I.

INTRODUCTION

After identification of the target market, and analysis and evaluation of the different
factors that influence the proposed business, Eala Inc. brings form and structure to
the proposal by identifying its technical aspects.

The proposal involves the establishment of Pantsaloon, a boutique specializing in

the customization and tailoring of jeans for the fashionable young Filipino. It will be
positioned as a specialty shop that offers a twist to the basic jeans by allowing it to
be customized according to one’s own style and whim, as well as assuring its
customers of a perfect fit all the time.

This principle is the central focus of the entire technical process. From the raw
material selection and design conceptualization to the actual production process
and visualization of the structural designs and perspectives, everything about
Pantsaloon would translate to comfort, fashion and individualism.

The initial stage of Pantsaloon’s business plan involves opening its first store at J&R
Commercial Center in Katipunan. With over 75 fabrics, 11 cuts, 16 pocket types, 4
waistband types, and infinite possibility of designs, Pantsaloon will produce 200
different jeans per month, meeting about XX % of the projected demand.
Pantsaloon shall strive to acquire a larger share in the big “pie” over the years, as
the business gradually makes a name in the jeans market.

With much care and consideration given to the plans, projections, procedural
requirements and legal practices needed in setting up the store, Eala Inc. deems
Pantsaloon technically feasible and operational in the market.

Executive Summary
Through the analysis of the crucial processes and costs involved in production flow,
human resources management, store operations and construction, and legal
requirements to be complied with before operation, Eala Inc. endeavors to
determine the technical feasibility of Pantsaloon.

What the group has done is to study the process of manufacturing jeans, and from
here build the production program which Pantsaloon shall adhere to in its quest to
produce perfectly-fitted jeans. In the course of building this production program and
establishing Pantsaloon’s own production process, decisions on outsourcing,
supplier selection and equipment to be used had to be made.

The first major decision was whether to outsource tailoring services, or to hire
personal tailors and invest in jeans manufacturing equipment to produce the jeans.
A cost-benefit analysis on these two options led to the conclusion that hiring in-
house tailors and investing in equipment, while more costly, is better for the
business in the long run because it will enable the business live up to its promise of
producing high quality and perfectly fit jeans, with quality control better exercised
when production is done in-house.

Purchasing of materials will also be done by Pantsaloon. This is also to ensure that
only the best materials are used in the production of jeans. Also pursuant to its
commitment to quality, tailors, cutters and designers shall undergo a strict selection
process and an even more rigorous training. Only the most precise and meticulous
tailors and cutters shall be hired, while the most dedicated, professional, flexible
and creative designer will take on the job of assisting the customers in
conceptualizing their jeans.

Accordingly, the store structure has also been designed to reflect what the
Pantsaloon experience would be all about. The group plans to maximize 25 square
meters of less expensive but well visited leased space in J&R Commercial Center,
located just beside Shakey’s and McDonalds-Katipunan. An all-white industrial
interior, complemented with splashes of color shall further enhance Pantsaloon’s
idea of adding a twist to something basic. Designed with modern minimalist
comfort, the space will cater to the needs of its customers, their companions, and
the store employees. Construction and renovation costs would reach approximately
P 293,629, while total monthly operating costs are estimated to amount to P
316,266.67.

Before the business can be fully operational, the mayor’s office has to issue the
business an official permit to operate. Before this issuance however, certain legal
requirements such as barangay clearance, community tax clearance, sanitary
permit, and other clearances have to be secured.

Furthermore, to ensure smooth operations, the group focused on Eala’s

organizational structure. Department managers, directly reporting to the Chief
Executive Officer, shall have responsibilities specific to their department. Because of
this, Eala Inc. will provide these various positions job descriptions and qualifications
to guarantee a dynamic group of people working for the constant growth and
improvement of the Pantsaloon brand. To aid in the proper implementation of
individual duties, basic regulations for inventory, cash and sales management are
also made available.

Finally, rough estimates of all required costs were summed up to find out the initial
investments and operating funds needed to run the Pantsaloon boutique.

II. PLANT CAPACITY

Capacity refers to the attainable rate of output that can be produced. Eala’s plant
capacity largely depends on the number of jeans a tailor can make per month. Each
tailor, stationed at a one sewing machine can make up to 11 jeans per day. Two out
of three tailors working per day, can manufacture about 22 customized jeans per
day or about 660 per month (30 working days). This theoretical capacity was
obtained under assumption all the equipment will function properly through out the
entire 8 hours of work, eliminating down and slack time. Since this estimate already
includes set-up time, at least 90% of capacity, 600 jeans per month, is sure to be
met.

The store will maintain the production volume rate required to meet XX% of the
projected demand throughout the ten years. The increases in demand will be offset
by gradually increasing capacity utilization.

III. TOTAL YEARLY PRODUCTION SCHEDULE

A. Production volume
Production will be based on the projected annual demand and the computed market
share in the Market Study of XX%. To get the production volume, the projected
annual demand for Pantsaloon products was multiplied by the computed market
share that Eala can meet given its present capacity. The figures are shown below:

Year Annual Effective Production Volume

Demand
1 375,249 30,733
2 355,029 29,077
3 395,027 32,353
4 414,215 38,447
5 450,420 40,577
6 469,441 36,889
7 495,443 33,924
8 546,784 45,084
9 550,475 44,782
10 599,216 49,076
IV: PRODUCTION PROCESS

A. Product Design
Pantsaloon believes that when it comes to jeans, fit is everything. Handmade and
carefully crafted, each pair of jeans aims to provide a fusion between fashion and
comfort by producing jeans that are not only individualistic, stylish and hip, but also
tailored to perfection

Pantsaloon will be offering jeans in every imaginable cut, fabric, color,

embellishment and design, with the limit going as far as the customer’s
imagination. Every pair shall be customized according to the customer’s demands,
assuring them that they get the perfect fit everytime. Whether it be classic cuts or
the latest in jeans design - all cuts, fabrics, styles and designs are purely the
reflection of the customer’s individual taste.

Jeans will be the central theme of Pantsaloon’s product line, with designs as diverse
and dynamic as its different customers strive to keep up with the swiftly changing
world of fashion. As mentioned before, Pantsaloon shall present a wide array of
fabrics, cuts, styles and designs to ensure that the store has something for
everyone. The challenge to Pantsaloon now is to deliver every pair of jeans in its
finest quality – perfect stitching, premiere fabrics and flawless fitting that makes it
distinguishable from every other pair in the market.

The preproduction stage of Pantsaloon’s jeans adds a service dimension to its line.
Beginning with design conceptualization, the customer has the option to seek the
help of an in-house designer in selection of the fabric, cut, style, color and design.
After measurements are taken, a special software shall further aid in the
visualization by combining the ideas and measurements, simulating the actual look
of the jeans on the customer. After the design idea has been finalized, jeans
undergo a meticulous cutting, sewing, washing and designing process to make sure
that the jeans are no less than perfect when finished.

1. Cuts
The cut refers to the actual shape of the jeans. It is a matter of pattern
design. Not all fits work with all possible cuts. Some combinations may seem
to work today (a possible trend), but in a few years, may just look funny or
dated. Still, this is where the fun begins. No amount of washes or
embellishments can make up for a bad cut.

This is probably the most important styling decision. Leg cuts that Pantsaloon
will offer can be summarized as follows:
• Straight Leg Jeans: Traditional cut with a straight narrow leg that does
not flare at the ankles
• Flared Leg: Jeans Narrow at the knee, and an extra wide flare at the
leg. Most common leg type on low rise jeans.
• Boot Cut Jeans: Cut to skim the thigh with a slightly flared lower leg
• Tapered Leg: Jeans narrow towards the ankle
• Capri: A leg cut that usually ends just below the knee or at midcalf. The
term "crops" is sometimes used interchangeably with Capris, but should
actually refer to pant legs that fall about three fourths of the way down
the calf.
• Tight/Skinny: A close fit throughout the leg
• Stove Pipe: As the name implies, an oversized straight leg cut
• Bell Bottoms: A wider, more exagerated flare named and made
popular in the 1960’s, often used with low rise jeans and ultra low rise
jeans
• Cropped: Jeans can be cropped any length from the midcalf to the
knee. Ankle LengthCut just above the ankle is used for a summery look
• Gaucho: Denim gaucho pants may be a passing fancy, but they sure
are fun and can look great paired with the right boots.
• Cuffed: A Fold at the end of the legs. Not strictly a leg cut, but a
common finish, sometimes added by the designer and sometimes by
the user of the jeans for a personal touch.
 Straight Flared Boot Cut Tapered Tight Capri

In keeping with the stores image of modishness and fashionability, new cuts
will be added as the market’s taste evolves.

2.Fit
Fi t refers to the general “looseness” or “tightness” of a pair of blue jeans. Fits
that Pantsaloon shall offer on its opening include the following:

For Men's Jeans:

• Regular/Traditional/Classic Fit: Slim seat, slim thigh, usually with
tapered leg. (Western variation of this fit is same but with a boot-cut
leg)
• Loose Fit: Full seat, loose thigh, tapered leg. Lots of room to move
around in, for active men, very comfortable. For laid back, relaxed
types. Includes anywhere from 1 to 4 inches of additional fabric in the
thighs and butt.
• Relaxed Fit: Relaxed seat, relaxed thigh, often matched with a
tapered leg. Includes an extra inch in the rear. This is the style for the
guy who is too busy to worry about his look and is the most popular
fit for men.
• Baggy: Refers to extra loose legs, very popular in the 1960’s with
tight low rise waists.
• Tight/Skinny: An upcoming, edgy trend. Tight fit through-out
 Classic Fit Relaxed Fit Western Cut Loose Fit

For Women's Jeans:

• Slim Fit Jeans/Skinny: Close fit through the seat and thigh, usually
accentuated by tapered leg cut.
• Easy Fit Jeans: Similar to relaxed fit with a lower rise and more
room in the seat and thigh
• Natural Fit Jeans: Slightly fuller fit through hips and thighs

As it is with cuts, more fits will be added to Pantsaloon’s portfolio in order to

keep up with trends.

3. Fabrics
The selected cut can only be perfected and achieved if the right fabric is
selected. To avoid problems in the construction of pants, the in-house
designer must advise the customer early on which fabric will work best for
the design they are looking for. Because designs are expected to be diverse,
Pantsaloon intends to have a wide array of fabrics to choose from. Pantsaloon
will likewise make certain that they will procure the finest fabric at the most
reasonable prices.
Fabric for pants can range from twill and suede, to corduroy and khaki.
However, as mentioned before, special attention shall be given to denim, as
jeans will be the product specialty of Pantsaloon. Specifically, Pantsaloon’s
fabric line will include the following:
• Canvas
• Army
• Denim - Ordinary
• Denim - Stretch
• Corduroy
• Twill
• Suede

Fabrics can also be selected according to their feel preference. There are
those who like their jeans soft and flowing, while some prefer theirs stiff and
crisp. Because of this, the texture of denim fabrics shall be given attention to
because the feel of the pants is also deemed to be very important to the
customer.

4. Pocket Types
Some pocket type options include:
• 4-pocket: No change pocket

• 5-pocket: This is the most widely used pocket configuration, with the
fifth pocket being the small coin pocket.
• Fashion Pocket: Embellished, decorated

• Flap Pocket: Can be very flattering on a woman with a small rear

• Front Patch Pocket: Attached to the exterior of the pants

• Multi-pocket: As used in carpenter/cargo styles

• Rear Patch Pocket: Attached to exterior of pants

• Seamed Pocket: Pocket in inside pants, opening finished with a seam

• Utility Pocket: As used in cargo and carpenter pants

 Pocket Types| Pocket designs available at Pantsaloon

5. Waistband and Back Yoke

The waistband is made of a double layer of denim, it is more rigid, allowing it
to hold your tummy much like a girdle. A wider waistband will help even
more.

Jeans with waistlines that are cut higher in the back, and lower in the front,
are figure-flattering. The most flattering jeans have 1% to 2% lycra or
spandex in it. This elasticity allows them to hold everything in place without
totally sacrificing comfort.
 The back yoke allows designers to play with perceptual illusions that, if used
for the right reason, can enhance the look. The size and shape of the back
yoke directly affects the size and placement of the rear pockets, and this is
crucial.

No Yoke With
Inverted Sweet
Straight "V" Shape Wide Yoke Seamed
Arc Heart
Pockets

Here are some of the options:

• Inverted Arc: Gives the illusion of a fuller rear.
• Straight (Horizontal): This yoke line will make the waist appear
wider.
• “V” Shape: Most widely used and most flattering back yoke cut.
• Sweet Heart: This yoke type can truly enhance a small derrière, as
the cut is clearly outlining a curvy heart shape. It works very well with
stretch tight jeans since it allows the pants to conform to your figure
• Extra Wide: This cut is used to achieve the “falling pants” look. The
illusion is enhanced by the placement of the pockets way below the
butt. This look is great for some guys, though not very flattering to any
woman’s figure.
• No Yoke: Usually combined with seamed pockets. The garment is
contoured by the use of darts. This look is very conservative, and with
a proper fit can work very well for women with large rear ends.
 6. Fly Types
• Zippered Fly
• Button Fly With Hidden Buttons
• Button Fly With Exposed Buttons
• Laced Fly

7. Waist Types
The most obvious variation in waist type comes in the “rise”, which means
nothing more than how far below the belly button the jeans will sit. It is
measured from the crotch to the waist. Some designers use this as a major
styling category, because of the unparalleled popularity of low and super low
rise jeans in the last few years. It is nonetheless a subcategory of the type of
cut.
• Regular Rise Jeans: Waistband is located precisely on the waist
• Low Rise Jeans: Waistband is located typically 2-3 inches below the
belly button. The most popular rise in most denim brands, especially
for women.
• Super Low Rise Jeans: Dangerously low, 3-5 inches below the belly
button.
• Brazilian Low Rise Jeans: Brazilian jeans have almost come to
define a waist type of their own: Ultra Low Rise Jeans. They have even
come to incorporate a 2 inch zipper! Brazilian jeans are growing in
popularity and are renowned for their daring sexy cuts, high quality
and original embellishments. They are unique and worth looking into.
8.

Natural Waist Slightly Low Rise Ultra/ Brazilian

Below Navel Low Rise
Embellishments
While there are those who are satisfied with simple, unadorned jeans, there
are also those people who like embellishments on their pants. A variety of
materials have been selected to provide ornamentation to jeans. These
materials include the following:
• appliqués
• patches
• beads
• embroidery
• sequins
• rhinestones
• Swarovski crystals
• metal studs
• lace

9. Sample designs

DESIGN 1| medium wash peacock embroidered

jeans
DESIGN 2| dark natural vintage patch
bootcut jeans

DESIGN 3| medium wash beaded jeans

 DESIGN 4| medium bootleg skull jeans

B. Raw Materials
Raw materials comprise about 55 % of the finished product, while 35 % goes to
labor costs attributed to the in-house designer, tailors and cutters. The remaining
10 % shall be allocated to overhead expenses. Because raw materials are important
determinants of quality, the selection of a supplier which will provide for the finest
quality of materials at a reasonable price is of utmost importance to the business.
Pants come in a variety of fabrics, and which among these fabrics to be used is
actually the choice of the customer. However, not all fabrics are suitable for pants.
Only when a fabric achieves an over-all tailored look does it become appropriate for
pants. These fabrics include corduroy, canvas, denim, leather/suede, twill, and
woolen tweed. While all these are readily available at the store, jeans are
Pantsaloon’s specialty. Henceforth, an extensive denim fabric line shall be arranged
and will offer the following:

Any other fabrics not immediately available in the store can be requested for or
brought in personally by the customer.

Likewise, threads, buttons, rivets, zippers, labels and other accessories add value to
the pants. Threads to be used are those which have an established reputation of
strength, buttons and rivets are those which don’t tarnish immediately, and zippers
should glide smoothly. Other accessories such as beads, crystals, and embroidery
shall be unique and interesting in order to maximize the possibility of making each
pair of jeans unique.

1. Suppliers
Suppliers of raw materials will come from Divisoria, since they have an
abundance of textiles, fabrics and other materials needed in the production of
jeans. Aside from the overwhelming variety, these materials also come in
very affordable prices.

Selection of fabric suppliers will depend primarily on the (1) quality of fabrics
provided, (2)extent of fabric offerings and (3) the reasonability of the prices
by which these fabrics come. Several fabric suppliers will be obtained as one
supplier cannot possibly have all the fabrics needed. Also, the expected
competition between them is expected to drive the prices down and give the
business more bargaining power in terms of acquiring discounts on materials.

However, for other materials such as threads, buttons, zippers, and

embellishments, only a couple of suppliers will be selected, since product
offerings are similar and the price differences are insignificant. The only
difference between suppliers lies in the depth of their product lines, and
hence, the two suppliers with the most complete and diverse lines would be
selected.

The following are some of the possible suppliers who can provide the
necessary materials needed for production input:

MATERIAL SUPPLIER ADDRESS CONTAC

T NO.
Fabrics M & P Commercial 107 Ylaya Center market, 247-
593 CM Recto Ave, 4617
Divisoria
Good Morning Textile Pasilio C, Stall no. 72-74, 245-
Ent. 577-585, CM Recto 2478
Ave., Divisoria 245-
5194
Bull Magic Pasilio A, Stall No. 14-16, 245-
Merchandising Ent. 488-491, CM Recto 0142
Ave., Divisoria
Supplies Marwin Trading 601 CM Recto Ave., 245-
Tondo, Manila 2517
Fashion Rev 577 General Shopping 245-
Center, Divisoria 0128
Embellishmen Carolina’s Lace Pasilio S Stall No. 9, 14, 241-
ts Shoppe 16, Yangco Market, 8284
Divisoria 243-
1740
Label Los Amigos & Sons, 928 Ilaya St. Tondo, 245-
Inc. Manila 0267
244-
5266
245-
0252
Paper Bags Plaza de Amigos LS -03 Tutuban Prime 252-
Block Center, Tondo, 2122
Manila 253-
 4928
0917-
8117500

Credit terms and discounts on transactions between Pantsaloon and all the
abovementioned suppliers will be included in the terms of agreement
between the company and the respective supplier, and determined on a per
transaction basis.

Fabric purchases will be in portions, because purchases requirements depend

on the demand for these fabrics. However, should one fabric prove to be
more popular than others, a larger amount will be bought so discounts on
bulk purchases can be availed of.

Purchases of the remaining materials will be in bulk, since their suppliers

don’t engage in anything but wholesaling. Furthermore, it would be more
practical to buy them in large quantities as they are materials that are hardly
dependent on the customer’s preference.

C. Production Arangements
1. Cost Benefit Analysis
In-house manufacturing
Advantages. Pantsaloon promises its customers a perfect fit all the time, and
it is important for the business to get everything right in order to preserve the
integrity of its name. The main advantage of in-house manufacturing for the
business is the close supervision of the pants-making process. Being a
business that banks primarily on quality, this is a very important
consideration. Closely supervised manufacturing will allow for constant
quality checks to ensure that the jeans are being made exactly the way the
customer wants it.

Since Pantsaloon is in the business of customizing, none of its products are

mass produced. Because of this, attention to detail is necessary, and in-house
manufacturing paves the way for meticulous monitoring of products.
Aside from excellent quality control, in-house manufacturing also provides
control over deadlines and production schedules. Delays can be avoided,
since everything that needs to be delivered is on hand. Also, worries over late
deliveries can be completely eliminated. The production schedule can move
exactly as planned or be changed immediately to meet deadlines, since all
aspects of production are under the control of the management.

Lastly, in-house manufacturing will benefit Pantsaloon by eliminating the

costs that subcontractors can impose in production orders. Such costs include
delivery, labor and overhead costs that the company might incur.

Disadvantages. The main disadvantage of in-house manufacturing would be

the large initial investment costs, as well as the operating costs that the
business would need to sustain.

Establishing in-house manufacturers would require the business to procure

sewing machines, edging machines, buttonholing machines, and other
materials needed for manufacturing jeans. Not only would this constitute a
big part of the capital, but it would also result to added warehousing,
inventory and maintenance costs. It would also require the company to hire
in-house tailors, designers and cutters, whom the company will have to
compensate with salaries and benefits. All these things would translate to
substantial increases in overhead costs for the company.

Outsourcing
Advantages. Outsourced production will rid the business of the costs brought
in by purchasing and maintaining equipment and other auxiliary materials
such as thread, etc. It would also reduce overhead costs of the business,
since expenses for electricity, warehousing, and inventory will not be
shouldered by the company. There would also be a significant cut in the
salary expenses allocated for tailors and cutters, as the business would no
longer need to hire them. Furthermore, costs of training will be completely
eliminated.
Disadvantages .Once labor is outsourced, the business automatically puts
product quality at risk. Without the direct supervision that in-house
manufacturing offers, jeans may not be manufactured as well as the
customers expect to since quality cannot be constantly monitored. This would
translate to repair costs and revenue losses because of discounts offered for
substandard products.

Also, delays on delivery could result because subcontractors have a tendency

to go beyond the expected deadline. This is fatal to the business’ goal of
maintaining customer loyalty, since prompt delivery is essential to any
service-oriented enterprise.

** Because Pantsaloon banks highly on the quality of jeans it produces, the

company deems in-house manufacturing more suitable for its operations.
While investment costs could pile up initially, the long-term benefits of in
house manufacturing far outweighs the initial outlay. Furthermore, since
Pantsaloon promises to produce jeans hat are exactly to the customer’s
liking, attention to detail is necessary, and this can only be done properly if
the company engages in in-house manufacturing.
 IN HOUSE SUBCONTRACTI DIFFEREN
PRODUCTION NG CE

INITIAL CASH
Table 1| COST BENEFIT ANALYSIS
OUTLAY
Leasehold
Improvements
Working Tables and
chairs 5710 5710 0 0 5710
Equipment
Sewing Machines 30000 0 0
Edging Machine 15000 0 0
Buttonholer 5000 50000 0 0 50000
Supplies
L-square 220 0 0
curved ruler 220 0 0
scissors 600 1040 0 0 1040
Training Costs 15000 0 15000
TOTAL INITIAL CASH
OUTLAY 71750 0 0 71750

OPERATING COSTS
VARIABLE COSTS
Direct Materials
Fabric 31124 31124 0
Thread 264 0 264
Zipper 1962 0 1962
Buttons 210 0 210
Rivets 325 0 325
Labels 3000 3000 0
Total Direct
Materials 36885 34124 2761
Direct Labor 0 50000 -50000
Indirect Labor
(washing) 15000 15000 0
Total Variable Cost 51885 99124 -47239
FIXED COSTS
Direct Labor 48000 0 48000
Factory Overhead
Factory Supplies
embellishments 3000 3000 0
Depreciation of
Equipment 416.67 0 416.67
Utilities 9090 6630 2460
Repair and
Maintenance 0 0 0
Insurance 1875 0 1875
Total Factory 14381.6
Overhead 7 9630 4751.67
62381.6
Total Fixed Cost 7 9630 52751.67
2. Product Flow

Pre- production Production Post Production

Costing

• Materials purchase • Serging • Storage

• Pre-washing and drying
(subcontract)
• Design conceptualization
• Materials selection
• Measurements
• Design simulation and
adjustment
• Final design
• Cutting • Delivery
• Sewing • Fitting
• Seam finishing • Alterations
• Topstitching • Final delivery
• Closures and Hems
• Additional designs
• Quality inspection
• Production adjustments
• Costing and pricing

Figure 1| Product Flow

a. Pre-production.
The preproduction stage involves all the necessary procedures before the
actual construction of the jeans.

The first two procedures involve materials preparation, the first of which is the
purchase of materials from the suppliers. As mentioned in the preceding
sections, all materials other than fabric will be purchased in bulk. This is
followed by pre-washing, since denim has a tendency to shrink, stretch and
fade when washed. This also removes any sizing, which can cause skipped
stitches, and softens the fabric. (If the label on the end of the bolt indicates
the fabric is Sanforized, then the fabric has been treated, and the shrinkage
will not exceed 1% in any direction). Pre-washing shall be outsourced, as this
is the norm in the jeans manufacturing industry.

When a customer enters the store, the service begins by conceptualizing the
design. Design conceptualization includes the selection of cut, style, wash
and embellishment of the jeans. The customer may already have a design in
mind, or he or she may want to consult with the in-house designer as to what
cut and style would best enhance the customer’s figure.
After the design has been selected, materials for the construction of the jeans
will be selected. Fabrics will be catalogued so that the customer can actually
get a fell of the fabric. Threads, buttons, zippers and embellishments can be
selected by the customer in a separate catalogue. During this procedure, the
designer advises the customer on which fabric will work for a particular
design, and which materials would adhere to the selected fabric. This is to
minimize adjustments and reproductions during the production process.

After the materials to be used are finalized, measurements of the customer is

taken twice. The first measurement involves the customer trying on the
“dummy jeans, ”an oversized pair of jeans, which the tailor will use to
determine the tightness or looseness of fit that the customer wants. The tailor
tapes the jeans according to the desired fit, and afterwards proceed to take
the 7 key measuring points for jeans.

1 – crotch
2 –
length
3
3 – waist
4 – hips
1
4 5 – thighs
5
6 – knee
7 – hem

6 2

Figure 2| 7 Key Points for Measuring Pants

After the key measurements are taken, the tailor then encodes the design,
material and measurements into the special computer software to simulate
the over-all look of the jeans on the customer. Final adjustments on the design
are made at this point, after which the design is finalized and submitted to
the cutters to start the production process. The customer is also given a
specific finishing date, when he or she would come back to claim and fit the
jeans.

b. Production
The production process begins with serging, or cutting the fabric in a zigzag
manner to avoid raveling. The jeans shall then go to the master cutter and be
cut. When cutting out the pattern, a withnap cutting layout is used, and
facings are cut from lining or contrast fabric in order to reduce bulk.

Sewing immediately follows after cutting. All projects, especially those

involving denim, begin with new needles as denim dulls needles quickly. The
heavier the denim, the larger the needle required.

Heavyweightdenim 100/16
needle
Mediumweight denim 80/14 needle
Lightweight 75/11 needle

Denim needles, having longer, sharper points that penetrate the close weave
of cloth more easily, and larger eyes that accommodate decorative
topstitching thread, will be purchased for best results. As for threads,
polyester or cotton-wrapped polyester thread will be used for standard
sewing, while decorative threads will be used for topstitching.

Denim is actually sewn like any other firmly-woven fabric. However, it frays
easily so seam finishing is essential to the process.

To seam finish denim pants, a test seam is stitched to determine the best
stitch size. Heavier fabrics need fewer stitches per inch than lighter weight
versions. Heavy denim is sewn with about 10 stitches per inch and lighter
denim with about 12 stitches per inch (3 mm). For even feeding of the fabric,
thread tension and presser-foot tension is reduced slightly.

Denim can be sewn with a standard 5/8" (1.6 cm) seam. However, most
denim garments feature flat-fell and topstitched seams. Stretch denim
requires a stretch stitch. The most popular denim seam is the flat-fell seam
because it’s very durable and gives a nice, clean finish on the inside of the
garment.

Topstitching gives denim its trademark look, as well as decorative appeal.

Heavy contrasting threads such as buttonhole twist or decorative thread
designed for topstitching will be used.

After topstitching, attention is now given to closures and hems. Machine

worked buttonholes, zippers and decorative snaps are the most popular types
of garment closures on denim. Hems are most often stitched by machine with
one or two rows of narrow topstitching.

All other additional embellishments and finishing touches are added to the
jeans before they undergo the first quality inspection. With quality inspection,
the jeans are closely scrutinized and examined for any damages or diversions
from the fit and design that the customers specified. Production adjustments
follow, with all imperfections ironed out and fixed to get the jeans as close as
possible to perfection. Only after these tedious processes shall the costing
and pricing of the jeans be done. The total costs for constructing every pair of
jeans including direct and indirect raw materials, labor and overhead are
computed to determine the price. A gross margin of 35% of manufacturing
costs will be added to the total costs to determine the final selling price of
every pair of jeans.

c. Post Production.
After the jeans are priced, they will be stored in the storage units located
within the store premises. No more additional warehousing is needed, as
these jeans will not be stored for long periods of time.

When the customer comes back on the specified delivery date, jeans are
given out for fitting. Because Pantsaloon assures that jeans are always a
perfect fit, any flaws duly faulted to the failure of the business to meet quality
standards shall be altered for free, and the jeans will be sold for 50% off the
original sale price. Once the alterations are finished, the jeans can finally be
taken home and enjoyed by the customer.

Table 2| Production Schedule

Steps DAYS
1 2 3 4 5
Design conceptualization
Materials selection
Measurements
Design simulation and adjustment
Serging
Cutting
Sewing
Seam finishing
Topstitching
Closures and Hems
Additional designs
Quality inspection
Production adjustments
Costing and pricing
Storage
Delivery
Fitting
Alterations
Final delivery
2. Costing

Table 3| Direct materials

unit total
Fabric kinds cuts price unit order unit total
per
Canvas 10 3 108 yard 37.5 yards 4050
Army 4 3 120 15 1800
Denim -
Ordinary 9 3 108 33.75 3645
Denim -
Stretch 8 3 76.8 30 2304
Corduroy 22 3 120 82.5 9900
Twill 20 3 100 75 7500
Suede 5 2 154 12.5 1925
3112
4
Thread
per
white 35 roll 4 rolls 140
colored 31 4 124
264
Zipper
per
7" 5.3 piece 100 pieces 530
8" 5.5 100 550
per
YKK 7" 180 dozen 3 540
YKK 8" 114 3 342
1962
Buttons
USA 60 per 2 orders 120
 order
Metal 90 1 90
210

per
Rivets 65 order 5 orders 325

per
Labels 0.6 piece 5000 pieces 3000

Table 4| Supplies
per
Shears 150 piece 4 pieces 600
L-square 220 1 220
Curved Ruler 220 1 220
Tape Measure 30 2 60
Embellishmen
ts 3000
Dummy Jeans 250 2 500
Table 5| Monthly Production Costs
4600
Variable
Direct Materials
Fabric 31124
Thread 264
Zipper 1962
Buttons 210
Labels 3000
Rivets 325
Total 36885 36885
Indirect Labor (Washing) 15000 15000
Total Variable Costs 51885 51885
Fixed
Direct Materials
embellishments 3000
Direct Labor (wages)
tailor 36000
cutter 12000
Total Direct Labor 48000
Indirect Labor
designer 20000 68000
Rent Expense 12500
Depreciation of Equipment 416.67
Utilities
electricity 8390
water 700 9090
Transportation 3000
Repair and Mantenance 0
96006.6
Total Fixed Costs 7
147891.
Total Production Costs 7
V: STORE OPERATIONS

A. Organizational Structure

Chief
Executive
Officer

Human
Finance Operations Marketing
Resources
Manager Manager Manager
Manager

Market
Jeans
Accountant Cashier Designer Cutter Researcher/
Engineers
Purchaser
Figure 3| Eala Inc. Organizational Structure

1. Functions
Chief Executive Officer
General Function: in-charge with the overall management of the firm
Duties and Responsibilities:
• Formulates overall policy for Pant Saloon
• Sets goals and objectives for the company
• Acts as the primary decision-maker regarding ideas and suggestions
proposed by the managers
• Conducts regular meetings with managers to discuss business issues as
well as to ensure smooth operations of the business
• Keeps Board of Directors and stock owners posted on the status of the
business

Finance Manager
General Function: In-charge of investment and financing decisions for the
company
Duties and Responsibilities:
• Takes charge of the budgeting, capital allocation, and cost control
• Handles credit management
• Forecast funds
• Allocates dividends and incentives
• Prepares long-range plans which include capital budgeting decisions on
expansion, replacement, etc., and cost appropriations
• Determines the financing mix and sources of funds optimal to the
needs of the firm
• Coordinates with the accountant and cashier regarding the firm’s
financial status

Accountant
General Function: In-charge of generating financial reports and documents to
the stockholders and regulatory agencies
Duties and Responsibilities:
• Handles bookkeeping responsibilities
• Prepares financial statements
• Prepares payroll for employees
• Handles the receivables and payables account

Cashier
General Function: In-charge of daily sales transactions
Duties and Responsibilities:
• Gives receipt to customer after every payment of purchase
• Calculates daily sales
• Assists Operations Manager in generating monthly sales report
• Turns over daily sales to the Finance Manager
• Acts as receptionist inside the store

Human Resources Manager

General Function: In-charge of all Human Resources activities which include
recruitment and selection, training and development, performance appraisal,
compensation, benefits and incentives regulation, among others
Duties and Responsibilities:
• Administers recruitment and selection of employees
• Conducts examinations and interviews for applicants
• Implements personnel rules and regulations
• Conducts performance appraisals
• Approves staff loans
• Manages work hours, day-offs, and leaves of employees
• Spearheads planning of recreational activities for the employees
• Studies current wage levels in the industry
 • Ensures compliance with labor laws regarding compensation and
benefits
• Decides on resignation or termination of an employee

Operations Manager
General Function: In-charge of the overall management of the production and
operations
Duties and Responsibilities:
• Manages the store’s daily operations
• Generates monthly reports on sales, inventory, utilities, and other
necessary items concerning the store
• Receives and records incoming supplies delivered to the store
• Acts as the cashier whenever the cashier is out
• Assists the cashier and designer in dealing with customers in periods of
high customer traffic
• Performs quality checks
• Updates finished jeans checklist on a daily basis
• Ensures that store personnel act according to Eala Inc. rules and
policies
• Generates monthly reports on store employees attendance
• Performs necessary sanctions for store employees’ offenses in
tardiness and absences by issuing memos or by oral reprimand

Designer
General Function: In-charge of conceptualizing designs for Pant Saloon
Duties and Responsibilities:
• Studies the latest trend in denim jeans
• Submits designs subject to the approval of the managers
• Handles pre-production procedures such as getting customers’
measurements and recommending fabric type and style of the jeans as
well as post-production procedures like checking the fit of the jeans to
the customers and deciding whether it needs alteration
 Cutter
General Function: In-charge of cutting the fabric for each denim jeans to be
sewed
Duties and Responsibilities:
• Cuts the fabric for each jeans after the customer’s vital statistics are
measured
• Assists the designer in getting customers’ measurements in case of
high customer traffic

Jeans Engineers
General Function: In-charge of sewing denim jeans
Duties and Responsibilities:
• Sew denim jeans
• Assist the designer in getting customer measurements
• Alter denim jeans whenever applicable

Marketing Manager
General Function: In-charge of marketing activities for Pantsaloon
Duties and Responsibilities:
• Formulates marketing strategies such as product, pricing, place and
promotional strategies for Pantsaloon to gain a favorable share of the
market
• Evaluates Pantsaloon products’ market performance
• Studies Pantsaloon’s competitors
• Analyzes marketing opportunities for Pantsaloon
• Determines the type/s of promotional activities
• Determines the most appropriate marketing communication medium in
order to increase market awareness and market performance
• Identifies the cost of advertising and promotional activities
• Estimates the growth in sales after executing promotional program
 • Performs cost-benefit analysis on promotional expenditures and
increased sales expected as a result of such
• Compares target and actual sales
• Monitors sales and expenses

Market Researcher / Purchaser

General Function: In-charge of doing marketing research for Pantsaloon and
purchasing supplies needed for the production of denim jeans
Duties and Responsibilities:
• Assists and coordinates with the marketing manager in studying and
investigating Pantsaloon’s closest competitors
• Forecasts appropriate pricing scheme
• Assesses demand and supply forecast
• Handles purchasing of raw materials
• Ensures the replenishment of production supplies

2. Qualifications
Since the business is just starting, the qualifications of the officers would be
simple enough for them to do their functions in the organization.

Chief Executive Officer

• Male/female
• Must be a graduate of any business course
• Should be knowledgeable in the apparel industry
• Work experience is an advantage
• Must possess excellent communication skills in English and
Filipino
• Must have strong leadership and decision-making skills

Finance Manager
• Male/female
 • Must be a graduate of any business course, preferably major in
Finance
• Must be familiar with investment management and analysis
• Must be familiar with financing, loan and credit management

Accountant
• Male/female
• Must be a Certified Public Accountant
• Must be hardworking and willing to work long hours if necessary

Cashier
• Male/female
• Must have attained at least 2 years of any college or vocational
course
• Must possess good communication skills in English and Filipino
• Must be customer-oriented and with pleasing personality
• Must be trustworthy in handling daily sales

Human Resources Manager

• Male/female
• Must be a graduate of Psychology, Behavioral Science or any
business course
• Must be knowledgeable in employee relations, in making
compensation packages, and in other HR functions
• Must have strong leadership qualities

Operations Manager
• Male/female
• Must be graduate of any undergraduate degree, preferably any
business course
• Must possess excellent communication skills in English and
Filipino
 • Must have strong leadership skills to manage subordinates
• Must be customer-oriented
• Preferably has knowledge and experience in apparel business
• Must be willing to work long hours if deemed necessary

Designer
• Male/female
• Must be graduate of Clothing Technology or any related course
• Must be creative and full of innovative ideas
• Must be customer-oriented
• Work experience is an advantage

Cutter
• Male/female
• Highly-skilled in cutting fabrics for denim jeans

Jeans Engineers
• Male/female
• Highly-skilled in denim jeans production
• Work experience as a tailor is an advantage
• Must be able to meet deadlines

Marketing Manager
• Male/female
• Must be graduate of any business course, preferably major in
Marketing
• Must be familiar with the apparel industry
• Knowledgeable in advertising and marketing communications
strategies, consumer behavior, product and brand management,
distribution management, and other marketing principles
• Must be updated with the latest fashion in denim jeans
 • Must possess excellent communication skills in English and
Filipino

Market Researcher / Purchaser

• Male/female
• Must be graduate of any business course, preferably major in
Marketing and/or Operations
• Knowledgeable in market research methods and consumer
research studies
• Knowledgeable in purchase and supplies management

3. Recruitment and Training

Eala Inc. assumes that the incorporators themselves will occupy all top
positions, and all other unoccupied positions will be filled in by hiring people.

Interested applicants must first submit a copy of their updated resume, which
the HR manager will go through to select potential hires. Chosen applicants
will then be asked to appear for an initial interview. Short-listed interviewees
will undergo one-week training to further hone their skill, as well as to be
briefed with the company’s mission, vision policies and guidelines. Those
applicants whose workmanship and work ethics are at par with Pantsaloon’s
standards shall be hired.

All newly hired applicants will be asked to submit an NBI, police, and
Barangay Clearance. They must also have their SSS numbers and must
submit a medical certificate stating that they are fit to work.

4. Compensation and Benefits

The company shall follow the compensation package outlined below:

POSITION MONTHLY COMPENSATION

CEO PHP 35,000 plus shares in the
company
 Operations Manager PHP 25,000
Finance Manager PHP 22,000
Human Resource Manager PHP 22,000
Marketing Manager PHP 22,000
Accountant PHP 18,000
Cashier PHP 12,000
Market Researcher PHP 18,000
Jeans Engineers PHP 12,000
Master Cutter PHP 12,000
Designer PHP 20,000

Salaries will be paid every 15th and 30th of every month. Salary increases will
be dependent on the current year’s performance.

As mandated by the Philippine government, all employees are entitled to

SSS, PhilHealth, Pag-ibig Fund and ECOLA. Other compensation benefits such
as holiday pay and service incentive leaves will be applied based on the rules
and regulations stipulated on the Labor Code of the Philippines.

Jeans engineers or tailors are entitled to two days off from work. The
schedule shown below was designed to ensure that there are at least two
tailors present in the store every working day.

On the other hand, the operations manager, cashier, designer and master
cutter are required to report to seven days a week. All employees are entitled
to a sick leave of seven working days.

B. Daily Operations
To give time for store preparation and store clean up, the call time for all employees
is 30 minutes before the opening time.

During weekdays, the store opens at 11:00am, while store hours begin at 10:00am
on weekends. At these hours, the Operations Manager, cashier and designer are
expected to be at the reception area, attending to customers. In the meantime, the
cutter and two jeans engineers are expected to be found at the workroom behind
the store, making the jeans.

The Operations Manager, Designer and Cashier also double as receptionists as they
are expected to cheerfully greet all customers who enter the store. They are all
obliged to ensure the comfort of the customers by assisting them in whatever way
possible.

The store’s policy will be on a first come first served basis. This means that the
customer who arrives first shall be first in line with the designer’s or cashier’s
services, whichever he or she needs.

Once a customer gets his consultation turn with the designer, the first matter of
consideration will be the cut and style, followed by selection of fabric. The fabric is
selected from a fabric catalogue so that the customer is able to get the feel of the
fabric. He or she will also be advised as to what fabric will work best for the selected
cut and design. After the fabric has been selected, any additional designs shall be
selected.

The designer shall then take the measurements of the customer, and encode the
design, fabric and cut to the special software program that simulates the over-all
look of the jeans. Tailors/ jeans engineers can also take the measurements of the
customer when store traffic is high. The design undergoes necessary adjustments
before finalized and submitted to the master cutter.

Only after performing all these services, shall the designer move on to the customer
next in line.

The cashier situated at the cashier’s counter is first expected to show the voucher
to the customer and confirm items listed in the receipt. Once the customer agrees,
the cashier tallies the amount and announces the total payment required. As soon
as the customer hands the payment to the cashier, the cashier should read out to
the customer the amount of the transaction and the payment received. The cashier
should count the change out loud to the customer. The copy of the voucher is kept
for recording of daily sales. After payment, the items will be placed inside a paper
bag and the cashier should thank the customer. This way the buyer will recognize
Pantsaloon to be a boutique that has warm and courteous employees.

During lunchtime, the employees will take turns at having lunch. If there is no
customer to assist, all employees in the store are expected to keep the place neat,
clean and orderly. The store closes at 8:00pm on weekdays and 8:30 pm on
weekends. Before leaving, the store must be cleaned and the cash must be
balanced by the cashier. The cash for the day will be handed to the store manager
who will, in turn, deposit it in the bank. If, for any reason, the cash is not balanced
then it should immediately be reported to the manager.

1. Scheduling
Scheduling is one of the most important tasks of store management, yet it is
often one of the most neglected. Many Operations Managers simply repeat
the same schedule each week, neglecting to analyze changes in store traffic

For Pantsaloon, all store employees are required to report thirty minutes
before the scheduled opening time. This is to provide ample time for
cleaning, stock replenishment and cash wrap counter preparation.
Furthermore, breaktime during lunch to ensure that there are employees
during the lunch hours

Sample Weekly Schedule for Pantsaloon

Mon Tue Wed Thu Fri Sat Sun
Operations
OC OC OC OC OC OC OC
Manager
Cashier OC OC OC OC OC OC DO
Designer OC OC OC OC OC OC OC
Cutter OC OC OC OC OC OC OC
Jeans Engineer 1 OC OC DO OC OC DO OC
Jeans Engineer 2 OC OC OC DO OC OC DO
Jeans Engineer 3 OC DO OC OC DO OC OC
 Time
Time In Lunch
Out
11:00-12:00 /
Weekdays 11:00 am 8:00 pm
12:00-1:00
11:00-12:00 /
Weekends 10:00 8:30 pm
12:00-1:00

Sample schedule for lunch breaks

11:00-
12:00-1:00
12:00
Operations Manager X
Cashier X
Designer X
Cutter X
Jeans Engineer 1 X
Jeans Engineer 2 X
Jeans Engineer 3 X

2. Policies on Tardiness and Absences

All employees will be required to be at the store at 10:30 am during
weekdays and 9:30 am during weekends. They would be considered late if
they come 15 minutes after the call time. Any fraction after that, they will be
considered under time and there would be a corresponding deduction from
their pay. An overtime cannot offset an under time. An employee will only be
allowed to be late for a maximum of three times per month. Should they
exceed, a memo will be issued to call their attention.

In the event that they would absent themselves from work, they must call
one hour before the call time to inform the operations manager of their
absence. All store employees will only be allowed a maximum of one absence
every month. Should the maximum be reached, a memo will be issued to call
their attention. An absence without leave will be considered a serious
offense. A memo will be issued upon returning to work.

3. Uniform and Dress Code

The store managers and all store staff will be provided with official uniforms.
Uniforms will vary and will depend on the season and budget. These
employees are expected to wear their uniforms at all times. The store staff
will enjoy free uniform privileges. The prescribed color and style of shoes will
be provided by the employee themselves. Stockings shall be worn when the
uniform consists of skirt. Female staff should maintain their hairstyles neatly
combed and make-ups should be appropriate for daywear and theme of the
season. Accessories should be minimized. Body marks, including tattoos,
body paints or stickers are not allowed.

4. Inventory Management
Since all of Pantsaloon’s products are custom-made, fabrics will be the only
items in the business’ inventory. Even then, the fabrics that the store shall
keep in its inventory will only be for purposes of keeping safety stocks. When
the store runs out of a certain kind of fabric, the purchaser is in charge of
replenishing this stock. The average rate of replenishment is once a month,
because the amount of fabric kept in storage is a close approximation of
monthly demand.

Finished goods shall be kept in the finished good inventory for an average of
one day, as the jeans are expected to be finished a day before the customers
are expected to claim them. These finished jeans are labeled by customer’s
name, and are neatly arranged in storage cabinets supervised by the
operations manager until such time that they are claimed. The storage area
shall also house the supplies and utility equipment of the store.

A checklist of finished items shall be kept on hand, and updated at the end of
the day to keep track of the jeans that have already been claimed. This way,
it would be easier for the boutique to keep track of its inventory.
 5. Cash Management
For the first few years of operations, Pantsaloon shall make use of vouchers/
sales invoices as proofs of payment. Payments will be in cash, and kept at a
safety deposit box placed under the careful supervision of the cashier.

The store will have an opening fund in the safe of P2,000 in different
denominations:

P 1.00 P100
P 5.00 P50
P 10.00 P50
P 20.00 P300
P 50.00 P500
P 100.00 P500
P 500.00 P500

This opening fund, counted and managed by the Operations Manager, will be
used in the daily operations of Pantsaloon. In the meantime, the cashier will
record the cash at the end of each operating day. The same thing will apply to
daily sales receipts.

Substantial amounts of cash would not be allowed to accumulate, so the

Store Manager shall be responsible for depositing the cash in the bank under
the store’s bank account. This account will serve as the depository of all
sales.

6. Sales Management
A daily sales report is made to keep track of merchandise and account for
every peso received. This report would aid the Store Manager in monitoring
what items are in demand and what are slow moving. Orders for stocks and
sales trends can be easily determined because of this. The boutique will be
able to order those materials that are fast-moving and will not have the error
on ordering those that are hardly saleable.

7. Store Expenses
Rental. Monthly rental statements will be issued by the building operator to
the operations manager, who in turn is responsible for checking the accuracy
of all the information and figures written on the statement. Affixing his
signature on the bottom portion of the statement signifies that the statement
has been screened and reviewed. The rental statement is finally faxed to the
Accounting Department for payment processing.

Electricity and Water. The electricity and water charges will be

incorporated in the rental statement. The operations manager ensures that
the consumption readings of each are reviewed and tallied against the
previous month’s reading.

Petty Cash. A petty cash fund of P500 shall be allocated for the business.
They are not required to finish up the entire funds, and are even encouraged
to minimize spending, without sacrificing operational efficiency.

Replenishment of Store Supplies. The quantity ordered to replenish

supplies must be enough for a month’ supply. Hence, the average monthly
consumption for each supply will be monitored in order to peg a safe reorder
point.
 Table 6| Monthly General and
Administrative Expenses
Office Supplies
petty cash 500
others 500 1000
Salaries
CEO 35000
operations 25000
finance 22000
marketing 22000
hr 22000
accountant 18000
market researcher 18000 162000
Insurance 1875
Communications 1500
Utilities
Electricity (Office) 1500
Water 500
Total Administrative
Costs 168375
Table 7| Operating Costs
Production
Variable 51885
96006.6
Fixed 7
147891.
Total 7
Administrative 168375
TOTAL MONTHLY OPERATING 316266.
COSTS 7

VI: STRUCTURAL REQUIREMENTS

A: The Pantsaloon Boutique Layout

Design Concept: Adding interest to basics
The interior of the store will be ultra modern and dominantly white, to make the
place look more expansive. However, to break the monotony and add accent and
interest to the space, splashes of bright and cheery colors such as orange and neon
green shall be added, via the store accessories and furniture.
White also projects an image of easy sophistication, and cleanliness. Being a neutral
color, it can be easily made attractive by adding points of interest. The same applies
to Pantsaloon’s jeans – a splash of color is all you need to make something basic
stylish, individualistic and interesting.

Rationale: Utmost comfort and sophistication for the valued customer

Since the target market of Pantsaloon is the higher end market, Eala aims to imbibe
a sense of modern luxury into its interiors. Eala wants to achieve a clean and
organized look for Pantsaloon by adopting a minimalist attitude in its choice of
interiors. To add interest and comfort however, unique pieces that are still
comfortable have been selected. More importantly, Eala wants a space that would
allow them to serve their customers in the best way possible.

Design Style: Modern Industrial Style

Simple lines, neutral colors and geometric figures have been selected to achieve
the clean and organized look. Silver metal shall accompany the white walls and
furniture, while bright orange and green items shall accent the white scheme. The
flooring caps off this theme by applying acrylic emulsion to the floor finish.

Design Objectives:
• To be able to meet all the client’s necessities and wishes

• To be able to come about with a design that would attract customers in and
keep them coming back
• To be able to translate the concept of the clothing line to the boutique’s
interior
• To be able to design a space that would make for comfortable fitting of jeans

• To be able to make a design that would cater to the comfort of both clients
and employees
• To be able to create a vibe conducive for generating creative ideas for jeans
1. Initial Location
Pantsaloon shall be located at the second level of J& R Commercial Center in
Katipunan, Quezon City. The proposed space, 25 meters big, is currently
unoccupied and is available for leasing anytime.
Picture 1| Front View of J& R Commercial Center

Picture 2| Shots of the Proposed Location

Figure 4| 2nd Floor of J&R Commercial Center

2. Proposed Layout
The proposed layout of Pantsaloon is designed to maximize the ease of movement
within the store. To maximize the limited floor area, the furniture shall be pushed
away to the sides t make room for movement across the store. Also, furniture will
be kept at a minimum, extending only to the receiving/waiting area sofas and table.

Lighting. The lights that will be installed inside the store are bright white
lights that further accent the whiteness of the scheme. They will also help in
getting an accurate view of the jeans, and provide further contrast to the
colored pieces of furniture within the store. Moreover, a square glass floor
lamp shall be situated at one corner of the sitting area to serve as additional
lighting, accent piece and decoration. All the lights will be strategically
positioned to highlight the different portions of the store.

Display Area. Panstaloon shall utilize its suspended cabinets, industrial rack
and center table for displays. The suspended cabinets shall showcase folded
fabrics, while the display racks underneath it will contain finished jeans that
the customers can actually emulate. The center table at the sitting area shall
hold the swatches of fabric, catalogued in a unique and creative manner to
also serve as decorative pieces.

Fitting Rooms. The fitting area is situated at the leftmost corner of the store
covered by an attractive cloth. Inside the fitting room is a hanging full length
mirror so the customer can see the jeans in its totality. A floor-to-ceiling
mirror wall shall be situated at the opposite side of the fitting room so that
the customer may see the jeans from all angles at the same time, if he or she
wishes. Warm white lighting shall be utilized inside the fitting room to
accentuate the color of the skin, making the customer look better.

The fitting room should be comfortably big, so that customer will have room
to move around and turn without feeling cramped. The hooks by which they
would hang their clothes would likewise be big and ample, so that the
customer does not run out of space to hang their clothes.
Waiting Area. The store’s main attraction, facilities-wise, is its sitting area.
Composed of colorful sofas, stylish centertable and a floorlamp, the sitting
area will function as the designer’s consulting area, as well as a place where
other customers can comfortably wait for their turn. The sitting area will be
the store’s centerpiece, embodying the vibe and character that Pantsaloon
wants to suggest.

Cashier Counter. The cashier counter shall contain the logo of the store,
and be located at the right of the customer upon entering the store. The
counter is strategically positioned to observe all the activities happening
within the store. It will contain the cash safe, vouchers and the phone, for
entertaining store inquiries.

Work Area and Stockroom. The work area and stock room shall be located
at the back of the store concealed from the customer’s view by a curtain wall.
All the equipment for working and storage are pushed to the sides, thereby
facilitating free movement within the work area.

Added Features. Mannequin displays and hanging jeans shall be placed at

the display mirrors on the rightmost side of the entrance door, as these are
the only places where displays can be actually placed. The displays will
include uniquely designed jeans that are sure to attract the attention of
passersby, enticing them to come into the store and see what Pantsaloon has
to offer them.
Mirrored wall
 Figure 5| Proposed Floor Plan of the Pantsaloon

3. Construction of the Boutique

The construction of the boutique would take about 22 days to finish. Eala’s
contractor, JGC Trading and Construction, presented a schedule of
construction and itemized costing for the materials an labor to be used in
furnishing and refurbishing the store. Needless to say, the prepared schedule
took into consideration the rules of the building operators on construction,
which is contractors will only be allowed to work from 8pm to 12 mn, or four
hours every day. Lastly, the calculated costing for the construction would
reach P293, 629.

Table 8| Construction Costs

Materials
Cost Labor Cost
TOTAL
u
qty nit unit total unit total
A. General
Requirements:
Mobilization/
Demobilization 1 lot 5000
Power and water
consumption 1 lot 15000
Permit and Fees 1 lot 10500
Hauling and Lifting 1 lot 8900
Final cleaning/ clearing 1 lot 5000
44400
B. Demolition
Requirements
Concrete 1 m2 350 4,410 4,410
 2.6
1
Wood 6.8 m2 150 2,520 2,520
Hauling and Disposal of
Debris 1 lot 2,500 2,500
9,430
C. Carpentry
Requirements
18,50 18,50 7,40
Cashier counter 1 0 0 0 7,400 25,900
Floating shelves 6 1000 6000 833 5,000 11,000
1
Storage cabinets 2 2500 5000 350 2,700 7,700
2
worktables 1 1500 1500 000 2,000 3,500
48,100
D. Panting
requirements
1200
Ceiling - enamel 25 m2 480 0 240 6,000 18,000
2100 15,75
Walls - semi goss latex 175 m2 120 0 90 0 36,750
2
Cashier counter - duco 1 4500 4500 100 2,100 6,600
2
storage cabinets - duco 2 1500 3000 500 2,500 5,500
2
floating shelves - duco 6 500 3000 500 2,500 5,500
worktables - flat 1 120 120 90 90 210
72,560
E. Wall finishing
working area partition
(fabric) 1 lot 1480 1480 500 500 1,980
fitting room partition
(fabric) 1 lot 1000 1000 500 500 1,500
mirror on plywood 1045
backing 11 m2 950 0 380 4180 14,630
18,110
F. Floor finishing
cement laying 25 m2 150 3750 50 1250 5,000
acrylic emulsion 25 m3 200 5000 100 2500 7,500
carpet roll 6 m4 850 5312. 100 625 5,938
 .25 5
18,438
G. Ceiling works
Flat ceiling using 1/4 1200
plywood 25 m2 480 0 240 6000 18,000
18,000
H. Bathroom
Requirements
Tiling 200 pcs 12.5 2500 50 1000 3,500
Sink and Toilet 6
Installation 1 lot 4000 4000 000 6000 10,000
13,500
H. Electrical Works
12,33 12,33 9,85
Wiring and Conduit 1 Lot 0 0 0 9,850 22,180
2,15
Switches and Outlets 1 Lot 4,500 4,500 0 2,150 4,650
pc
Flourescent- Cove Light 5 s. 275 1,375 150 750 2,125
Panel Box and 4,50
Accessories 1 Lot 7,500 7,500 0 4,500 12,000
40,955
J. Other Finishes
Laminated Cashier 1 1,05
countertop .92 m2 3,500 6,720 0 2,016 8,736
Aircon provisions 1 lot 900 900 500 500 1,400
10,136
293,62
TOTAL 9

Table 9| Construction Schedule

Duration: 22 Days
1 1 1 1 1 1 1 1 1 1 2 2 2
1 2 3 4 5 6 7 8 9 0 1 2 3 4 5 6 7 8 9 0 1 2
Demolition Requirements
Concrete
Wood
Hauling and Disposal of
Debris
Carpentry Requirements
Cashier counter
Floating shelves
Storage cabinets
worktables
Ceiling works
Flat ceiling using 1/4
plywood
Electrical Works
Wiring and Conduit
Switches and Outlets
Flourescent- Cove Light
Panel Box and Accessories
Panting requirements
Ceiling - enamel
Walls - semi goss latex
Cashier counter - duco
floating shelves - duco
storage cabinets - duco
worktables - flat
Floor finishing
cement laying
acrylic emulsion
carpet roll
Wall finishing
working area partition
(fabric)
fitting room partition (fabric)
mirror on plywood backing
Bathroom Requirements
Sink and Toilet Installation
Tiling

B. Eala Office Layout

The office of Eala Inc shall be located at the 4th floor of 33 P.Burgos St. Co G. del
Pilar Street, West 10th Ave., Caloocan City. The building is conveniently located along
the boundaries of Quezon City, Malabon, Navotas and Manila. It is also 45 minutes
away from Katipunan, where the store will be located. The total space area available
for occupancy is 36.7 square meters.
 1, Proposed Layout
The office space is intended for conducting business transactions, generating
reports, receiving customers and job applicants, and providing storage for
documents essential to Pantsaloon. Because of this, the office space shall be
divided into 4 areas: conference, computer, receiving and storage.
The office unit is already furnished with wall paper, air conditioner, cabinets,
and tables.

Additional fixtures and furniture, office equipment included, shall be acquired

for usage in company transactions.

TP

Office
1234
Figure 6| Proposed Office Layout
Table 10| Costing of Office Investments
10
EXPECTE
OFFICE EQUIPMENT Qty. COST TOTAL D
LIFE
4 in 1 office machine
1 12,000.00 12,000.00 5 years
(printer, scanner, copier, fax)
Computer Set 2 30,000.00 60,000.00 5 years
P
TOTAL
72,000.00
 EXPECT
FURNITURES & FIXTURES Qty. COST TOTAL ED
LIFE
P
Filing cabinets 2 2,500.00 10 years
5,000.00
Conference chairs and tables
1 20,000.00 20,000.00 10 years
(set)
Sofa leather 1 4,000.00 4,000.00 10 years

Office tables 2 2,500.00 5,000.00 10 years

Office chairs 4 1,000.00 4,000.00 7 years

Fire extinguisher 1 1,700.00 1,700.00 10 years

P
TOTAL
39,700.00
Straight line method shall be used to depreciate the aforementioned items.
Except for the computer set and 4-in-1 office machine, all other items shall be
given an expected life of ten years. While the company believes that the
furniture and fixtures would be durable enough to last the for the specified
durations, the specified office equipment would only last half as long because of
the need to keep up with the fast-paced change in technology. The risk of
obsolescence therefore is also higher for equipment rather than for furniture and
fixtures.

VII: Business Requirements

The following permits have to be processed:
1. Barangay Clearance
2. Mayor’s Business Permit
3. DTI Certificate of Registration
4. DOLE Registration
 5. BIR Registration
6. BIR POS Permit
7. BIR Authority to Print

While the following permits have to be secured from the City / Municipality:
1. Building Permit
2. Electrical Permit
3. Wiring Permit The law requires the execution of the Articles of Incorporation so as to endow the
corporation the capacity to transact the business for which it was created.
4. Occupancy
Articles ofPermit Together with the Treasurer’s Affidavit and upon payment of filing and publication
Incorporation fees, the Securities and Exchange Commission shall then issue the Certificate of
5. Locational Clearance
Incorporation to the business entity.
6. Sanitary Permit
7. Certificate of Fire Safety Inspection
Barangay The business must then secure a certification from the barangay to where it will
8. Certificate
Clearanceof Electrical Inspection
operate. The Barangay Clearance shall include the name of the owner, the name,
nature, and address of the establishment, and the date when the form has been
Fee: P400.00 approved by the Barangay Chairman.

Coordinate with building operators for the following:

1. Final building inspection
The Community Tax Certificate can be obtained from the Bureau of Internal
Community Tax
2. Permit to Move-in Revenue after accomplishing the Application of Registration and payment of
Certificate Annual Registration Fee and Documentary Stamp requirements.
3. Overtime / Work Permit
4. Permit to Pull-out Garbage

The Community Tax Certificate can be obtained from the Bureau of Internal
Sanitary Permit Revenue after accomplishing the Application of Registration and payment of
Annual Registration Fee and Documentary Stamp requirements.

The establishment must then be registered to specific zoning areas as assigned

Locational by the Local Zoning Board in the Planning Department of the City/Municipality.
Clearance Upon application and approval, the business shall be classified as belonging to
the Residential, Commercial, or Institutional Zones, whichever it is deemed
Fee: P425.00
included.

As persuant with the fire safety and and protection requirements of the Fire Code
Fire Clearance of the Philippines (PD-1185), the business must obtain a Fire Safety Inspection
Certificate before it could operate. The building or occupancy must be inspected
Fee: P356.10 and should be subject to the recommendation and approval from the Chief
Inspector of the Municipal Fire Marshal.
1. Requirements for Business Application
To be accomplished at the Business Permit and License Office
Building The establishment must then request for a certification of tenancy from the
Administrator’s building or mall to where it shall locate its business at. The certificate should
include the name of the stall and the level where it is placed, the space code and
Certificate the its approximate floor area.

Upon completion of the necessary requirements presented above, the documents

shall then be presented to the Business Permit and License Office for further
Permit to Operate inspection and assessment. Required Taxes and Regulatory Charges must also
be accomplished before the the Municipal Administrator, through the authority of
the Mayor, could grant its approval in the issuance of the Permit to Operate.
Table 11| City/Municipal Taxes, Fees, and Charges
 Assessments Reference Amount Due
Sec. 15-19,37&44,
Local Taxes
RCMM
Local Business Sec. 34, RCMM
Tax on Delivery Vans/Trucks Sec. 19(25), RCMM
Tax on Signboards/ Bill Boards Sec. 40, RCMM
Regulatory Charges
Mayor’s Permit Fee Sec. 105, RCMM 450.00
Garbage Charges Sec. 63, RCMM 100.00
Delivery Vans/Trucks Permit Fee Sec. 105(b), RCMM
Business Registration Plate 180.00
Inspection Fees
Sanitary Inspection Fee Sec. 109, RCMM 36.00
Building Inspection Fee P.D. 1096
Electrical Inspection Fee P.D. 1096 175.00
Mechanical Inspection Fee P.D. 1096
Plumbing Inspection Fee P.D. 1096
Signboard/Billboard Inspection Sec. 105(b), 13,
50.00
Fee RCMM
Penalty (Surcharge & Interests)

** Mode of Payment: QUARTERLY

** To be paid for Current License Period

2. Leasing Requirements
a. Legal Requirements (Corporation)
1. Articles of Incorporation and By-Laws
2. Board Resolution authorizing the Contract of Lease and designating the
Authorized Signatory
3. Community Tax Certificate of the Corporation and the Authorized
Signatory
4. Registration of Business Name with DTI
5. Certificate of Registration with BIR
6. Business Permit

b. Technical Aspects
1. Floor Plan
2. Ceiling Plan
3. Front Elevation
4. Longitudinal Section
5. Cross-Section
6. Perspective
7. Signage
8. Electrical Load Schedule
8a. Electrical Layout
8b. Lighting Fixture
8c. Power
8d. Signage
9. Color Scheme
11. Scope of Work
Table 12| Initial Investment Costs
Registration Fees
SEC 3189
BIR 500
DTI 515
Business Permit 7472
Total Registration Fees 11676
Fixed Assets
Office
Equipment
4 in 1 machine 12,000
Computer Set 60000
Furniture and Fixtures
Cabinets 2500
chairs and table 29000
sofa 4000
fire extinguisher 1700
Leasehold Improvements 15000
Total Office Assets 124,200
Store
Equipment
sewing machine 30,000
edging machines 15000
buttonholers 5000
jeans software 20000
computer set 30000
chairs and worktables 5710
phone 2000
safety deposit box 1700
Furniture and Fixtures
display materials 15000
2-seater sofa 6000
chair 2000
centertable 4000
floorlamp 1500
lighting system 8000
fire extinguisher 1700
airconditioning unit 17000
Leasehold Improvements 293629
Vehicle 300000
Total Store Assets 758,239
Total Fixed Assets 882,439
Initial Advertising Costs
Print Materials 80,500
Ribbon Cutting 30000
Total Initial Advertising Costs 110,500
Initial Working Capital
Current Assets
Cash on Hand 500000
Supplies 53500
Materials 39885
Prepaid Rent 75000
Total Current Assets 668385
Production Costs
Variable
Indirect Labor (Washing: Outsource) 15000
Total Variable Costs 15000
Fixed
Direct Labor (wages) 48000
Indirect Labor (Designer) 20000
Rent Expense 12500
Utilities 9090
Transportation 3000
Repair and Mantenance 0
Total Fixed Costs 92590
Total Production Costs 107590
Administrative Costs
Office Supplies 1000
Salaries 162000
Insurance 1875
Communications 1500
Utilities 2000
Total Administrative Costs 168375
Total Initial Working Capital 944350
TOTAL INITIAL INVESTMENT COST 1,948,965