Colegio de San Juan de Letran – Calamba

School of Engineering
Industrial Engineering Department

2nd Semester AY 2018 – 2019

IE101L – Production Systems Laboratory

Chapter IV

Submitted by:

Group #7

Cabrera, Danna Marielle T.

Brodeth, Meanne Grace A.
Dalwampu, Neila Marie T.
Huevos, John Daryl G.
Ocampo, Joshua Gyver B.
Tapiador, Patrinne Andrei L.

Submitted to:
Engr. Ma. Kathleen L. Duran, CIE, AAE, CLSSGB

Date:
April 10, 2019
 Operational Plan
Lapresa Supreme will be open 7 days a week for morning and afternoon snack
requiring multiple shifts. One of the staff will write the schedules. The schedules will be
written in a manner that will allow the ability to increase or decrease hourly labor
according to sales volume in order to maintain a consistent labor cost control. Proper
labeling and rotation techniques, accompanied by ample storage facilities will ensure
that high quality prepared product will be sufficiently available to meet the demands
during peak business hours. Replenishment and ongoing preparation will continue
during off peak business hours.

Upon arrival, customers will fall in line in the counter and will be asked for the order.
Once the customer’s order is taken, the order will be prepared by the staff. There will be
two staffs per day and each one of them will be responsible for ordering, receiving and
making the product. One of the staff will rely on operational checklists to verify that each
work shift has been properly prepared for and to insure the operational standards are
followed before, during and after work shifts.
The store layout, including the serving line, has been designed for efficiency and
flexibility to accommodate the fluctuation in customer traffic and peak snack period.
 Production

Figure 1 – MPS (Chase Strategy)

Figure 2 – Project Management

 C
A B E F G H
D

Figure 3 – Activity on Node

Figure 4 – Bill of Material (“Per 100 Serving”)

Production techniques & cost
For Production technique, we used Job Production which involves producing
small quantity of product; also the outcome is generally of a high quality since the whole
process is focused on one product. Also the food that the business sells must be freshly
made because it is a dessert.
We used graham, strawberry, and all purpose cream for our main ingredients
which would cost Php324, while condensed milk, ice cream, and strawberry syrup is
used for toppings which costs Php533.50 and Php250 for the Plastic Spoon & Cup.
Quality Control
Every ingredients required to make the product is inspected, since the product is
made freshly this means that the ingredients must also be fresh especially for the
strawberry. Also the worker will strictly follow the measurement required for each
ingredient to make the product.
Customer Service
It is an important factor to keep our good relationship with our customer. We
ensure that every customer will be accommodated in a professional way and make sure
the product that the customer will receive is high quality and serve on time.
 Inventory Control
We will ensure that the use of the inventory will be maximized to generate
maximum profit from the business. The owner will be ordering frequently in small
quantities from suppliers to avoid overstocks and order only enough supply for expected
number of production.
Product Development
For the development of product, we will be handling out surveys to customers for
the improvement of our product; we will also ask the customers personally for feedbacks
and opinion for a far more accurate and better data to keep them interested in our
product.

 Location
The qualities that we need in a location are first, near Colegio De San Juan De
Letran – Calamba, it is important that we are located near the campus since our target
customers are students and employees from Letran. Second, our location should
accessible for everyone, like our suppliers.
We will rent a space on the ground floor below the Rand Internet Cafe’s second
floor. The space would be efficiently used since our stall doesn’t require a large space.
The amount of space can also accommodate our customers. We also considered the
type of building where we will place our stall, it has the qualities that we need for in a
location. The building is in front of the school and most importantly, accessible for
everyone since it is near the school, dormitory, and eateries.
We abide on the zoning law’s rules and regulations since our business are far
from residential areas. We would also issue business license, so that we could operate
our business in the vicinity. We would provide food permit as well because our business
makes and sells food. Then if needed, we could also issue police clearance or permit.
Our business doesn’t require a lot of utilities. Besides the rent, we just need electricity
and water supply. Power or electricity is very important since lighting and appliances like
blender require a power source. And lastly, water supply. Running water is beneficial for
most businesses. From a health and safety perspective, it is important to have access to
water for first aid and basic hygiene.
For our type of business, it is important that our location is convenient to
transportation or to suppliers because our area would be easily accessible by everyone
and it would be easy to facilitate the procurement of goods, raw materials, and many
more. Our business also need an easy walk-in access because if we offer an easy walk
in access, we can accommodate huge number of customers. Our location doesn’t have
requirements for parking and proximity to freeway.

Figure 1. Proposed Facility (Map View)

Figure 2. Proposed Facility

 The Lapresa Supreme will be along Ipil-Ipil Street, near the Rand Internet Café.
Our business doesn’t require construction since there is already a space provided for our
stall.

For our business’ occupation expenses, we’ll be paying an estimated 3,000 PHP
for rent, around 300 PHP for water bills, and 800 PHP for electricity.

 Personnel
The Lapresa Supreme is consists of 6 employees. They are skilled workers, who
are requires specialized training and licensing.
One of the best ways to find employees is using social media to get the attention of local
job seekers. Finding the right employees, the first thing to do is show candidates why
they should want to work for you. Be attractive to the prospects, and be sure that you
attract them for reasons other than money. Recruit the best of the best of the best.
Hiring the wrong person can drain resources fast. When you recruit someone, be very,
very picky. Below is the pay structure for the employees of Lapresa Supreme.
Employees are working with the same process. They perform task that requires
knowledge on procedures and the ability to operate a variety of kitchen equipment.
Duties include: taking orders from customers and making/serving the product. They must
possess a high school diploma or equivalent and one year work experience performing
simple service crew tasks.

Rate Weekly Salary Monthly Salary

Worker I 80/ per hour 4,480 17,920

Worker II 80/ per hour 4,480 17,920

 Inventory
Inventory is known as the goods available for sale and raw materials used to
produce goods available for sale. Inventory represents one of the most important assets
of a business because the turnover of inventory represents one of the primary sources of
revenue generation and later earnings for the company's shareholders.
Raw materials are unprocessed materials used to produce a good. The raw
materials that are being kept are the strawberries and the ice. While the supplies are the
spoons, cups and lids that are used for the packaging of the product. Finished goods are
products that have completed production and are ready for sale or ready to use for the
final product. The finished goods that are being kept are the condensed milk, heavy
cream, strawberry syrup and the ice cream.
The strawberries are bought fresh every day, approximately 5 kilograms of
strawberries are bought everyday and is being kept in the storage room when not used.
When the stock for the cups, spoons and lids are less than 500 pieces, another 500 will
be bought for inventory. There will be always 10 extra stocks of the condensed milk and
heavy crème, 5 extra stocks of strawberry syrup and 3 for ice cream every day, and will
be kept for the other day if not used.
Inventory turnover measures how fast a company sells inventory and how
analysts compare it to industry averages. Low turnover implies weak sales and possibly
excess inventory, also known as overstocking. It may indicate a problem with the goods
being offered for sale or be a result of too little marketing.
Cost of good Sold per month: $79,520
Average Inventory per month: $37,500
79, 500 / 37, 500 º 2.12
This means that there would be 2.12 inventory turns per year. That it would take
about 6 months to sell and replace all inventories.
Seasonal inventory is stock, which is in high demand during particular times of
the year, such as during Christmas or Halloween. These periods of time often coincide
with the different seasons, and managers need to be proactive in preparing for the
waxing and waning of demand during these key times. We are producing cold sweets so
there is basically high demand during summer, April to May. There is also high demand
during school days because our market are the students from Letran Calamba.
There will be no lead-time for ordering because we are using just-in-time (JIT)
inventory system where in a management strategy that aligns raw material orders from
suppliers directly with production schedules. Companies use this inventory strategy to
increase efficiency and decrease waste by receiving goods only as they need them for
the production process, which reduces inventory costs. This method requires producers
to forecast demand accurately.
 Suppliers
Our main supplier is Waltermart Supermarket located in Waltermart Makiling
Branch in Calamba City. They sell almost all the food you need and the prices are lower.
They can supply all the ingredients we need for our Strawberry Graham Supreme.
Waltermart Supermarket provides comfort, completeness of offerings and reliability.
If there is a lack of ingredients in Waltermart Supermarket, Savemore
Supermarket will serve as our backup supplier for our ingredients. This is located in SM
Calamba. This supermarket is very reliable because it has been established for many
years by SM Prime Holdings.
For the strawberries, our supplier is Rosales Store located in Calamba City. It is
owned and managed by Mr Alex Rosales. Rosales Store is a simple store, but sells
different kinds of fruits. They can provide the strawberries with discounts because they
are going to be our main supplier.
List of Suppliers:
 Savemore Supermarket
Ground Floor, SM Calamba, Calamba City, Laguna
 Waltermart Supermarket
Second Floor, Waltermart Makiling, Calamba City, Laguna
 Rosales Store
Fruit Stand, Barangay Makiling, Calamba City, Laguna
References:

• “How to Calculate the Inventory Turnover Ratio?” Retrieved from

https://www.investopedia.com/ask/answers/070914/how-do-i-calculate-inventory-
turnover-ratio.asp
• “Inventory Turn Over Ratio Analysis” Retrieved from https://strategiccfo.com/inventory-
turnover-ratio-analysis/
• “The Problem With Seasonal Inventory On Inventory Control” Retrieved from
https://www.unleashedsoftware.com/blog/problem-seasonal-inventory-control