life compared to other apples, even without refrigeration. It also contains between 911% sugars by weight but still nutritious. 2. Orange fruit An orange is a type of citrus fruit which people often eat. Oranges are a very good source of vitamins, especially vitamin C. Orange juice is an important part of many people's breakfast. The "sweet orange", which is the kind that is most often eaten today, grew first in Asia but now grows in many parts of the world. The researchers have used Ponkan in its product because of its more orangy taste.
3. Malunggay leaves Moringa also known as the Miracle Tree is a multipurpose plant, were the leaves, pods, fruits, flowers, roots and bark of the tree can be utilized. It is also referred to as Drumstick Tree by the Britishers. In the Philippines, they are referred to as malunggay or malungay. Others refer to moringa as horseradish tree, benzolive tree, kelor, marango, mlonge, moonga, nbday, saijhan, sajna or Ben oil tree. Moringa leaves contain: seven times the vitamin C in oranges, four times the Calcium in milk, four times the vitamin A in carrots, two times the protein in milk and three times the Potassium in bananas.
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4. Buko Pandan Flavored Gelatin powder Gelatin (or gelatin, from Latin: gelatus = stiff, frozen) is a translucent, colorless, brittle (when dry), flavorless solid substance. The researchers have used the flavored powdered gelatin, specifically Buko-Pandan flavor, because it gives an appealing taste in our products. These can be purchased in any grocery stores.
5. Refined sugar Sugar is one of the most popular sweeteners used today. From baked goods to beverages, this all-purpose sweetener has been a favorite for centuries. Sugar is the crystallized sucrose extracted from sugarcane . After harvesting the sugarcane or sugar beets, the juice is extracted and boiled down to remove moisture. As the moisture diminishes, the natural sucrose in the juice begins to crystallize. The crystallized sugar is removed, leaving other extracts behind in the form of molasses. 6. Evaporated Milk Evaporated milk, also known as dehydrated milk, is a shelf-stable canned milk product with about 60% of the water removed from fresh milk. It differs from sweetened condensed milk, which contains added sugar. The researchers have used the canned evaporated milk that can be purchased in any grocery stores. 7. Ice cubes An ice cube is a small, roughly cube-shaped piece of ice (frozen water), conventionally used to cool beverages. Ice cubes are sometimes preferred over crushed ice because they melt more slowly; they are standard in mixed drinks that call for ice, in which case the drink is said to be "on the rocks."
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Apple Carrot Orange Juice with Malunggay Gelatin (CAO Smoothie) 1. Apple fruit The apple is the pomaceous fruit of the apple tree, species Malus domestica in the rose family (Rosaceae). It is one of the most widely cultivated tree fruits, and the most widely known of the many members of genus Malus that are used by humans. Apples grow on small, deciduous trees. Specifically, the researcher had used the Fuji Apple because it has a very long shelf life compared to other apples, even without refrigeration. It also contains between 911% sugars by weight but still nutritious.
2. Orange fruit An orange is a type of citrus fruit which people often eat. Oranges are a very good source of vitamins, especially vitamin C. Orange juice is an important part of many people's breakfast. The "sweet orange", which is the kind that is most often eaten today, grew first in Asia but now grows in many parts of the world. The researchers have used Ponkan in its product because of its more orangy taste. 3. Carrot Carrots are popular root vegetable that are easy to grow in sandy soil. They are resistant to most pests and diseases, and are a good late season crop that can tolerate frost. Not all carrots are orange; varieties vary in color from purple to white. The researchers have used the orange-colored carrot variety.
4. Malunggay leaves Moringa also known as the Miracle Tree is a multipurpose plant, were the leaves, pods, fruits, flowers, roots and bark of the tree can be utilized. It is also referred to as Drumstick Tree by the Britishers. In the Philippines, they are referred to as malunggay or malungay. Others refer to moringa as horseradish tree, benzolive tree, kelor, marango, mlonge, moonga, nbday, saijhan, sajna or Ben oil tree. Moringa leaves contain: seven 41 Western Mindanao State University Department of Industrial and Management Engineering 54
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times the vitamin C in oranges, four times the Calcium in milk, four times the vitamin A in carrots, two times the protein in milk and three times the Potassium in bananas.
5. Buko Pandan Flavored Gelatin powder Gelatin (or gelatin, from Latin: gelatus = stiff, frozen) is a translucent, colorless, brittle (when dry), flavorless solid substance. The researchers have used the flavored powdered gelatin, specifically Buko-Pandan flavor, because it gives an appealing taste in our products. These can be purchased in any grocery stores. 6. Refined Sugar Sugar is one of the most popular sweeteners used in American kitchens today. From baked goods to beverages, this all-purpose sweetener has been a favorite for centuries. Sugar is the crystallized sucrose extracted from either sugarcane. After harvesting the sugarcane or sugar beets, the juice is extracted and boiled down to remove moisture. As the moisture diminishes, the natural sucrose in the juice begins to crystallize. The crystallized sugar is removed, leaving other extracts behind in the form of molasses.
7. Evaporated Milk Evaporated milk, also known as dehydrated milk, is a shelf-stable canned milk product with about 60% of the water removed from fresh milk. It differs from sweetened condensed milk, which contains added sugar. The researchers have used the canned evaporated milk that can be purchased in any grocery stores.
8. Ice cubes An ice cube is a small, roughly cube-shaped piece of ice (frozen water), conventionally used to cool beverages. Ice cubes are sometimes preferred over crushed ice because they melt more slowly; they are standard in mixed drinks that call for ice, in which case the drink is said to be "on the rocks."
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Banana Pineapple Smoothie with Malunggay Gelatin (Pia-Banana Smoothie) 1. Ripe Banana A banana is an edible fruit produced by several kinds of large herbaceous flowering plants of the genus Musa. In some countries, bananas used for cooking may be called plantains. The fruit is variable in size, color and firmness, but is usually elongated and curved, with soft flesh rich in starch covered with a rind which may be green, yellow, red, purple, or brown when ripe. The researcher used Latundan banana.
2. Pineapple fruit Pineapple is a wonderful tropical fruit having exceptional juiciness, vibrant tropical flavor and immense health benefits. Pineapple contains considerable calcium, potassium, fiber, and vitamin C. It is low in fat and cholesterol.
3. Malunggay leaves Moringa also known as the Miracle Tree is a multipurpose plant, as the leaves, pods, fruits, flowers, roots and bark of the tree can be utilized. It is also referred to as Drumstick Tree by the Britishers. In the Philippines, they are referred to as malunggay or malungay. Others refer to moringa as horseradish tree, benzolive tree, kelor, marango, mlonge, moonga, nbday, saijhan, sajna or Ben oil tree. Moringa leaves contain: seven times the vitamin C in oranges, four times the Calcium in milk, four times the vitamin A in carrots, two times the protein in milk and three times the Potassium in bananas. 4. Buko Pandan Flavored gelatin powder Gelatin (or gelatin, from Latin: gelatus = stiff, frozen) is a translucent, colorless, brittle (when dry), flavorless solid substance. The researchers have used the flavored powdered gelatin, specifically Buko-Pandan flavor, because it gives an appealing taste in our products. These can be purchased in any grocery stores.
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4. Refined Sugar Sugar is one of the most popular sweeteners used in American kitchens today. From baked goods to beverages, this all-purpose sweetener has been a favorite for centuries. Sugar is the crystallized sucrose extracted from sugarcane. After harvesting the sugarcane or sugar beets, the juice is extracted and boiled down to remove moisture. As the moisture diminishes, the natural sucrose in the juice begins to crystallize. The crystallized sugar is removed, leaving other extracts behind in the form of molasses.
5. Evaporated Milk Evaporated milk, also known as dehydrated milk, is a shelf-stable canned milk product with about 60% of the water removed from fresh milk. It differs from sweetened condensed milk, which contains added sugar. The researchers have used the canned evaporated milk that can be purchased in any grocery stores.
6. Ice cubes An ice cube is a small, roughly cube-shaped piece of ice (frozen water), conventionally used to cool beverages. Ice cubes are sometimes preferred over crushed ice because they melt more slowly; they are standard in mixed drinks that call for ice, in which case the drink is said to be "on the rocks.
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Manufacturing Process The manufacturing process of mixed fruit and vegetable smoothie is in made to order basis with 3 different combinations. The process of preparing the fruit and vegetable smoothie is by extracting the juice from the fruit and vegetable specifically the orange and carrot, and blending it together with other fruits adding Malunggay gelatin as an additive. The smoothie will be put into 8oz cups with plastic lid cover for food safety and straw. 1. Apple-Orange Smoothie with Malunggay Gelatin (Verdi Smoothie) a. Washing Wash the 232.5g of fuji apple as well as the 300 g of ponkan orange to remove the dirt, pesticide or else the chemicals present. Do not use hot nor freezing water in order to retain the freshness of fruits. b. Peeling After washing, use your hands in peeling the ponkan orange because it has a thicker skin compare to the other fruit. Make sure to wash your hands before doing it. Ponkan compose of 60% skin. c. Slicing Hold apple so that stem is facing straight up while apple is on top of a cutting board. Cut the peeled fuji apple which is 232.5 grams in weight into a medium size. Use a sharp knife to create the size slices of your choosing by slicing each large slice into the upward, rounded section of the apple pieces, so that it would be easy for the blender to blend it. d. Extracting Presses are the usual and traditional method of removing juice from the fruit. By the use of Imarflex extractor, the residues and juice will be separated. The researchers can extract the 300g of ponkan which will result to a 75.28 g of juice and 74.91% residues. 45 Western Mindanao State University Department of Industrial and Management Engineering 58
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e. Mixing / Blending After the extraction and slicing/cutting process, 75.28 g of ponkan orange and slices of apples are mixed together in the blender. Pour it with 150 ml evaporated milk, 150 grams of refined sugar and 452 ml of ice cubes to produce 1 pitcher of smoothie. In order to get an equal taste, stir it using tablespoon or stirring rod. f. Filling It is the process of bringing the mixed juice into the container. The container is made up of 250 ml plastic slushy cup.
g. Adding gelatin For a good and healthy taste, add 75g of malunggay gelatin in a 1 cup of smoothie.
2. Apple-Carrot-Orange Smoothie with Malunggay Gelatin (CAO Smoothie)
a. Washing Wash all raw fruits such as 232.5 g of fuji apple and 300 g of ponkan orange and 150 g of carrot to remove the dirt, pesticide or else the chemicals present on it. Use colander in washing the needed raw materials. Do not use hot nor freezing water in order to retain the freshness of fruits and vegetable. The researcher may also use brush but not too rough for a certain veggies such as carrot, which have been growing in soil. Make sure there isn't any dirt or other items left on fruits or vegetable.
b. Peeling After washing, use knife or peeler to take out the skin of the carrot, unlike on the ponkan orange fruit because it has its thinner peel, just used your hands in peeling the ponkan. Make sure to wash your hands before doing it. Hence, carrot contains 14.29% of skin and 60% of skin and seeds for orange. 46 Western Mindanao State University Department of Industrial and Management Engineering 59
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c. Slicing Cut the apples into medium size, to ensure it will make the blender machine to blend it easily, slice all the large sizes. Cut the peeled carrots into medium size to make sure it will fit in the juice extractor machine. Use a sharp knife in slicing the 232.5 g of apple, 128.6 g of carrot. d. Extracting Presses are the usual and traditional method of removing juice from fruit and vegetable materials. By the use of Imarflex extractor, the residues and juice will be separated. The researchers can extract the 300 g of ponkan that will result to a 75.28 g of juice and 74.91% residues. In addition, by pressing the 150 g of carrot we could come up with 37.86% residues and 93.21 g of concentrated carrot juice. e. Mixing / Blending After the extraction process, mix the 75.28 g of ponkan orange juice and 93.21 g of concentrated carrot juice unto the blender together with the sliced apple. Pour it with 150 ml evaporated milk, 150 g of refined sugar and 358 ml of ice cubes to produce 1 pitcher of smoothie. In order to get an equal taste, stir it using tablespoon or stirring rod. f. Filling It is the process of bringing the mixed juice into the container. The container is made up of 250 ml plastic slushy cup. g. Adding gelatin For a good and healthy taste, add 75g of malunggay gelatin in every 1 cup of smoothie.
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3. Banana-Pineapple Smoothie with Malunggay Gelatin (Pia Banana Smoothie)
a. Washing Wash the 550 g of ripe latundan banana fruits and 110 g of pineapple in order to remove the dirt present on it. Do not use hot nor freezing water in order to retain the freshness of fruits. The researcher may also use brush for cleaning the outside part of the pineapple. Make sure there isn't any dirt or other items left on fruits. b. Peeling After washing, use a sharp knife or peeler to take out the skin of the pineapple. Otherwise, use your hands in peeling the skin of the banana. Pineapple consists of 10% peel and 54.42 % for the skin of banana. Make sure to wash your hands before doing it. c. Slicing Cut the peeled 110 g of pineapple and 550 g of banana into a medium size, just to ensure it will easily blend into the blender machine. Use a sharp knife in slicing the fruits. d. Mixing / Blending Mix and blend the 88g of pineapple with 250.69g of sliced banana. Add the 150 ml evaporated milk, 150g of refined sugar and 412 ml of ice cubes to produce 1 pitcher of smoothie. In order to get an equal taste, stir it using tablespoon or stirring rod. d. Filling It is the process of bringing the mixed juice into the container. The container is made up of 250 ml plastic slushy cup.
e. Adding gelatin For a good and healthy taste, add 75 g of malunggay gelatin in a 1 cup of smoothie.
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Figure 3.2 Qualitative Flow Diagram
Washing Peeling Cutting Filling Blending Extracting Adding gelatin Finished Product ( Smoothie ) 49 Western Mindanao State University Department of Industrial and Management Engineering 62
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Apple (4% seeds) Carrot (14.29%Skin) Orange (60%Skin) Residue Orange (74.91%) Carrot (37.86%) Finished Product (1,500mL)/250mL =6 cups 51 Western Mindanao State University Department of Industrial and Management Engineering 64
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Finished Product (1,500ml)/250ml =6 cups 52 Western Mindanao State University Department of Industrial and Management Engineering 65
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Production Capacity and Operation Schedule The present percent capacity of production is based on the maximum capacity of juice produced in the year 2013-2014. The manufacturer can produce 15 pitchers, 90 cups, 22.5 L per production. The table shown below has an assumption of 10% increase per annum. Percent utilization of 10% increase per annum was based from the projected population increase every school as the population increase the percentage of utilization must also increase where the researcher can produce output of 10% from the full capacity utilization. Table 3.1 Full Capacity Utilization Projected Years Full Capacity Utilization (in glass of 0.25 L in a year) % Utilization Production Output (in cup of 0.25 L) Present 21,330 33% 7,038.90 2014-2015 21,330 49.75% 10,611.67 2015-2016 21,330 66.5% 14,184.45 2016-2017 21,330 83.25% 17,757.23 2017-2018 21,330 100% 21,330.00 2018-2019 21,330 116.75% 24,902.78 Table 3.1 shows the production capacity 16.75% per annum (see ANNEX B computation 1 for full capacity)
Equipment The table shows the equipment needed for the proposed business. To lessen the input cost, the other tools will be note as a donated asset. (See ANNEX C table 1 for more details of equipment) Table 3.2 Table Summary for the cost of equipment required for the operation Description Quantity Unit price Unit Cost Juice extractor 1 P 1,550.00 1 P 1,550.00 Blender 1 2,205.00 1 2,205.00 Total P 3,755.00 Table 3.2 shows the cost of equipment used in the production of Frugies.
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Utensils and Material The table shows the utensil and material needed for the proposed business. To lessen the input cost, the other tools will be note as a donated asset. (See ANNEX C table 2 for more details of utensils and materials)
Table 3.3 The summary for utensils and materials needed for the operation Description Quantity Unit price Unit (pcs) Cost Plastic cup 50 pcs P 58.50 50 P 58.50 Lid 100 pcs 65.00 100 65.00 Plastic straw 1 pack (100 pcs) 18.00 100 18.00 Measuring cup 3 pcs 30.00 1 90.00 Knife 1 33.00 1 33.00 Cooler 1 1,100.00 1 1,100.00 Small basin 1 13.75 1 13.75 Chopping board 1 55.00 1 55.00 Total P 1,433.25 Table 3.3 shows the utensils and materials needed in the operation and its cost.
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Store Location The target location of the proposed business is in Western Mindanao State University because it would be easy for the researchers to market the product named Frugies , the specific location of the stall in the school will be in the College of Engineering and Technology grounds. Figure 3.5 Stall location of the proposed business
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Stall Layout It shows the floor store/stall layout where selling will be done, it has a width of 3.5 feet and a length of 4 feet. The entrance/exit (1.5 ft) where perishable goods will be loaded and unloaded and counter top set for customers ordering area is (2ft x 4ft). The storage for the tools, equipment and other materials will be the space or area below the counter top (2 ft x 4 ft x 3 ft) and (1ft x 1ft) chair for the personnel. Figure 3.6 Production layout of the business
TOP VIEW
FRONT VIEW 56 Western Mindanao State University Department of Industrial and Management Engineering 69
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Table 3.4 Raw Materials for Gelatin
Raw Material Quantity Unit price Unit Cost Gelatin powder 24g (1pack) P 10.00 Per 24g (1pack) P 10.00 Malunggay 10g 5.00 Per 10g 5.00 Refined sugar 56g 46.00 Per 1000g (1kl) 2.50 Evaporated milk 62.5ml 34.50 Per 370ml 5.80 Distilled water 1,400ml 10.00 Per 6000ml 2.33 Total P 25.63 Table 3.4 shows the cost of gelatin produce per 1pack of powdered gelatin which weighs 1,518g when turns to solid. (See ANNEX C table3 for more details of raw materials)
Table 3.5 Raw Materials for Verdi Smoothie
Raw material Quantity Unit price Unit Cost Apple 232.5g P 15.00 Per 157g(1pc) P 22.20 Orange 300g 10.00 Per 150g(1pc) 20.00 Evaporated milk 150mL 24.50 Per 370 ml (1can) 9.92 Gelatin w/ malunggay 450g 25.63 Per 1,518g 7.59 Refined sugar 150g 46.00 Per 1000kg (1kl) 6.90 Ice/Distilled water 452mL 10.00 Per 6,000ml (6L) 0.75 TOTAL P 67.36 Table 3.5 shows the total cost of the Verdi Smoothie wherein P67.36 can produce 1.500 L (1pitcher) or equivalent to 6 cups. (See ANNEX C table 3 for more details of raw materials)
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Table 3.6 Raw Materials for CAO Smoothie
Raw material Quantity Unit price Unit Cost Apple 232.5g P 15.00 Per 157g (1pc) P 22.21 Carrot 150g 70.00 Per 1000g (1kl) 10.50 Orange 300g 10.00 Per 150g (1pc) 20.00 Evaporated milk 150ml 24.50 Per 370ml (1can) 9.93 Gelatin w/ maluggay 450g 25.63 Per 1,518g 7.59 Refined sugar 150g 46.00 Per 1000g (1kl) 6.90 Ice/Distilled water 358ml 10.00 Per 6,000ml (6L) 0.60 TOTAL P 77.73 Table 3.6 shows the total cost of CAO Smoothie wherein P77.73 can produce 1.5 L (1pitcher) or equivalent to 6 cups. (See ANNEX C table3 for more details of raw materials)
Table 3.7 Raw Materials for Pia Banana Smoothie
Raw material Quantity Unit price Unit Cost Banana 550g P 15.00 Per 1000g (1kl) P 8.25 Pineapple 110g 55.00 Per 1000g (1kl) 6.05 Evaporated milk 150ml 24.50 Per 370ml (1can) 9.93 Gelatin w/ maluggay 450g 25.63 Per 1,518g 7.60 Refined sugar 150g 46.00 Per 1000g (1kl) 6.90 Ice/Distilled water 412ml 10.00 Per 6,000ml (6L) 0.69 TOTAL P 39.42 Table3.7 shows the total cost of the Pia Smoothie were in P39.42 can produce 1,500 L (1pitcher) or equivalent to 6 cups (See ANNEX C table3 for more details of raw materials)
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Utilities The proposed business operates will be in Western Mindanao State University, it is considered to be a production location. Power supply is from Zamboanga City Electric Cooperative (ZAMCELCO). The Kw/h rate power consumption of public building consumers like WMSU is Php 7.2421 and the water supply will be from refilling station which is Php 10/6L is the minimum while the transportation vehicle will be a jeep which is the minimum fare is Php 5.00 from Baliwasan to downtown and vice versa a total of Php 10.00 for the fare. Table 3.8 Power Consumption per operation Machine Kw Hour Rate/kwhr Cost
Juice Extractor
.25
5 secs
P 7.2421
P 0.01 Blender .25 16 mins P 7.2421 0.48 Total P 0.49 Table 3.8 shows the total amount consumption of electricity per production of juice
Table 3.9 Water Consumption per operation Description Consumption (liter) Price/Refill Cost Distilled water 6 P 10 P 10 Total P 10 Table 3.9 shows the total consumption of water per operation
Table 3.10 Transportation Cost per operation Description Fare Rate No.of ride Cost Jeep P 5 2 P 10 Total P 10 Table 3.10 shows Transportation cost for purchasing raw materials per operation
Table 3.11 Rental Cost per day Description Rent per day No.of days Cost Blender P 5 30 P 150 Total P 150 Table 3.11 shows the rental cost of the machine per month.
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Waste Disposal Procedure Decomposable and non-decomposable wastes are expected to be generated from the operation such as plastic cups, plastic straw and cellophanes for non-decomposable and wastes from peeled fruits and vegetables for decomposing. Disposal of these Decomposable and non-decomposable wastes materials will undertake proper waste management practice. These wastes will be disposed to trash cans or garbage cans for proper waste disposal. Labor Requirement There will be 3 workers required per operation but the company will employ 6 personnel, they will work 8 hours a day with 1 hour lunch break excluded to the total work hours for the day, 6x a week or 24days in a month in alternating days depending on the scheduled given by the management. Labor cost is in per hour basis wherein the workers receive Php 32.50 per hour. But due to lack of financial capability to hire required personnel the business will be run by the six (6) researchers and also will be handled the other positions.
Table 3.12 Labor Requirement for the operation Labor required No. of labor required No. of hour No. of production/month Minimum Wage per hour Projected labor cost Production crew 2 8 24 P 32.50 P 12,480.00 Cashier 1 8 24 P 32.50 6,240.00 TOTAL P 18,720.00 Table 3.12 shows the total labor cost per operation in 1 month and minimum wage per hour.
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Safety and Maintenance The prior concern of this study is the safety of the employees and customers, food safety procedure implied on this study by using sanitizer, hair net and apron to avoid food contamination.
Table 3.13 Safety Gear Requirement for the Production Crew Personnel No. of personnel No. of hair net No. of mask No. of Apron Production crew 6 6 6 6 Total 6 6 6 6 Table 3.13 shows the total safety gear requirement for the personnel. Table 3.14 Cost of Safety Gear for the Production Crew Description Quantity Unit price Cost Hair net 6 P 8.00 P 60.00 Mask 6 P10.00 60.00 Apron 6 P 43.00 258.00 Total P 378.00 Table 3.14 shows the total cost of safety gears for the personnel.
Table 3.15 Total Production Cost Cost Verdi Smoothie Amount CAO Smoothie Amount Pia-Banana Smoothie Amount Raw materials P 68.25 P 72.45 P 41.72 Direct labor 8.67 8.67 8.67 Rent expense & utilities 8.86 8.86 8.86 LPG 1.50 1.50 1.50 Packaging expense 2.55 2.55 2.55 Production cost P89.83/6cups P94.03/6cups P63.3/6cups Production cost per unit P14.88 P15.67 P10.88 Table 3.15 The production cost is dependent on the raw materials being used, since the business is made to order basis the researchers prefer to use minimal backup volume of smoothies in pitcher to avoid higher cost in production, were Verdi Smoothie, Cao Smoothie and Pia-Banana Smoothie can equally produced 6 cups.
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Socio-Economic Socio-Economic impact is designed to assist communities in making decisions that promote long-term capability including economic prosperity, a healthy community and social well-being. Frugies Smoothies Production will affect the income as a result it will benefit the community and the people. Also, the company can help the local producers i n considering the use of locally manufactured raw materials and labor. Table 4.1 Impact Benefits Measures Agricultural
The demand for local fruits and vegetables will increase; as the project develops usage of raw materials will contribute in increasing the demand in terms of agricultural planting. Local farmers are considered as one supplier in local business that made the economys status in progressed and help farmers increase production and income. Crops Based from the Bureau of Agricultural Statistics, the percent growth of crops last 2012 was 4.15% and was decreased by 0.09% in year 2013. Farmer Based from NSCB number of employed persons in agriculture remained almost constant since 2004 by 10,775.
Shows the crops as one of the raw materials use in producing the product and its quantity. Where the average price for Apple is P 15.00 each, Orange which is P 10.00 each, Carrots which is P70.00 per kilo, Malunggay leaves which is P5.00 per bundle, Banana which is P 20.00 per kilo and Pineapple which is P55.00 per kilo.
As the growth rate per production output of Frugies Smoothies Production increases the demand for crops from agricultural sector also increases which gives the local farmers the chance to sell fresh produced direct to the company. Crops Unit Price Apple (Fuji) 157g P 15.00 Orange (Ponkan) 150g P 10.00 Malunggay leaves 10g P 5.00 Carrot 1000g P 70.00 Banana (Latundan) 1000g P 20.00 Pineapple 1000g P 55.00
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Job Opportunities
Business opens an opportunity to the community where there are unemployed people. As the study development continues it will expand into different places that need manpower to operate the business.
Table shows the number of employees required based on the projected capacity of the business. Where the Manager, Production Supervisor, Finance Supervisor, Sales and Marketing Supervisor, Accountant, and Promotional and Advertising Staff has not increased in the number of employees because the position only requires only one employee. Labor Required S.Y. 2013 -2014 S.Y. 2014- 2015 S.Y. 2015- 2016 S.Y. 2016- 2017 S.Y. 2017- 2018 Manager 1 1 1 1 1 Production Supervisor 1 1 1 1 1 Finance Supervisor 1 1 1 1 1 Sales and Marketing Supervisor 1 1 1 1 1 Accountant 1 1 1 1 1 Promotional and Advertising Staff 1 1 1 1 1 Purchasing Officer 1 2 2 3 3 Production Crew 2 3 4 5 6 Cashier 1 2 3 4 5 Receiving Personnel 1 1 2 2 2 63 Western Mindanao State University Department of Industrial and Management Engineering 77
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Standard of Living Frugies Smoothie Production produces a good quality product and is therefore aims to produce a good and standard living. The company believes that every person deserves to live a better life for it is one of the key to a progressive country. The company pays its personnel. The table below shows the actual and projected salary to be given by the company to its personnel.
Data was based from the assumption on the number of labor required for the succeeding school years. The salary of production crew, cashier, receiving personnel was based from the minimum wage per hour under DOLE amounting of P33 which shall be increased by 4% in S.Y 2014-2015 and by S.Y 2017-2018 the salary amounting of P142,200 that shall be compensate. Manager and Production Supervisor, Finance Supervisor, Accountant, Sales and Marketing, Promotional and Advertising Staff shall received the minimum salary of P 267 per day and shall increased by 4% in S.Y 2014-2015 and by S.Y 2017-2018 the salary amounting of P 243,093 shall be compensate.
Labor required S.Y. 2013-2014 S.Y. 2014- 2015 S.Y. 2015- 2016 S.Y. 2016- 2017 S.Y. 2017- 2018 Manager/ Production Supervisor P 63,279 P 88,591 P 124,027 P 173,638 P 243,093 Finance Supervisor P 63,279 P 88,591 P 124,027 P 173,638 P 243,093 Accountant P 63,279 P 88,591 P 124,027 P 173,638 P 243,093 Sales and Marketing P 63,279 P 88,591 P 124,027 P 173,638 P 243,093 Promotion al and Advertising Staff P 63,279 P 88,591 P 124,027 P 173,638 P 243,093 Production crew/ Receiving personnel P 47,400 P 70,500 P 94,000 P 118,500 P 142,200 Cashier P 47,400 P 70,500 P 94,000 P 118,500 P 142,200 Total cost P 411,195
P 583,955
P 808,135
P 1,105,190
P 1,499,865
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Healthy Living
One of the major causes of death is having a poor lifestyle habit, recent studies shows that heart attack is the number one cause of continuous growth death cases in the society. As young ages involved in vices it includes smoking, drinking and eating unhealthy foods. The researchers concerned, initiate the natural remedies on daily practice in consuming healthy drinks and eliminate unhealthy diet where it helps to the society.
The smoothies produced by the company having malunggay gelatin as an add-ons is made of powdered gelatin mixed with extracted malunggay juice. The company has operated four (4) months. The following shows the feedbacks of the customers after purchasing and consuming the product. The customers felt energized and refreshed The customers were satisfied by the taste that made them
Nutrients Description Nutrient value Percentage Calcium It is essential to the formation of bones and teeth. 13mg 1.3% Vitamin A Vitamin A is important to the health of the outer layer of cells in the skin and organs. 58 IU 2% Vitamin C A water-soluble vitamin found in fruits and leafy vegetables or made synthetically and used as antioxidant. Helps boost immune system. 47.8mg 80% Potassium Potassium is necessary for the heart, kidneys and other organs to work normally.
109mg 2.5% Iron Human body uses iron to carry oxygen from the lungs to the rest of the body. The iron in hemoglobin, a substance found in blood, does that job. The iron combined with oxygen in hemoglobin also gives blood its red color. Helps prevent anemia.
0.29mg 3.5% 65 Western Mindanao State University Department of Industrial and Management Engineering 79
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Protein
Proteins build and repairs body tissues, from hair and fingernails to muscles. Proteins also fight infection and carry oxygen from the lungs to the rest of the body. 0.54g 1% Zinc Is an essential mineral that is naturally present in some foods, added to others, and available as a dietary supplement. 0.12mg 1% -Data was based on USDA National Nutrient Data Base
-Based on the respondents who have taken or drink the Frugies Smoothies have experienced good digestion, feel energized, feel lighter or less stressful, glowing skin, improves mental ability. 66 Western Mindanao State University Department of Industrial and Management Engineering 80
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Environmental Considerations
Global warming is one of the main issues that the world is experiencing. Most of the pollution came from industries, factories and corporations that use machineries and equipments. Frugies smoothie production will assure that production of smoothie will not damage or harm the environment. The company will make sure that the wastes generated from smoothie production are properly disposed where the biodegradable and non-biodegradable are segregated.
WASTE DISPOSAL Frugies Smoothie Production produces both Bio and Non- biodegradable wastes. The company ensures that the wastes are properly disposed by segregating the Biodegradable and Non-biodegradable. The company will not consider burning of waste since it can harm the environment particularly the ozone layer, thus contribute to the global warming. The wastes from the company will be collected by the garbage truck and will be disposed at the proper dumpsite.
Category Item Unit Non-biodegradable Cup 50 pcs Straw 100 pcs Lid 100pcs Biodegradable Skin Carrot (14.29%) Orange (60%) Banana (54.42%) Pineapple (20%) Seed Apple (4%) Residue Orange (20.8%) Carrot (27.5%) Pineapple (49.74%)
Category Item Description Converted from Non-biodegradable to Biodegradable Paper Cup Slushy disposable paper cup with a volume of 250ml Paper Lid A plain round diposable paper lid to cover cup Paper Straw A 0.5diameter disposable paper straw New method shall apply to help the environmental issues cause by solid waste. From converting Non-biodegradable to biodegradable use of cup, lid and straw. The company wants to implement the usage of biodegradable packaging as soon as the company sees the income increases or once it is already established because usage of paper packaging needs high investment. 67 Western Mindanao State University Department of Industrial and Management Engineering 81
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Table 4.1 shows the Socio-economic impact of Frugies Smoothies Production Government Frugies Smoothie Production does not only aim to produce a healthy drink and improve consumers daily habits by drinking healthy drinks and products. But also aim to help improve and develop the country. The company ensures to pay the right taxes to help support the development and implementation of the government plans in improving the country
Tax Expense S.Y. 2014 - 2015 S.Y. 2015 - 2016 S.Y. 2016 - 2017 S.Y. 2017 - 2018 S.Y. 2018 - 2019 P 3,956.55 P 4,985.51 P 5,472.73 P 6343.78 P 7,338.26
Data was based from the projected income statement S.Y. 2014 until 2019 where the business taxable income is over P 30,000 from S.Y. 2014 until 2019 and shall be tax of P 2,500 + 15% of the excess over P 30,000 amounting to P 3,956.55 for S.Y 2014-2015 and for SY 2015-2016 amounting of P 4,985.51 and P 5,472.73 for S.Y 2016-2017, for S.Y 2017-2018 amounting to P6,343.78 and for S.Y 2018-2019 amounting to P 7,338.26 where it signifies that the company is improving or progressing as well as the taxes paid is also increasing.
If Taxable Income is: Tax Due is: Not over P 10,000 5% Over P 10,000 but not over P 30,000 P 500 + 10% of the excess over P 10,000 Over P 30,000 but not over P 70,000 P 2,500 + 15% of the excess over P 30,000 Over P 70,000 but not over P 140,000 P 8,500 + 20% of the excess over P 70,000 Source: Bureau of Internal Revenue under Philippines Taxation Law.
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(Actual Financial Statement)
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Financial Basis: 1. The Total Project Cost of the business is Php 9,436.21. 2. The working capital for the first month production is Php 2,246.66. 3. The selling price for each product is Php 20.00. 4. The Depreciation expenses are computed using the straight Line Method 5. The Sales crew allowance is Php 50.00 per day. 6. The disposable gloves are declared as an operating supply since it will be replaced on a monthly basis. 7. The rent expense for blender is Php 150.00 per month. 8. The Juicer is assumed to have a life expectancy of three years and declared as book value in the Total Project Cost. 9. The Stall is assumed to have a life expectancy of three years. 10. The equity in the Cash Flow Statement during the Pre operating period is Php 8,506.21 instead of Php 9,436.21 since the juicer costing Php 930.00 that was declared i n the Total Project Cost is a donated asset. 11. Pre operating expenses include the free taste expenses, Business Permit, Tarpaulin and as well as the electric installation. This expense is not declared in the Balance Sheet since this is only an expense needed to initiate the business.
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FRUGIES SMOOTHIES PRODUCTION TOTAL PROJECT COST Table 5.1 Total Project Cost Investment Equity Stall
P1,700.00 Juicer *
930.00 Operating Supplies Disposable Gloves
32.00 Tools and Supplies Hairnet
47.50 Face Mask
50.00 Ice Chest
140.00 Utensils
241.50 Record Book
16.00 Ball pen
5.00 Pre - Operating Expenses
4,027.55 Working Capital
2,246.66 Total Project Cost
P9,436.21
Table 5.1 shows the total project cost of Frugies Smoothies Production which is Php 9,436.21 that is needed to start up the business. The Pre Operating Expenses and Working Capital are computed. *at book value
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FRUGIES SMOOTHIES PRODUCTION PRE OPERATING EXPENSES BREAKDOWN Table 5.2 PRE-OPERATING EXPENSES Cost Free Taste Expenses P 1,869.55 Electric Installation 1,810.00 Certificate of Business Registration 215.00 Tarpaulin 133.00 Total P 4,027.55
Table 5.2 shows the Breakdown of Expenses during the pre operating period. This includes for the prototype presentation per product as an introductory. See Annex D table 4 for the breakdown of the free taste expenses. FRUGIES SMOOTHIES PRODUCTION WORKING CAPITAL Table 5.3 WORKING CAPITAL Direct Material CAO Carrot P 18.50 Apple 210.00 Orange 84.00 Pia Banana Pineapple 70.00 Banana 52.50 Verdi Apple 210.00 Orange 84.00 Malunggay Gelatin 70.00 Evaporated Milk 308.00 Sugar 140.00 Ice 140.00 Direct Labor 350.00 Packaging Expense 237.51 Overhead 13.65 Rent Expense for Blender 150.00 LPG Expense 10.50 Fare 98.00 Total Working Capital P 2,246.66 Table 5.3 shows the breakdown of working capital costing Php 2,246.66 that was used to generate income. 71 Western Mindanao State University Department of Industrial and Management Engineering 86
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FRUGIES SMOOTHIES PRODUCTION MONTHLY CASH FLOW STATEMENT From November 2013 March 2014 Table 5.4 CASH FLOW STATEMENT 2013 2014 TOTAL PRE-OPERATING NOVEMBER DECEMBER JANUARY FEBRUARY MARCH CASH IN - FLOWS
Sales P - P 3,651.00 P 7,034.00 P5,694.00 P7,092.00 P2,343.00 P25,814.00 Equity 8,506.21 - - - - - - Total Cash In-Flows 8,506.21 3,651.00 7,034.00 5,694.00 7,092.00 2,343.00 25,814.00 CASH OUT - FLOWS
Table 5.4 shows the actual flow of cash from the Pre Operating period which is Php 2,246.66 to the next succeeding months. This indicates the difference between the Cash In Flows which include the operating sales of the business and equity to the total Cash Out Flows which include all the expenses to operate the business. 72 Western Mindanao State University Department of Industrial and Management Engineering 87
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FRUGIES SMOOTHIES PRODUCTION MONTHLY INCOME STATEMENT From November 2013 March 2014 Table 5.5
2013 2014 TOTAL NOVEMBER DECEMBER JANUARY FEBRUARY MARCH Sales P3,651.00 P7,034.00 P5,694.00 P7,092.00 P2,343.00 P25,814.00 Less: Sales Discount - - - - - - Sales Return - - - - - - Net Sales 3,651.00 7,034.00 5,694.00 7,092.00 2,343.00 25,814.00 Less: Cost of Goods Sold 2,790.00 5,336.54 3,839.00 5,433.50 1,931.00 19,330.04 Gross Income 861.00 1,697.46 1,855.00 1,658.50 412.00 6,483.96 Less: Selling Expenses - - 30.00 - 80.00 110.00 Depreciation Expenses 73.05 73.05 73.05 73.05 73.05 365.25 Accrued Advertising& Reg. Expense 805.51 805.51 805.51 805.51 805.51 4,027.55 Accrued Pre-operating tools & supplies 106.40 106.40 106.40 106.40 106.40 532.00 Operating Supplies - 32.00 32.00 32.00 32.00 128.00 Net Income P (123.96) P 680.50 P 808.04 P 641.54 P (684.96) P 1,321.16
Table 5.5 shows the actual monthly income of Frugies Smoothies Production from the month of November to the month of March that was generated by subtracting the Cost of Goods Sold, selling expenses and depreciation expenses from the monthly net sales of the business. See Table 5.7 for the Schedule of Cost of Goods Sold.
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FRUGIES SMOOTHIES PRODUCTION MONTHLY BALANCE SHEET From November 2013 March 2014 Table 5.6 BALANCE SHEET 2013 2014 PRE - OPERATING NOVEMBER DECEMBER JANUARY FEBRUARY MARCH Current Asset
Cash P 2,246.66 P 3,107.66 P 4,773.12 P 6,566.12 P8,192.62 P8,492.62 Accounts Receivables - - - - - - Registration & Advertisement 4,027.55 3,222.04 2,416.53 1,611.02 805.51 - Operating tools & Supplies 532.00 425.60 319.20 212.80 106.40 - Raw Materials Inventory - - - - - - Finished Goods Inventory - - - - - - TOTAL CURRENT ASSET P 6,806.21 P 6,755.30 P 7,508.85 P8,389.94 P9,104.53 P8,492.62 Fixed Assets
Stall 1,700.00 1,700.00 1,700.00 1,700.00 1,700.00 1,700.00 Juicer 930.00 930.00 930.00 930.00 930.00 930.00 TOTAL FIXED ASSET 2,630.00 2,630.00 2,630.00 2,630.00 2,630.00 2,630.00 Less: Accum. Dep. of Juicer - 25.83 51.66 77.49 103.32 129.15 Accum. Dep. of Stall - 47.22 94.44 141.66 188.88 236.10 Book Value of Fixed Assets 2,630.00 2,556.95 2,483.90 2,410.85 2,337.80 2,264.75 TOTAL ASSETS P 9,436.21 P9,312.25 P9,992.75 P10,800.79 P11,442.33 P10,757.37
Current Liabilities
Accounts Payable - - - - - - TOTAL CURRENT LIABILITIES - - - - - - Long Term Liability - - - - - - TOTAL LIABILITIES - - - - - - Capital/Beginning Equity
Donated Equity 930.00 930.00 930.00 930.00 930.00 930.00 Capital Contribution 8,506.21 8,506.21 8,506.21 8,506.21 8,506.21 8,506.21 Total Capital/Beginning Equity 9,436.21 9,436.21 9,436.21 9,436.21 9,436.21 9,436.21 Net Income - (123.96) 556.54 1,364.58 2,006.12 1,321.16 Less: Drawing - - - - - - Ending Capital 9,436.21 9,312.25 9,992.75 10,800.79 11,442.33 10,757.37 Total Liability and Owner's Equity P 9,436.21 P 9,312.25 P 9,992.75 P 10,800.79 P 11,442.33 P10,757.37 Table 5.6 shows the monthly Balance sheet of Frugies Smoothies Production which includes the Total Liability and Owners Equity of the business and as well as the Total Assets from November 2013 to March 2014. 74 Western Mindanao State University Department of Industrial and Management Engineering 89
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FRUGIES SMOOTHIES PRODUCTION MONTHLY COST OF GOODS SOLD SCHEDULE From November 2013 March 2014 Table 5.7
2013 2014 TOTAL NOVEMBER DECEMBER JANUARY FEBRUARY MARCH Direct Material 1,852.50 3,497.04 2,337.50 3,432.50 1,117.00 12,236.54 Direct Labor 350.00 750.00 650.00 850.00 400.00 3,000.00 Prime Cost 2,202.50 4,247.04 2,987.50 4,282.50 1,517.00 15,236.54 Add: Packaging Expense 526.00 829.00 591.00 805.50 282.00 3,033.50 Rent Expense for Blender - 150.00 150.00 150.00 40.00 490.00 Add: Overhead Cost - - - - - - Add:LPG Expense 10.50 19.50 19.50 25.50 12.00 87.00 Add: Fare 51.00 91.00 91.00 170.00 80.00 483.00 Production Cost 2,790.00 5,336.54 3,839.00 5,433.50 1,931.00 19,330.04 Add: Finished Goods (Beginning) Inventory - - - - - - Cost of Good Available for Sale 2,790.00 5,336.54 3,839.00 5,433.50 1,931.00 19,330.04 Less: Finished Goods (Ending) Inventory - - - - - - Cost of Goods Sold 2,790.00 5,336.54 3,839.00 5,433.50 1,931.00 19,330.04
Table 5.7 shows the monthly prime cost and production cost of Frugies Smoothies Production which includes all the raw materials needed in the production and including the Direct Labor. See Table 5.8 for the Schedule of Raw Materials.
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FRUGIES SMOOTHIES PRODUCTION MONTHLY DIRECT MATERIAL SCHEDULE From November 2013 to March 2014 Table 5.8
Direct Materials 2013 2014 TOTAL NOVEMBER DECEMBER JANUARY FEBRUARY MARCH CAO
Carrot P 40.00 P 15.00 P - P - P - P 55.00 Apple 143.00 200.00 - - - 343.00 Orange 50.00 72.00 - - - 122.00 Pia Banana
- Apple 130.00 547.00 460.00 980.00 280.00 2,397.00 Orange 50.00 302.00 230.00 485.00 186.00 1,253.00 Malunggay Gelatin 86.50 178.50 137.00 185.50 65.50 653.00 Evaporated Milk 335.00 641.54 473.25 759.00 229.50 2,438.29 Sugar 224.00 387.00 359.25 444.00 111.00 1,525.25 Ice 189.00 329.00 316.00 364.00 175.00 1,373.00 Total P 1,852.50 P 3,497.04 P 2,337.50 P 3,432.50 P 1,117.00 P 12,236.54
Table 5.8 shows the total monthly Direct Material Schedule of Frugies Smoothies Production from the month of November 2013 to the month of March 2014.
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Financial Analysis
The financial Analysis measures the projects profitability, liquidity, cash solvency and stability. It is a systematic way of determining the financial aspect of the project. Through this, the interpretation of the financial statements will determine the projects strength and weakness.
A. Test of Profitability 1. Gross Profit Margin
=
100
Gross Profit Ratio reveals the profit left over from operations after all variable costs have been subtracted from revenues. In essence, it reveals the efficiency of the production process in relation to the prices and unit volumes at which products are sold.
Frugies Smoothies Production Monthly Gross Profit Margin Table 5.9 MONTHLY GROSS PROFIT MARGN 2013 2014 NOVEMBER DECEMBER JANUARY FEBRUARY MARCH Gross Profit P 861.00 P 1,697.46 P 1,855.00 P 1,658.50 P 412.00 Net Sales 3,651.00 7,034.00 5,694.00 7,092.00 2,343.00 Gross Profit Ratio 0.24 0.24 0.33 0.23 0.18
Table 5.9 shows that Frugies Smoothies Production was able to generate a gross profit of 24 centavos for the month of November, 24 centavos for the month of December, 33 centavos for the month of January, 23 centavos for the month of February and 18 centavos for the month of March out of the one peso sale from November 2013 to March 2014.
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2. Net Profit Margin
=
100 The net profit margin, also known as net margin, indicates how much income net income a company makes with total sales achieved.
Frugies Smoothies Production Monthly Net Profit Margin Table 5.10
MONTHLY NET PROFIT MARGIN 2013 2014 NOVEMBER DECEMBER JANUARY FEBRUARY MARCH Net Profit P (123.96) P 680.50 P 808.04 P 641.54 P (684.96) Net Sales 3,651.00 7,034.00 5,694.00 7,092.00 2,343.00 Net Profit Margin (0.03) 0.10 0.14 0.09 (0.29)
Table 5.10 shows the monthly net profit margin of Frugies Smoothies Production. This means that the business was able to generate a net profit of -3 centavos for the month of November, 10 centavos for the month of December, 14 centavos for the month of January, 9 centavos for the month of February and-29 centavos for the month of March out of the one peso sale from November 2013 to January 2014.
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B. Assets Turnover 1. Total assets turnover
=
100 The Total assets turnover indicates the amount of sales a company makes out of its total assets. This indicates how efficiently a firm is using its assets in generating sales.
Frugies Smoothies Production Monthly Assets Turnover Table 5.11 MONTHLY TOTAL ASSETS TURNOVER 2013 2014 NOVEMBER DECEMBER JANUARY FEBRUARY MARCH Sales
P3,651.00
P7,034.00
P5,694.00
P7,092.00
P2,343.00 Total Assets
9,312.25
9,992.75
10,800.79
11,442.33
10,757.37 Total Assets Turnover 39% 70% 53% 62% 22%
Table 5.11 shows the Total Assets Turnover of Frugies Smoothies Production. This means that the business was able to generate a sale of 39 centavos for the month of November, 70 centavos for the month of December, 53 centavos for the month of January, 62 centavos for the month of February and 22 centavos for the month of March out of the one peso assets from November 2013 to January 2014.
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C. Test of Capital Investment 1. Return on Investment =
100 Return on Investment (ROI) is a performance measure used to evaluate the efficiency of an investment. It is one way of considering profits in relation to capital invested.
Frugies Smoothies Production Return on Investment (Actual Monthly Financial Investment) Table 5.12
Average Monthly Income 264.23 Total Investment
9,436.21 Return on Investment 3%
Table 5.12 shows that the business has an average return on investment of 3% out of the total project cost based on actual monthly financial statement.
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2. Payback Period =
The length of time required to recover the cost of an investment. The payback period of a given investment or project is an important determinant of whether to undertake the position or project, longer payback periods are typically not desirable for investment positions.
Frugies Smoothies Production Payback Period (Actual Monthly Financial Statement) Table 5.13 Total Project Cost 9,436.21 Average Monthly Income 264.23 Payback Period 35.71
Table 5.13 shows that the total project cost of Frugies Smoothies Production is Php 9,436.21 which can be recovered in 35.71 (35 months and 18 days) or 3 (35.71 months / 12months operation per year) years.
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A. Break even Analysis
An analysis to determine the point at which revenue received equals the costs associated with receiving the revenue. Break-even analysis calculates what is known as a margin of safety, the amount that revenues exceed the break-even point. This is the amount that revenues can fall while still staying above the break-even point.
Frugies Smoothies Production Break even Analysis (Actual Monthly Production) Table 5.14 ACCOUNT TITLE 2013 2014 NOVEMBER DECEMBER JANUARY FEBRUARY MARCH Fixed Costs
Rent Expense P - P 150.00 P 150.00 P 150.00 P 40.00 Depreciation Expense 73.05 73.05 73.05 73.05 73.05 Accrued Advertising& Registration Expense 805.51 805.51 805.51 805.51 805.51 Accrued Pre-operating tools & supplies 106.40 106.40 106.40 106.40 106.40 TOTAL P 984.96 P 1,134.96 P1,134.96 P1,134.96 P1,024.96
Break - Even in Cups 209.12 219.95 166.42 226.54 358.95 Break - Even in Pesos P 4,182.42 P 4,399.07 P 3,328.33 P4,530.78 P7,178.92
Table 5.14 shows the number of cups that Frugies Smoothies Production has sold in order to attain Break Even in which no Profit or Loss is shown. This means that the Business should have sold 209.12 cups in November, 219.95 cups in December, 166.42 cups in January, 226.54 cups in February and 358.95 cups in March.
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A. Cost Structure and Operating Leverage
Frugies Smoothies Production Cost Structure (Actual Monthly Production) Table 5.15
Table 5.15 shows the monthly cost structure of Frugies Smoothies Production. The computed contribution margin and net income will be use as a basis for computing the monthly operating leverage factor of the business.
CONTRIBUTION MARGIN NET INCOME OPERATING LEVERAGE FACTOR November 861.00 (123.96) (6.95) December 1,815.46 680.50 2.67 January 1,943.00 808.04 2.40 February 1,776.50 641.54 2.77 March 340.00 (684.96) (0.50)
Table 5.16 shows the monthly operating leverage factor of Frugies Smoothies Production. This shows the extent to which the business uses fixed costs in the cost structure and the ability to generate an increase in net income when sales revenue increases.
Frugies Smoothies Production Percentage Change in Net Income (Actual Monthly Production) Table 5.17
PERCENTAGE INCREASE IN SALES REVENUE OPERATING LEVERAGE FACTOR PERCENTAGE CHANGE IN NET INCOME November 40% (6.95) -277.8% December 40% 2.67 106.7% January 40% 2.40 96.2% February 40% 2.77 110.8% March 40% (0.50) -19.9% Table 5.17 shows the monthly percentage change in net income of Frugies Smoothies Production by multiplying the monthly percentage increase in sales revenue to the monthly operating leverage factor (see Table 5.16 for the computation of operating leverage) of the business. 83 Western Mindanao State University Department of Industrial and Management Engineering 98
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(Projected Financial Statement)
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Financial Assumptions:
1. The basis for projecting the annual sales for the School Year 2013 2014 to School Year 2017 2018 is the actual monthly sales generated during the four months operation. 2. The Projected yearly increase in sales is based on the yearly growth rate of the production capacity in the full capacity utilization. See table 3.1 for details.
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Stall - - 5,738.00 - - Juicer - - 5,231.00 - - Operating tools &Supplies Disposable Gloves 384.00 384.00 384.00 384.00 384.00 Hairnet 99.00 103.00 107.00 111.00 115.00 Face Mask 104.00 108.00 112.00 116.00 120.00 Utensils - - 362.25 - - Ice Chest - - 210.00 - - Record Book 34.00 36.00 38.00 40.00 42.00 Ball Pen 72.00 84.00 96.00 108.00 120.00 Direct Materials 44,345.22 59,422.60 74,278.25 89,133.89 104,286.66 Direct Labor 10,872.00 14,568.48 18,210.60 21,852.72 25,567.68 Packaging Expense 10,993.40 14,731.16 18,413.95 22,096.73 25,853.18 Rental Fee for Blender 1,775.76 2,379.52 2,974.40 3,569.28 4,176.05 LPG Expense 315.29 422.49 528.11 633.73 741.47 Fare 1,750.39 2,345.52 2,931.90 3,518.28 4,116.39 Selling Expenses 398.64 534.18 667.72 801.27 937.48 Income Tax Payment - 3,956.55 4,985.51 5,472.73 6,343.78 Salary Expense 47,400.00 70,500.00 94,000.00 118,500.00 142,200.00 Pre - operating Expenses Total Cash Out-Flows P 118,543.70 P169,575.49 P 229,268.68 P 266,337.64 P 315,003.69 Net Cash Flows 40,733.13 43,855.46 37,520.01 53,808.79 59,567.63 Add: Cash Beginning Balance 8,492.62 49,225.75 93,081.20 130,601.22 184,410.01 Cash Ending Balance P 49,225.75 P 93,081.20 P 130,601.22 P 184,410.01 P 243,977.64
Table 5.18 Shows the Projected annual cash flow of Frugies Smoothies Production from School Year 2013 2014 to School Year 2018 2019. 85 Western Mindanao State University Department of Industrial and Management Engineering 101
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FRUGIES SMOOTHIES PRODUCTION PROJECTED ANNUAL INCOME STATEMENT S.Y. 2013 2014 to S.Y. 2018 - 2019 Table 5.19
Table 5.19 shows the computation for the projected annual income statement of Frugies Smoothies Production from School Year 2013 2014 to School Year 2018 - 2019. It shows the possible Annual Net Income that the company can generate. See Table 5.21 For the Schedule of Cost of Goods Sold.
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FRUGIES SMOOTHIES PRODUCTION PROJECTED ANNUAL BALANCE SHEET S.Y. 2013 2014 to S.Y. 2018 - 2019 Table 5.20
Stall 1,700.00 1,700.00 5,738.00 5,738.00 5,738.00 Juicer 930.00 930.00 5,231.00 5,231.00 5,231.00 TOTAL FIXED ASSET P2,630.00 P2,630.00 P10,969.00 P10,969.00 P10,969.00 Less: Accum. Dep. of Juicer 490.82 930.00 1,743.67 3,487.33 5,231.00 Accum. Dep. of Stall 897.21 1,700.00 1,912.67 3,825.33 5,738.00 Book Value of Fixed Assets 1,241.97 - 7,312.67 3,656.33 - TOTAL ASSETS P50,467.72 P93,081.20 P137,913.88 P188,066.34 P243,977.64
Current Liabilities
Income Tax Payable 3,956.55 4,985.51 5,472.73 6,343.78 7,338.26 TOTAL CURRENT LIABILITIES 3,956.55 4,985.51 5,472.73 6,343.78 7,338.26 Long Term Liability - - - -
TOTAL LIABILITIES 3,956.55 4,985.51 5,472.73 6,343.78 7,338.26 Capital/Beginning Equity
Donated Equity 930.00 930.00 930.00 930.00 930.00 Capital Contribution 8,506.21 8,506.21 8,506.21 8,506.21 8,506.21 Total Capital/Beginning Equity 9,436.21 9,436.21 9,436.21 9,436.21 9,436.21 Net Income 37,074.96 78,659.49 123,004.95 172,286.36 227,203.17 Less: Drawing - - - - - Ending Capital 46,511.17 88,095.70 132,441.16 181,722.57 236,639.38 Total Liability and Owner's Equity P50,467.72 P93,081.20 P137,913.88 P188,066.34 P243,977.64
Table 5.20 shows the projected Annual Balance sheet of Frugies Smoothies Production which includes the Total Liability and Owners Equity of the business and as well as the Total Assets from School Year 2013 - 2014 to School Year 2018 2019.
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FRUGIES SMOOTHIES PRODUCTION PROJECTED ANNUAL COST OF GOODS SOLD SCHEDULE S.Y. 2013 2014 to S.Y. 2018 -2019 Table 5.21
S.Y. 2014 - 2015 S.Y. 2015 - 2016 S.Y. 2016 - 2017 S.Y. 2017 - 2018 S.Y. 2018 2019 Direct Material P 44,345.22 P 59,422.60 P 74,278.25 P 89,133.89 P 104,286.66 Direct Labor 10,872.00 14,568.48 18,210.60 21,852.72 25,567.68 Prime Cost 55,217.22 73,991.08 92,488.85 110,986.61 129,854.34 Add: Packaging Expense 10,993.40 14,731.16 18,413.95 22,096.73 25,853.18 Add: Rent Expense for Blender 1,775.76 2,379.52 2,974.40 3,569.28 4,176.05 Add: LPG Expense 315.29 422.49 528.11 633.73 741.47 Add: Fare 1,750.39 2,345.52 2,931.90 3,518.28 4,116.39 Production Cost 70,052.06 93,869.76 117,337.20 140,804.64 164,741.43 Add: Finished Goods (Beginning) Inventory - - - - - Cost of Good Available for Sale 70,052.06 93,869.76 117,337.20 140,804.64 164,741.43 Less: Finished Goods (Ending) Inventory - - - - - Cost of Goods Sold P 70,052.06 P93,869.76 P117,337.20 P140,804.64 P164,741.43
Table 5.21 shows the prime cost and the production cost of Frugies Smoothies Production which includes all the raw materials needed in the production and including the Direct Labor. See Table 5.22 for the Schedule of Raw Materials.
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FRUGIES SMOOTHIES PRODUCTION PROJECTED ANNUAL DIRECT MATERIAL SCHEDULE S.Y.2013 -2014 to S.Y. 2018 - 2019 Table 5.22
Carrot P 199.32 P 267.09 P 333.86 P 400.63 P 468.74 Apple 1,243.03 1,665.66 2,082.08 2,498.49 2,923.24 Orange 442.13 592.45 740.56 888.68 1,039.75 Pia Banana - - - - - Pineapple 4,240.08 5,681.71 7,102.13 8,522.56 9,971.40 Banana 3,286.97 4,404.54 5,505.67 6,606.81 7,729.96 Verdi - - - - - Apple 8,686.73 11,640.22 14,550.27 17,460.32 20,428.58 Orange 4,540.87 6,084.77 7,605.96 9,127.15 10,678.77 Malunggay Gelatin 2,366.47 3,171.07 3,963.84 4,756.61 5,565.23 Evaporated Milk 8,836.36 11,840.73 14,800.91 17,761.09 20,780.47 Sugar 5,527.51 7,406.86 9,258.57 11,110.29 12,999.04 Ice 4,975.75 6,667.51 8,334.38 10,001.26 11,701.48 TOTAL P 44,345.22 P 59,422.60 P 74,278.25 P 89,133.89 P 104,286.66
Table 5.22 shows the total Projected Annual Direct Material Schedule of Frugies Smoothies Production from School Year 2013 2014 to School Year 2018 2019.
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Financial Analysis
The financial Analysis measures the projects profitability, liquidity, cash solvency and stability. It is a systematic way of determining the financial aspect of the project. Through this, the interpretation of the financial statements will determine the projects strength and weakness.
A. Test of Profitability 1. Gross Profit Margin
=
100
Gross Profit Ratio reveals the profit left over from operations after all variable costs have been subtracted from revenues. In essence, it reveals the efficiency of the production process in relation to the prices and unit volumes at which products are sold.
Table 5.23 shows the Annual Projected Gross Profit of Frugies Smoothies Production. This means that the business can generate a gross profit of 56 centavos for the School Year 2014 2015, 56 centavos for the School Year 2015 2016, 56 centavos for the School Year 2016 2017, 56 centavos for the School Year 2017 2018 and 56 centavos for the School Year 2018 2019 out of the one peso sale from School Year 2013 2014 to School Year 2018 - 2019.
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2. Net Profit Margin
=
100 The net profit margin, also known as net margin, indicates how much income net income a company makes with total sales achieved.
Frugies Smoothies Production Annual Projected Net Profit Margin Table 5.24 ANNUAL NET PROFIT MARGIN S.Y. 2014-2015 S.Y. 2015-2016 S.Y. 2016-2017 S.Y. 2017-2018 S.Y. 2018 - 2019 Net Profit P 35,753.80 P 41,584.53 P 44,345.46 P 49,281.41 P 54,916.82 Net Sales 159,276.83 213,430.95 266,788.69 320,146.43 374,571.32 Net Profit Margin 22% 19% 17% 15% 15%
Table 5.24 shows the Annual Projected Net Profit of Frugies Smoothies Production. This means that the business can generate an income of 22 centavos for the School Year 2014 2015, 19 centavos for the School Year 2015 2016, 17 centavos for the School Year 2016 2017, 15 centavos for the School Year 2017 2018 and 15 centavos for the School Year 2018 2019 out of the one peso sale from School Year 2013 2014 to School Year 2018 2019.
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B. Assets Turnover 1. Total assets turnover
=
100 The Total assets turnover indicates the amount of sales a company makes out of its total assets. This indicates how efficiently a firm is using its assets in generating sales.
Table 5.25 shows the Annual Projected Total Assets Turnover of Frugies Smoothies Production. This means that the business can generate a sale of 3 pesos and 16 centavos for the School Year 2014 - 2015, 2 pesos and 29 centavos for the School Year 2015 2016, 1 peso and 93 centavos for the School Year 2016 2017, 1 peso and 70 centavos for the School Year 2017 2018 and 1 peso and 54 centavos for the School Year 2018 2019 out of the one peso sale from School Year 2013 2014 to School Year 2018 2019.
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C. Test of Capital Investment 1. Return on Investment =
100 Return on Investment (ROI) is a performance measure used to evaluate the efficiency of an investment. It is one way of considering profits in relation to capital invested.
Frugies Smoothies Production Return on investment (Projected Annual Financial Statement) Table 5.26
Projected Annual Income
45,176.40 Total Investment
9,436.21 Return on Investment 479%
Table 5.26 shows that the business has an average return on investment of 479% of the total project cost based on the computed actual annual projected financial statement.
Conclusion: Based on the computation shown in Table 5.12 from the average Monthly income of Php 264.23 it can be assumed that the average annual income is Php 3,170.76 (Php 264.23 x 12 months). Also, from the computation shown in Table 5.26 the projected annual income is Php 45,176.40 and it shows a big difference that affects the ROI of the business. The average annual income has an ROI of 34% while the ROI of the projected annual income is 479%. The big difference had occurred due to the increase of yearly capacity in the production.
Action Plan: With the big difference of ROI between the average annual income and projected annual income the Frugies Smoothies Production should follow the addressed yearly increase in the utilization of production output or exceed the 100% full capacity utilization in order to attain higher percentage of ROI. 93 Western Mindanao State University Department of Industrial and Management Engineering 109
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2. Payback Period =
The length of time required to recover the cost of an investment. The payback period of a given investment or project is an important determinant of whether to undertake the position or project, longer payback periods are typically not desirable for investment positions.
Frugies Smoothies Production Payback Period (Annual Projected Financial Statement) Table 5.27 Total Project Cost 9,436.21 Average Annual Income 45,176.40 Payback Period 0.21
Table 5.27 shows that the total project cost of Frugies Smoothies Production is Php 9,436.21 which can be recovered in 0.21 years or 2.88 (0.24 years x 12months operation per year) months or 2 months and 14 days.
Conclusion: Based from the Payback period presented in Tables 5.13 and 5.27 the actual monthly payback is 35 months and 18 days while the projected monthly payback is 2 month and 14 days. There is a difference of 33 months, and the invested capital will be returned in less than a year for the projected annual income.
Action Plan: In order to attain the 2 months and 14 days payback period the Frugies Smoothies Production must increase the monthly income by conducting a marketing strategy in order to increase the number of cups being sold.
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C. Break even Analysis
An analysis to determine the point at which revenue received equals the costs associated with receiving the revenue. Break-even analysis calculates what is known as a margin of safety, the amount that revenues exceed the break-even point. This is the amount that revenues can fall while still staying above the break-even point.
Break - Even in Cups 4,651.10 6,836.21 9,259.16 11,499.71 13,710.18 Break - Even in Pesos P 93,022.07 P 136,724.26 P 185,183.11 P 229,994.23 P 274,203.70
Table 5.28 shows the number of cups that Frugies Smoothies Production must sell in order to attain Break Even in which no Profit or Loss is shown. This means that the Business must sell 4,651 cups in the School Year 2014 2015, 6,836.21 cups in the School Year 2015 2016, 9,259.16 cups in the School Year 2016 2017, 11,499.71 cups in School year 2017 2018 and 13,710.18 cups in School Year 2018 2019.
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D. Cost Structure and Operating Leverage
Frugies Smoothies Production Cost Structure (Annual Projected Production) Table 5.29
Table 5.29 shows the Annual Projected cost structure of Frugies Smoothies Production. The computed contribution margin and net income will be use as a basis for computing the Projected Annual operating leverage factor of the business.
Table 5.30 shows the monthly operating leverage factor of Frugies Smoothies Production. This shows the extent to which the business uses fixed costs in the cost structure and the ability to generate an increase in net income when sales revenue increases.
Frugies Smoothies Production Percentage Change in Net Income (Annual Projected Production) Table 5.31
Table 5.31 shows the projected annual percentage change in net income of Frugies Smoothies Production by multiplying the annual percentage increase in sales revenue to the actual operating leverage factor (see Table 5.30 for the computation of operating leverage) of the business. 96 Western Mindanao State University Department of Industrial and Management Engineering 112
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Conclusions and Recommendations A. Major Findings and Conclusion The study was thoroughly evaluated based from the different aspects of the research and it is concluded that Frugies Smoothies Production in actual fact is feasible in the market once the business knows how to hit the desires of the consumers. The business was not able to expand their market beyond the College of Engineering and Technology grounds to other colleges or outside the vicinity of Western Mindanao State University due to limited investment. From the equity of the business the researchers were able to generate sufficient profit. Along with the feedbacks of the consumers with regards of the product, it clearly shows that there is a greater chance of improvement particularly if the marketing strategies are expanded. The net income per product may vary to the number of cups being sold per day, the higher the cups being sold, the higher the ROI will be but if the company did not meet the target sales per day there will be a loss on profit due to the expenses incurred.
B. Recommendation
Strategic plan in marketing the product is very important in this study, critical points are need to overcome like perishable goods, lapses of smoothies if it will not be sold before the given holding time and the competitor. Company should keep on researching and be updated about the consumer demands especially when it comes to smoothies. Company should also be creative and be specific about the details of the product from the quality of its taste to the packaging to attract consumers and meet the consumers demand. The company should not only focus on gaining profit but also must help the personnel to be motivated, optimistic and effective through providing seminars, training and activities that will boost their skills. 97 Western Mindanao State University Department of Industrial and Management Engineering 114
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SENSITIVITY ANALYSIS Frugies was established in Western Mindanao State University last November 19, 2013. In four months of selling, the business had encountered some constraints in place, promotion and in the price itself that can affect the sales and profitability of the business. By applying marketing strategy, it allows the researcher to assess the impact of changes in sales as well as to increase profitability and a tool to determine which necessary output of the said strategies are to be relevant in decision-making and provide conclusion and optimum solution of the problem. These are the three (3) constraints that the business had encountered and the marketing strategies used in every constraint: 1 st THE PLACE Strategy: EXPANSION OF THE MARKET PLACE
2 nd THE PROMOTION Strategy: BROCHURE DISTRIBUTION
3 rd THE PRICE Strategy: DECREASE IN PRICE
1 st THE PLACE The location of the stall is in the front of the College of Engineering and Technology where the engineering students are usually passing by. The other colleges dont know the product and the place is not ideal to catch the attention of the consumer. The researcher decided to expand the market place of the business.
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Strategy: EXPANSION OF THE MARKET PLACE By placing the stall in one place to another, in a place where in most of the people would pass by without focusing the area of engineering alone, the sales would possibly increase by 10% yearly. Moreover the price is now P20.00 for all flavors in which it is much affordable to the students of Western Mindanao State University. In fact, by using this strategy the sales increases by 100% monthly which is based on the actual income statement as shown in Table 7.1. FRUGIES SMOOTHIES PRODUCTION MONTHLY INCOME STATEMENT From November 2013 March 2014 Table 7.1
2013 2014 TOTAL NOVEMBER DECEMBER JANUARY FEBRUARY MARCH Sales 3,651.00 7,034.00 5,694.00 7,092.00 2,343.00 25,814.00 Less: Sales Discount - -
- -
-
- Sales Return - -
- -
-
- Net Sales 3,651.00 7,034.00 5,694.00 7,092.00 2,343.00 25,814.00 Less: Cost of Goods Sold 2,790.00 5,336.54 3,839.00
32.00 128.00 Net Income (123.96) 680.50 808.04 641.54 (684.96) 1,321.16 Table 7.1 shows the computation for the monthly income statement of Frugies Smoothies Production from November 2013 to March 2014.
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FRUGIES SMOOTHIES PRODUCTION ADJUSTED MONTHLY INCOME STATEMENT From November 2013 March 2014 Table 7.2
2013 2014 TOTAL NOVEMBER DECEMBER JANUARY FEBRUARY MARCH Sales P7,302.00 P14,068.00 P11,388.00 P14,184.00 P4,686.00 P51,628.00 Less: Sales Discount - - - - - - Sales Return - - - - - - Net Sales 7,302.00 14,068.00 11,388.00 14,184.00 4,686.00 51,628.00 Less: Cost of Goods Sold 5,580.00 10,673.08 7,678.00
73.05 365.25 Accrued Advertising& Registration Expense 805.51 805.51 805.51 805.51 805.51 4,027.55 Accrued Pre- operating tools & supplies 106.40 106.40 106.40 106.40 106.40 532.00 Operating Supplies - 32.00 32.00 32.00 32.00 128.00 Net Income P 737.04 P 2,377.96 P2,663.04 P2,300.04 P(272.96) P7,805.12 Table 7.2 It shows the possible monthly Net Income that the company can generate in which it has an increase in sales by 100% and cost of the good sold for the expansion of market place. ORIGINAL-ADJUSTED NET PROFIT MARGIN TABLE 7.3
NOVEMBER DECEMBER JANUARY FEBRUARY MARCH ACTUAL NET INCOME P (123.96) P 680.50 P 808.04 P 641.54 P (684.96) ADJUSTED NET INCOME 737.04 2,377.96 2,663.04 2,300.04 (272.96) INCREASE 700% 249% 230% 259% 60% Table 7.3 shows the increase of net income monthly. Conclusion: With the use of the strategy, the tables shown above shows that theres an increase in sales by 300% monthly by getting the average increase net income. 100 Western Mindanao State University Department of Industrial and Management Engineering 118
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2 nd THE PROMOTION Frugies is not well-known to the students, staffs and faculty of WMSU. They have no idea about the product and what are its benefits to them. The purpose of promotion in a business is to raise awareness about a product in the market. It assists to business in generating more profits by increasing sales. It is also have a strategy used by organizations to increase their reputation and create a brand name. The researchers had decided to develop the promotion of its products.
Strategy: BROCHURE DISTRIBUTION One of the most common marketing strategies is the distribution of brochure. By doing this, people away from the selling area will know that there is an existing mixed fruit and vegetable smoothie in the market. If ever they are willing to buy they could contact the concern sales person for the delivery of the product although it takes time for the operation. Otherwise, this could vary the sales and also the selling expense. The researchers compare the average sales and net profit in November and December 2013 (where the distribution of brochure has not yet happen) to the average sales and net profit in February and January 2014 where the researchers had started doing this strategy.
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FRUGIES SMOOTHIES PRODUCTION MONTHLY INCOME STATEMENT From November 2013 February 2014 Table 7.4
2013 2014 TOTAL NOVEMBER DECEMBER JANUARY FEBRUARY MARCH Sales 3,651.00 7,034.00 5,694.00 7,092.00 2,343.00 25,814.0 0 Less: Sales Discount - - - - - - Sales Return - - - - - - Net Sales 3,651.00 7,034.00 5,694.00 7,092.00 2,343.00 25,814.0 0 Less: Cost of Goods Sold 2,790.00 5,336.54 3,839.00
32.00 128.00 Net Income (123.96) 680.50 808.04 641.54 (684.96) 1,321.16 Table 7.4 shows the computation for the monthly income statement of Frugies Smoothies Production from November 2013 to February 2014. .The average sales in November and December 2013: = + 2
= 3,651.00 +7,034.00 2
Average Sales = P 5,342.50
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The average sales in January and February 2014: = + 2
= 5,694.00 +7,092.00 2
Average Sales = P 6,393.00 The average net income for November and December 2013: = + 2
= 123.96 + 680.50 2
Average net income = P 278.27 The average net income for January and February 2014: = + 2
= 808.04 + 641.54 2
Average net income=P 724.79 AVERAGE SALES AND NET INCOME November 2013-December 2013 and January 2014-February 2014 TABLE 7.5 Average Sales Average Net Income November- December P 5,342.50 P 278.27 January- February 6, 393.00 724.79 Increase in % 19.7 160.5 Table 7.5 shows the increases of sales and the net income.
Conclusion: The average sales increase 19.7% and 160.5% for the net income when the distribution of brochures is implemented starting on January 2014. 103 Western Mindanao State University Department of Industrial and Management Engineering 121
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3 rd THE PRICE A business can use a variety of pricing strategies when selling a product. The Price can be set to maximize profitability for each unit sold or from the market overall. It can be used to defend an existing market from new entrants, to increase market share within a market or to enter a new market. Businesses may benefit from lowering or raising prices, depending on the needs and behaviors of customers and clients in the particular market. Finding the right pricing strategy is an important element in running a successful business. Strategy: DECREASE IN SELLING PRICE FRUGIES had decrease in price cost per unit from P26.00 down to P20.00 by changing the packaging material, by using the most affordable packaging. The researchers decided to change in economical package to decrease in price since the target market is students that usually does not mind the packaging but the product itself. The researchers compute the average sales in November and December to compare the sales if it is increasing or decreasing. Since the price cost per unit for the month of November is P26.00 and P20.00 for December.
AVERAGE SALES in November 2013 and December 2013 TABLE 7.6 November December Sales P 3,651.00 P 7,034.00 No. of operating days 7 13 Average sales P 521.57 P 541.08 Table 7.6 shows the average sales in November and December. Conclusion: The average sales in December are greater than the average sales in November. Since the decrease in price cost per unit is being implemented in the month of December and increase in sales by 3.7%. 104 Western Mindanao State University Department of Industrial and Management Engineering 122
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Sensitivity Conclusion: Based on the computation shown above, the 1 st strategy which is the EXPANSION OF THE MARKET PLACE has the greatest net income among the three marketing strategies. It increases the sales 300% monthly.
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ANNEX A Below table 1 to 5.2 shows the computation of the projected population of Western Mindanao State University relates to table 2.2, Page 21 under marketing aspect.
HISTORICAL DATA OF RETURNEE STUDENTS Table 1.0 SCHOOL YEAR POPULATION 2008-2009 13 2009-2010 58 2010-2011 18 2011-2012 22
COMPUTATION FOR THE PROJECTION OF RETURNEE STUDENTS
Table 1.1
Arithmetic Straight Line SY Y A Yi-1 Yc Y-Yc (Y-Yc)^2 2008-2009 13 -- -- -- 0 0 2009-2010 58 3.00 13.00 16.00 42 1,764.00 2010-2011 18 3.00 16.00 19.00 -1 1.00 2011-2012 22 3.00 19.00 22.00 0 -
Table 3.2.1 Projected value School Year Yi+1 1+r Yc 2013-2014 251.00 1.000 251 2014-2015 251.00 1.000 251 2015-2016 251.00 1.000 251 2016-2017 251.00 1.000 251 2017-2018 251.00 1.000 251
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Table 3.3 Statistical Straight Line: Yc= a+bx School Year population X X XY a B Yc Y-Yc (Y-Yc) 2008-2009 169.00 1 1 169 154.80 18.60 173.40 -4.40 19.36 2009-2010 196.00 2 4 392 154.80 18.60 192.00 4.00 16.00 2010-2011 219.00 3 9 657 154.80 18.60 210.60 8.40 70.56 2011-2012 218.00 4 16 872 154.80 18.60 229.20 -11.20 125.44 2012-2013 251.00 5 25 1,255 154.80 18.60 247.80 3.20 10.24 Total 1,053 15 55 3,345
Total 241.60 =6.93
Table 3.3.1 Projected value School Year A b X Yc 2013-2014 154.80 18.6 6 266 2014-2015 154.80 18.6 7 285 2015-2016 154.80 18.6 8 304 2016-2017 154.80 18.6 9 322 2017-2018 154.80 18.6 10 341
Table 3.4 Statistical Parabolic: Yc= a+bx+cx School Year population X X X XY XY a b c Yc Y-Yc (Y-Yc) 2008-2009 169.00 -4 16 256 -676 2,704 212.31 9.30 -0.21 172 -3 7 2009-2010 196.00 -2 4 16 -392 784 212.31 9.30 -0.21 193 3 10 2010-2011 219.00 0 0 0 0 0 212.31 9.30 -0.21 212 7 45 2011-2012 218.00 2 4 16 436 872 212.31 9.30 -0.21 230 -12 145 2012-2013 251.00 4 16 256 1,004 4,016 212.31 Total 1,053 40 544 372 8,376 207 =333.49
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Table 3.4.1 Projected value School Year A Yi-1 Yc 2013-2014 54.25 4,047.75 4,102 2014-2015 54.25 4,102.00 4,156 2015-2016 54.25 4,156.25 4,211 2016-2017 54.25 4,210.50 4,265 2017-2018 54.25 4,264.75 4,319
Computation for the projection of first year college students Table 4.1 Arithmetic Geometric Curve: Yc= Yi+1/1+r School Year population %increase Yi+1 1+r Yc Y-Yc (Y-Yc) 2008-2009 3,885 - 16,141.68 1.000 15,763.36 -11,878.36 141,095,421.44 2009-2010 4,241 9.2 16,529.08 1.000 16,141.68 -11,900.68 141,626,177.02 2010-2011 4,335 2.2 16,925.78 1.000 16,529.08 -12,194.08 148,695,636.58 2011-2012 4,638 7.0 4,102.00 1.000 4,005.86 632.14 399,601.77 2012-2013 4,102 -11.6 Total 6.8 Total 431,816,836.82 =9293.19
Table 4.1.1 Projected value School Year Yi+1 1+r Yc 2013-2014 4,102.00 1.000 4,102 2014-2015 4,102.00 1.000 4,102 2015-2016 4,102.00 1.000 4,102 2016-2017 4,102.00 1.000 4,102 2017-2018 4,102.00 1.000 4,102
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Table 4.2 Statistical Straight Line: Yc= a+bx School Year population X X XY a b Yc Y-Yc (Y-Yc) 2008-2009 3,885 1 1 3,885 3,990.90 83.10 4,074.00 -189.00 35,721.00 2009-2010 4,241 2 4 8,482 3,990.90 83.10 4,157.10 83.90 7,039.21 2010-2011 4,335 3 9 13,005 3,990.90 83.10 4,240.20 94.80 8,987.04 2011-2012 4,638 4 16 18,552 3,990.90 83.10 4,323.30 314.70 99,036.09 2012-2013 4,102 5 25 20,510 3,990.90 83.10 4,406.40 -304.40 92,659.36 Total 21,201 15 55 64,434
Total 243,442.70 =220.65
Table 4.2.1 Projected value School Year A b X Yc 2013-2014 3,990.90 83.1 6 4,490 2014-2015 3,990.90 83.1 7 4,573 2015-2016 3,990.90 83.1 8 4,656 2016-2017 3,990.90 83.1 9 4,739 2017-2018 3,990.90 83.1 10 4,822
Table 4.3 Statistical Parabolic: Yc= a+bx+cx School Year population X X X XY XY a b C Yc Y-Yc (Y-Yc) 2008-2009 3,885 4 16 256 15,540 62,160 4,460.20 41.55 -28.13 3,849 36 1,296 2009-2010 4,241 -2 4 16 -8,482 16,964 4,460.20 41.55 -28.13 4,270 -29 818 2010-2011 4,335 0 0 0 0 0 4,460.20 41.55 -28.13 4,465 -130 16,952 2011-2012 4,638 2 4 16 9,276 18,552 4,460.20 41.55 -28.13 4,436 202 40,885 2012-2013 4,102 4 16 256 16,408 65,632 4,460.20
Total 21,201
40 544 32,742 163,308
59,951 =109.5
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Table 4.3.1 Projected value School Year a B X c X Yc 2013-2014 4,465 42 6 -28.13 36 3,702 2014-2015 4,465 42 8 -28.13 64 2,998 2015-2016 4,465 42 10 -28.13 100 2,068 2016-2017 4,465 42 12 -28.13 144 914 2017-2018 4,465 42 14 -28.13 196 (466)
PROJECT ED POPULATION FOR SCHOOL YEAR 2013-2014 Table 5.1
School Year Projected Population 2013-2014 19,171 2014-2015 18,247 2015-2016 18,538 2016-2017 14,490 2017-2018 15,075 2018-2019 19,411
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COMPUTATION FOR THE ACTUAL PROJECTED POPULATION FOR THE SCHOOL YEAR 2016-2017 TO 2017-2018 Table 5.2
2016-2017 2017-2018
projected population of wmsu 18,829 19,120 Add projected 4th high school 322 663 Less projected first year college 4,739 4,822 Add Transferee 41 74 Add Returnee 37 40
Total 14,490 15,075
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Historical data of supply within the vicinity of Western Mindanao State University in Litres
Table 5.3 Shows the computation of the historical data of supply in WMSU which relate to table 2.5 under marketing aspect Canteen/Owner's Name 1990- 2009 2009- 2010 2010- 2011 2011- 2012 2012- 2013 2013- 2014 Growth Rate (%) Janny Bee - 0.065 0.098 0.147 0.221 0.331 0.50 Shanes Fastfood 0.295 0.310 0.326 0.342 0.359 0.377 0.05 Maimona Majid 0.307 0.438 0.627 0.897 1.282 1.833 0.43 Magsayo Store 0.004 0.011 0.029 0.079 0.210 0.560 1.67 Oliver - - - - - 5.490 - Pilang Cervantes
Table 6.2.1 Projected Value School Year Yi+1 1+r Yc 2013-2014 7,589.45 1.162 8,815 2014-2015 8,815.15 1.162 10,239 2015-2016 10,238.79 1.162 11,892 2016-2017 11,892.36 1.162 13,813 2017-2018 13,812.97 1.162 44,759
Table 6.3 Statistical Straight Line: Yc= a+bx School Year SUPPLY X X XY A b Yc Y-Yc (Y-Yc) 2008-2009 4,206 1 1 4,206 2,911.37 860.26 3,771.63 434.23 188,555.69 2009-2010 4,368 2 4 8,736 2,911.37 860.26 4,631.89 -263.81 69,593.61 2010-2011 5,094 3 9 15,282 2,911.37 860.26 5,492.14 -398.28 158,628.55 2011-2012 6,203 4 16 24,814 2,911.37 860.26 6,352.40 -148.94 22,182.53 2012-2013 7,589 5 25 37,947 2,911.37 860.26 7,212.65 376.80 141,975.23 Total 27,461 15 55 90,985 Total 580,935.60 =340.86
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Table 6.3.1 Projected Value School Year A B X Yc 2013-2014 2,911.37 860.256 6 8,072.91 2014-2015 2,911.37 860.256 7 8,933.17 2015-2016 2,911.37 860.256 8 9,793.42 2016-2017 2,911.37 860.256 9 10,653.68 2017-2018 2,911.37 860.256 10 11,513.93 2018-2019 2,911.37 860.256 11 12,374.186
Table 6.4 Statistical Parabolic: Yc= a+bx+cx School Year SUPPLY X X X XY XY a b C Yc Y-Yc (Y-Yc) 2008-2009 4,206 -4 16 256 -16,823 67,294 5,087.66 430.13 50.56 4,176 30 885 2009-2010 4,368 -2 4 16 -8,736 17,472 5,087.66 430.13 50.56 4,430 -62 3,790 2010-2011 5,094 0 0 0 0 0 5,087.66 430.13 50.56 5,088 6 38 2011-2012 6,203 2 4 16 12,407 24,814 5,087.66 430.13 50.56 6,150 53 2,841 2012-2013 7,589 4 16 256 30,358 121,431 5,087.66 Total 27,461 40 544 17,205 231,011 7,555 =38.86
Table 6.4.1 Projected Value School Year A b X c X Yc 2013-2014 5,088 430 6 50.56 36 9,489 2014-2015 5,088 430 8 50.56 64 11,765 2015-2016 5,088 430 10 50.56 100 14,445 2016-2017 5,088 430 12 50.56 144 17,530 2017-2018 5,088 430 14 50.56 196 21,019
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ANNEX B COMPUTATION 1: Shows the computation of full capacity which relate to table 3.1, Page 50 under technical aspect FULL CAPACITY COMPUTATION
365 Days less: 61 days (2 months)-summer break less: 9 holidays from (June 2013 - February 2014) less: 16 days Christmas Break (Dec.13-Jan.5) less: 42 Sundays from (June 2013 - March 2014) 1 School Year = 237 days
(90cups/day) X (237 days) = 21,330 cups per year per juicer
Per cup is equivalent to 250 mL: 21,330 cups per year x 250 mL 5,332,500 ml per year 1,000ml
FULL CAPACITY=5,332.5L per year or 21,330 cups
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ANNEX C
Table 1 Shows the Equipment use in operation which relate to table 3.2, Page 50 under Technical aspect Name of Supplies & Materials Specification Quantity Supplier Price
Imarflex Juice Extractor IM-3180
Power source 220V/60Hz, Power consumption- 250W, Capacity- 50g, Weight- 5.3kg
1 units
Sulit.com
1,600
3D Blender Two speeds and a pulse setting Easy grip rotary dial High quality 2L glass jar (1.5L effective liquid capacity) Powerful 250 W motor
1 unit Sulit.com 2, 205.00
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Table 2 Shows the Tools and material use in operation which relate to table 3.3, Page 51 under technical aspect
Name of Supplies & Materials Specification Quantity Supplier Price Slushy Cups w/ Straw Thicker grade clear plastic slush cups, 8oz or 250ml slush cups
Cups 50 pcs. per 1 pack, Lid 100pcs & straw 100pcs
Southway square, Gateway, Shop O rama
Cup = 58.50 Lid = 65 Straw = 18
Total = 141.50
Ice Chest 48 qrt. 1 unit
El Bonito
1,100.00 Chopping board 35cm x 24cm Non-toxic, non-stick, stain resistant polyethylene chopping board 1 unit El Bonito 55.00 Knife Serrated Paring Knife Blade length: 10 cm Handle Material: RED POLYPROLYLENE Length: 206 mm Width: 22 mm Height:15 mm 1 unit El Bonito 33.00
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Basin
Material: Plastic Basin degree transparent: not transparent Press: circle shape choice 1 unit El Bonito 13.75
Table 3 Shows the Raw materials prices and supplier which relate to table 3.4 to table 3.7, Page 54 to Page 55 under technical aspect
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ANNEX D TABLE 4 Shows the Marketing program Breakdown Expenses for Smoothies relates to table 5.2 under financial aspect PRE-OPERATING EXPENSES Cost (Php) Raw Materials CAO Carrot P 16.00 Apple 187.50 Orange 210.00 Pia Banana Pineapple 206.25 Banana 80.00 Verdi Apple 187.50 Orange 210.00 Malunggay Gelatin 105.00 Evaporated Milk 213.45 Sugar 107.35 Ice 60.00 Packaging Expense 286.50 Electric Installation 1,810.00 Certificate of Business Registration 215.00 Tarpaulin 133.00 Total P 4,027.55
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ANNEX E SWOT Analysis In determining the business strategies, researchers have implemented the use of a SWOT analysis to develop a list of the factors most crucial to the success of Frugies. These factors are broken down into External (Opportunities, Threats) their relevance to Frugies success and projected onto a list of manageable key factors from which business strategies were derived. STRENGTHS 1. First of its kind There is no other smoothie store in the area that sells mixed fruit and vegetable smoothies, so the product will be new to the market, attracting a new healthy market of the on-the-go people. 2. Affordable price Employees as well as students and elementary pupils can come up with the money for buying the smoothies. 3. Freshness of product Since the company is producing its product in a made to order basis, the customers could take in newly extracted and blended fruit-vegetable smoothie. 4. Word of mouth One of the most credible forms of advertising because people who don't stand to gain personally by promoting something put their reputations on the line every time they make a reference. Thus, satisfied customers would tell the people how they like the smoothies so by doing that it could increase the company sales. In fact, the company makes its products based on its customers wants. 5. Location The companys stall is located at Western Mindanao State University, at the entrance of the College of Engineering and Technology where there is a chance for students and employees to get a quick and easy but nutritious smoothie.
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WEAKNESSES 1. Perishable commodity Will not have many outlets around to get people to know the business and product. There is only one stall in the area, by limiting the number of stall it will also limit the number of customers the company can gain. 2. Going into an already existing market There is already a number of outlet that offer similar products. the company just have to hope that by serving healthy products with fresh ingredients, its business will stand out to people rather than other alternatives.
OPPORTUNITIES 1. Bringing Healthy Drinks to the University Compare with all soda drinks, fresh fruit and vegetable mixed smoothie will be healthier for people especially students. The 100% fresh fruit and vegetable smoothie are a smart addition to any well-balanced diet, providing vitamins and minerals like potassium, vitamin C and folic acid. The product is also a convenient way for adults and children to help reach the recommended number of daily serving of fruits and vegetables.
2. To move with the current social and lifestyle changes In terms of lifestyle, students will change their drinking routine of beverages. Instead of soda drinks they will able to purchase the product because of its taste and the health benefits of fruit and vegetable smoothies
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THREATS 1. Misinformation about the products on health effects Misinformation about the product questions the safety of mixed fruit and vegetable smoothie if it will not ruin their digestive system that will result to loose bowel movement (LBM). Action Plan: To ensure that the companys product is safe to the health of the consumer, it must have a proof that will certify the safety in taking in the smoothies like DOST-FNRI certificate or other food laboratory research. 2. Weather changes The most relevant threat to the success of Frugies is the bad weather cycle when its rainy season, which will affect the sales. Sales of smoothies peaks in summer months and drops substantially during rainy months. 3. Power interruption One of the constraints of a Frugies is a power interruption. The product purchases through a made to order basis but it will be a loss if there is no electricity. 4. Unstable price of raw materials The price of raw materials is based on seasonality. It is inconvenient if the price increases.
Conclusion: Using a basic SWOT analysis, the major internal and external factors were taken into consideration and applied to create strategic plans that aim to take advantage of opportunities and strengths, while preventing threats and weaknesses.
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Annex F
These pictures shows the documentation of actual performance of the business
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1. How many times do you operate in a week? Everyday Three times a week Six times a week Other (please specify) ____________________
2. Which of the following beverages do you sell? Water Carbonated drinks Juice Fruit shake Coffee Others (please specify) ____________________ 3. For water dispenser, how many days does a five (5) gallon of water last? __________ 4. For bottled water,how many bottles were you able to sell per day? Small _____ Medium ____ Big ____ (Please specify how many mL each) 5. For carbonated drinks, how many bottles were you able to sell per day? 8oz________ 12oz______ 1L_________
6. For juice (plastic cups), how many cups were you able to sell per day? Small_________ Medium______ Large________ (Please specify how many mL each) 7. For bottled juice, how many bottles were you able to sell per day? Small_________ Medium_______ Large_________
_______Juice _______Fruit shake _______Coffee (Please specify how many mL each)
OBJECTIVE:
To determine the supply of beverages in Western Mindanao State University and to determine the Growth Rate.
Name of business: __________________________ Date: _____________ Owners Name: _____________________________
8. For fruit shake, how many cups were you able to sell per day? Small _____ Medium_____ Large______ (Please specify how many mL each) 9. For coffee, how many cups were you able to sell per day? Small_______ Medium______ Large_____ (Please specify how many mL each) Questions to find the growth rate: 1. When was your business started?_________________________ 2. How many cases/bottles/cups were you able to sell per day? _______Water _______Carbonated drinks 3. Is there an increase of your supply for beverages per day? Yes No If yes, please specify how many cases/bottles_________ 4. Estimate how many percent increase every year ________
Signature:________________________________
Western Mindanao State University College of Engineering and Technology Department of Industrial and Management Engineering SURVEY SHEET FOR THE PROMOTION OF FRUIT-VEGETABLE SMOOTHIES
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