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University of San Carlos Technological Centre

Department of Industrial Engineering

In partial fulfillment of requirement for

IE TECH MAJOR 2 Product Life Cycle

Submitted by:

Princess Nina Arcales

Cherie Loriel Diaz

Kervin Capangpangan

Hazel Princess Mosot

Ama Dominique Sandoval

Submitted to:

Mr. Inciong II, Enrique B.

October 2, 2017
Table of Contents

I. Executive Summary
II. Product Description
a. Product Features
b. Product Description
c. Product Design/Illustration
III. Major/Minor Assumptions
IV. Target Market
V. Projected Demand
VI. Method of Projection
VII. Competitors Profile
a. Direct
b. Indirect
VIII. Projected Supply
IX. Method of Projection
X. Supply Demand
XI. Projected Market Share
XII. Survey Results
XIII. Analysis of Survey Results
XIV. Pricing Scheme
XV. Management Aspects
a. Mission and Vision
b. Company Logo
c. Organizational Structure
d. Projected Salaries and Wages
e. Employee Benefits
XVI. Description of Strategies and Activities for Life Cycle Stages
Per Life Cycle Stage
a. Introductory Stage
i. Price
ii. Product
iii. Promotion
iv. Place
b. Growth Stage
i. Price
ii. Product
iii. Promotion
iv. Place
c. Maturity Stage
i. Price
ii. Product
iii. Promotion
iv. Place
d. Decline Stage
i. Price
ii. Product
iii. Promotion
iv. Place
XVII. Technical Aspect
a. Selection of Plant/Facility Location
b. Plant/ Area Layout
c. Space Requirements
d. Process Flow Chart
e. Inventory Management
f. Maintenance Program
XVIII. Financial Aspect
a. Total Project Cost
b. Operational Expenses per Life Cycle Stage
i. Introduction
ii. Growth
iii. Maturity
iv. Decline
c. Salaries and Wages
i. Introduction
ii. Growth
iii. Maturity
iv. Decline
I. Executive Summary

As consumers incomes continue to improve, demand for fragrances progressed in the


following years. What pushed its rising demands is the growing interest of younger
consumers in fragrances across income groups.

Perfumity is a start-up perfume retail shop specialized for women that is located in
Country Mall, Banilad, Cebu City. It provides an innovative fragrance system that allows
consumers to customize everything, from the scent down to the packaging, in their own
liking. Due to the publics growing interest and also taking on the challenge of being the
next-big-thing, Perfumity plans to build a strong market position in town with the unique
product and services it has to offer.

It aims to establish and develop a meaningful and differentiated fragrance, crafting the
message our customers want to hear and one that we can deliver on.

II. Product Description

a. Product Features
Perfumity is both a product and a service that features a variety of perfumes for
women. It allows the customers to participate in crafting their own custom fragrance that
could complement their every mood, setting, or desire throughout the day. The customers
will be given the opportunity to choose at least three fragrance scents that is the most
appealing to them, among the given number of fragrance oils. They will also be able to
customize the label and color of their perfume.
The perfumes can either be oil-based or alcohol-based, depending on the customers
preference. Both has their own advantages that will suit the different liking of each customer.
Oil-based perfumes have long lasting scents. It has a clean, rich, true scent with a long shelf
life. It is also less likely to cause allergic reactions since its only made up of the most natural
ingredients. Alcohol-based perfumes are also long-lasting since a synthetic fixative is added
to assist with holding the scent onto the skin. It has an overbearing and overpowering scent
suited for those customers who prefer perfumes with strong scent.
The objective of Perfumity is to be able to deviate from the trend of brands, imagery
and beguiling advertisements of todays perfume industry with a single, simple message
the ultimate fragrance is that which is truly yours.
b. Product Description

Fabulous feminine scents for those who want to rediscover real haute couture
fragrance overflowing with natural ingredients!

Be both natural and elegant with a dash of rose, tuberose, and orange blossom. Or,
dare to be sexy with intense amber and woods.

c. Product Design/Illustration

III. Major/Minor Assumptions

Defining the possible geographic location of the market, possible customers, who and
where the competition is, the following assumptions are obtained:

A group of female students from University of San Carlos Talamban Campus and
University of Cebu Banilad Campus that belongs to the middle class
From the sample size below, given that 60% of the students from USC-TC are females;
and 55% of the students from UC-Banilad are females (approximate) :

Number of Students Number of Females

USC-TC 13000 7800

UC Banilad 6000 3300

Total Number of potential customers 11, 100

The projection of the established demands in the next five years

Estimated initial capital is P 1,500,000.00

IV. Target Market

A group of female students from University of San Carlos Talamban Campus and
University of Cebu Banilad Campus that belongs to the middle class.

V. Projected Demand

DEMAND ASSUMPTIONS

The actual demand of Perfumes is acquired through the survey results of those who are
willing to buy and the monthly basis of buying perfumes

The monthly demand is constant throughout the entire year

Lifespan forecasted demand: 5 years

Ratio 1:1 is used, which means one head buys only one perfume

Based on the results of the survey, 38% of the respondents are willing to spend P201
300 for a single unit of perfume. It will be assumed that each piece of Perfume has a
selling cost of P 300

Demand Components

There are several components that can affect the demand for the perfume. These include the
following:
Potential Demand

Number of Students Number of Females

USC-TC 9450 5670

UC Banilad 6000 3300

Total Number of potential customers 8970

It is approximated that the no. of females in USC-TC and UC Banilad are 5670and 3,300 are
female, respectively.

Out of the 8970 female students, 98% of them are interested of buying our perfume (based
on survey results)

Actual Demand

61.5% have a monthly allowance of P3,000 4,000

DATA COMPUTATION

Potential Demand for customized perfume

Let:
P = total monthly population
W = % of respondents that are interested to buy our product

P * W = Potential Monthly demand

8970 * 0.98 = 8790.6 8791 heads

8,791 * php 300 = php 2,637,300

Actual Demand for customize perfume


Let:
P = Total potential Monthly demand
W = interested and willing to buy our perfume product

P * W = Actual Monthly Demand

8791 * 0.65 = 5714 heads

5714 * php 300 = php 1,714,200

Projected Demand Forecast

=
1
Year Y a +
2017 2,637,300 0 0 0
2018 2,953,776 184,620 2, 637, 300 2,821,920
2019 3,308,229 184,620 2,821,920 3,006,540
2020 3,705,216 184,620 3,005,640 3,191,160
2021 4, 149, 841 184,620 3,191,160 3,375,780
2022 4,647,822 184,620 3,375,780 3,560,400

VI. Method of Projection

ARITHMETIC STRAIGHT LINE METHOD

Computing for the expected value:


= + 1 where = 1

= initial value (1st Year)

= final value (last year)

N = number of years

= value for the year past

,,,,
= 1
=
= 184, 620
VII. Competitors Profile

a. Direct
Chemworld Fragrance Factory is driven by its mission to assist potential
entrepreneurs realize their dream to be financially independent by providing high quality
training, complete and affordable supplies, and continuing guidance in perfumery
business. They are located in 2nd level, SM Cebu City, main mall (below Bowling Center).
They offer high quality training in perfume-making to budding entrepreneurs in the
Philippines. Perfumity considers them as our direct perfume since they also sell perfumes
which are to be customized according to their clients choices. As they were located inside
a mall, where a lot of people frequents, that have a large potential that they will be able to
achieve their optimum goal in no time. The exposure and accessibility of their location is
a big factor. Their target market is for all ages, as long they are interested in personalized
perfumes or are willing to learn about the different processes in perfume making. Also they
already have plenty of outlets nationwide so that make them more exposed to people all
over the Philippines.

b. Indirect
Perfumity identified two indirect competitors and these are Aficionado and Zen Zest.
They sell fragrances like colognes and body mists, which our company doesnt offer but
still they affect us since we have similar target market.
Aficionado recreates ones favorite scents at a fraction of the original cost. Aficionado
was created by Mr. Joel Cruz on September 5, 2000 with the vision of being the preferred
brand amongst Filipinos for high quality yet affordable fragrances. Aficionado can be found
in malls catering to the customers from different lifestyles. After 5 years in the business, Mr.
Joel Cruz decided to accept franchising which propelled Aficionado to new heights making
them one of the known fragrances for perfumes and fragrances.
Zen Zest, the pioneer brand to carry and offer a complete range of fragrances and
body care items in the Philippines, began retail operations in 2001 with eau de toilettes,
lotions and body scrubs. The company believes that buyers want high quality offerings
worth their money that will allow them to indulge their increasingly refined sense of style
while remaining attuned to the latest trends. Similar with Aficionado, they can also be found
in the malls as a kiosk, a wall shop and a cart.
VIII. Projected Supply

Supply Analysis

A. Supply Assumptions

1. The perfumity will be the first business to produce personalized perfume within the Gaisano
Country Mall (Talamban-Banilad) area of establishment.

2. The company will be operating from to Mondays to Sundays as it is the only store that sells
personalized pergume in Country Mall.

3. The proponents direct competitor is Chemworld Fragrance Factory (CFF).

4. The proponents indirect competitors are Aficionado and Zen Zest.

B. Supply Components

1. A direct competitor is identified in Chemworld Fragrance Facotry as they provide similar


products.

2. All perfume shops/stores in Gaisano Country Mall (Banilad-Talamban) area selling perfumes
will be considered as indirect competitors of Perfumity. The gathered data below is taken form
the direct competitors capacity to produce and sell perfumes.

Direct competitor Perfumes(45ml) Price Average Price

Chemworld Perfume 15% 250


Fragrance
Perfume 20% 320 340
Factory
Perfume 25% 450
(CFF)
Direct Competitors Average Price in Supply

Direct Price Weekly Weekly(in Monthly Monthly(in


Competitor (pcs) pesos) (pcs) pesos)
Chemworld
Fragrance
340 65 22,100 260 88,400
Factory
(CFF)

Direct Competitors Capacity in Supply


The direct competitors supply capacity in producing personalized perfume in a day is multiplied by 7
working days in a week just like the usual working days in malls since the Perfumity store is located
near Gaisano Country mall. In calculating the annual supply capacity, it is assumed that there are 365
working days in a year.

Indirect Perfume(45ml) Price Average


Aficionado
competitor Eau de toilette 260 Price
Body and Bath 150
205
Zen Zest Sprays
Eau de toilete 230
Love
SeriesSeries 120
175

Indirect Competitors Average Price on Perfumes

Indirect Price Weekl Weekly Monthly Monthly


Competitor
Aficionado 205 y (pcs) (php)
17,425 (pcs)
340 (php)
69,700
Zen Zest 175 90
85 15,750 360 63,000
Indirect Competitors Capacity in Supplying Perfumes

The indirect competitors supply capacity in selling perfumes in Gaisano Country Mall is
multiplied by 7 working days a week. In calculating the annual supply capacity, it is assumed
that there are 365 working days in a year.
Projected Supply for Five Years

Year Competitor Price Total Supply in Php Yearly Supply in PhP


Supply
20 CFF 340 3120 1,060,800
Aficionado 205 4080 836,400 2,653,200
Ye
18 Competitor
ar Zen Zest 175 4320 756,000

20 CFF 340 3120 1,060,800


Aficionado 205 4080 836,400 2,653,200
19
Zen Zest 175 4320 756,000

20 CFF 340 3120 1,060,800


Aficionado 205 4080 836,400 2,653,200
20
Zen Zest 175 4320 756,000

20 CFF 340 3120 1,060,800


Aficionado 245 4080 836,400 2,653,200
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Zen Zest 175 4320 756,000

20 CFF 340 3120 1,060,800


Aficionado 205 4080 836,400 2,653,200
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Zen Zest 175 4320 756,000

IX. Method of Projection

The computed total supply of the direct competitor is assumed constant. This value was
added to the capacity of the indirect competitors to supply. With this, the value is obtained through:

New total Capacity to supply in php = supply of the direct competitors in php + supply of the
indirect competitors in php

88,400 + (69,700 + 63,000) = php 221,100 monthly capacity in terms of Php

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X. Supply DemandGap Analysis

Demand and Supply Gap Analysis

Year Total Demand (PhP) Total Supply (PhP) Demand-Supply Gap


2018 2,821,920 2,653,200 168,720
2019 3,006,540 2,653,200 353,340
2020 3,191,160 2,653,200 537,960
2021 3,375,780 2,653,200 722,580
2018 3,560,400 2,653,200 907,200

The table shows the projected demand, supply and the demand-supply gap. This shows the gap
between the demand for Perfumity and the volume of supply.

XI. Projected Market Share

Project Market Share

Year Demand-Supply Planned Production (in percentages)


Gap
2018 168,720 50000 29.6%

2019 353,340 100000 28.3%

2020 537,960 1500000 27.9%

2021 722,580 200000 27.7%

2018 907,200 300000 33.1%

Computation for the projected shares:

Share of the project = Planned Production

Total Market Gap

Note: Assumed planned production of the company

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XII. Survey Results

The researchers surveyed a total of 50 respondents that are female, college students.
The respondents were randomly selected and were asked to complete a survey
questionnaire prepared and provided by the proponents. The figures below show the
summary of the results acquired in the survey questionnaire.

31 or 62% of the respondents wear perfume everyday while 11 or 22% and 8 or 16%
responded that they uses perfume on special occassions and seldom, respectively.

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Majority of the total respondents chose the scent/fragrance, long lasting scent and price
as the top 3 things to consider in choosing perfumes

Majority of the respondents 18 or 36% have pick Fresh scent as the type of scent they
look for in a perfume
30 or 60% of the respodents have said that the shape or look a bottle sometimes
help in deciding whether to buy the perfume or not.

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Top 3 notable brands of perfumes are as of the following. 26% chose Bench, 18% have
chosen Aficionado and 16% chose Penshoppe

Most of the respondents purchase perfume/s twice in a quarter year 46% or 23


respondents. 32% or 16 repondents purhase perfume once. 12% and 10% for thrice and
four times. This indicates a buying power that is sufficient to support the ability to purchase
desserts at least twice a week.

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38% or 19 respondents spend P 100 200 in buying a perfume. Followed by P 201
300 with 32% or 16 respondents and 30% or 15 or 30% have spent P above 300.

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Most respondents chose price as a reason that frustrates in buying perfume.

This figure states that a lot or many respondents are open to the idea of personalizing your
own perfumes.

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Almost all, 49/50 respondents are open of the idea of trying udea products.

P200 -300 is the price range ideal for respondents, based on the result above.

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XIII. Analysis of Survey Results

Perfumes have transformed into a feel decent factor, which complements the consumers
need for expressing individuality, and personal style. The wide range of themes and choices
enables consumers to choose fragrances that complement respective personal and
characteristics traits. A total of 50 respondents took part on every survey conducted by the
proponents. In line with the conducted survey, 62 % of female population wears perfume everyday
while some often wear only on special occasions. With regards to their monthly income, most of
the respondents belong to the income/allowance bracket of P3, 000-4,000. This also indicates
that most of them are students who comprise about 61.5% of the sample size. Most of the female
population, garnering 94% of the votes, considers scent/ fragrance in choosing a perfume. On the
other hand, 80% voted for the long lasting scent, 60% for the price. The researchers have come
to apprehend that 98% of the female population are interested in buying customized perfumes.
Thus, the survey results only shows that most of the population agrees on the idea of having
personalized perfumes and that theyre much willing to spend 200-300php and above just to have
one.

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XIV. Pricing Scheme

PRICING SCHEME

DIRECT MATERIALS
FRAGRANCE OIL P 49.14
FIXATIVE 3.19
DPG 3.49
ETHANOL 7.25
DISTILLED WATER 2.50
BOTTLE 10.00 P 75.57

DIRECT LABOR 48.50

OVERHEAD
ELECTRICITY 13.80
MAINTENANCE 17.08
FACTORY RENT 28.7
FACTORY SUPPLIES 14.81
FACTORY EQUIPMENT 17.18
INDIRECT LABOR 46.93 138.50
TOTAL MANUFACTURING COST 262.57

Profit margin (%) 12%


Expected Profit/ Unit P 31.52

UNIT SELLING PRICE P 294.09

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XV. Management Aspects

a. Vision

Perfumity aims to be one of the leading manufacturers and distributors in fine perfumery, always
anticipating and meeting the tastes and preferences of our valued customers and bringing them
serenity through the medium of fragrance.We assure the best quality of this product so its scale
could contribute to the reputation of our company.

b. Mission:

To provide quality perfume products locally at a right cost and a right time

To provide the best personalized fragrances as recommended by our experts.

To provide our employees with humane working conditions and security for their
personal and professional growth.

To ensure sustained value creation by allowing our employees and shareholders to


share our Companys success.

c. Company Logo

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d. Organizational Structure

The above diagram shows the management or organizational structure of the company
beginning with the chief executive officer as the highest governing body of the organization
linked with the three main departments: marketing services department, product services
department, and management services department.

1. Chief Executive Officer highest ranking officer in the company. The CEO is responsible
for the overall management of the companys daily affairs, management of the three
main departments.
2. Marketing Services Department Manager responsible for the management and
planning of sales of the companys product, the presentation, promotion, and advertising
of the product to make it desirable for consumers.
3. Advertising and Promotions Officer works hand in hand with the marketing services
department manager. Operates on the methods and ways designed by the marketing
manager to improve sales of the companys product.
4. Product Services Department Manager responsible for the management of
manufacturing of the companys products, the production of variations of the products,
and the design of new and innovative products.
5. Research and Development Team composed of product specialists (chemists) that
develop newer innovative products to launch for production.

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6. Production and Manufacturing Workers responsible on the mass production of the
companys products.
7. Management Services Department Manager responsible for the management of
accounting, purchasing, and human resource offices. Submits reports to the chief
executive officer.
8. Accounting and Budget Management Officer responsible for the monetary or financial
components of the company.
9. Purchasing Management Officer responsible for the management of the companys
purchases.
10. Human Resource Management Officer responsible for the management of the
companys human resource (employees).

e. Projected Salaries and Wages

i. Market Department
A Marketing Administrator earns an average salary of PHP 150,000-180
per year. The skills that increase pay for this job the most are Powerpoint,
Strategic Marketing, Market Research, and Microsoft Office. Experience
strongly influences income for this job. Most people move on to other jobs
if they have more than 10years' experience in this career.
ii. Product Developmet Department

The average salary for a Product Development Administrator is PHP


200,000-250,000 per year. A skill in Product Development is associated
with high pay for this job. Most people with this job move on to other
positions after 20 years in this field.

iii. Other Related Department


A Sales Supervisor HR Managers earns an average salary of PHP 292,875 per
year. People in this job generally don't have more than 10 years' experience.

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f. Employee Benefits

g. Salaries and Wage-Related Benefits


At least the minimum wage per region and/or sector
Holiday wage and overtime pay for work during holidays or rest days
Parental leaves (Maternity, Paternity and Solo parent leaves)
13th month

1. MINIMUM WAGE
The Wage Rationalization Act, Republic Act No. 6727, sets the minimum wage rates applicable
per region, province and industry sector. The industry sectors are: non-agricultural, agriculture
(plantation and non-plantation), cottage and handicraft, retail and service sectors. Minimum
wage may vary depending on the number of employees and gross-sales of an enterprise and its
industry sector.

As of April 2015 the minimum wage of non-agricultural workers in Metro Manila is PHP 481 and
PHP 444 for agricultural workers. Outside of Metro Manila, the minimum daily wage varies from
PHP 279 to PHP 337 for non-agricultural workers, depending on the region.

3. PREMIUM PAY
Premium pay is given on non-working days (rest days/special holidays)

There are 3 special holidays:

Ninoy Aquino Day


All Saints Day
Last Day of the Year

4. HOLIDAY PAY
The Labor Code requires the payment of an employees daily basic wage for all non-working
regular holidays.

There are 12 regular and 3 special non-working holidays (see above) in the Philippines.

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12 regular holidays are (Republic Act No. 9849):

New Years day


Maundy Thursday
Good Friday
Araw ng Kagitingan
Labour Day
Independence Day
National Heroes Day
Eidl Fitr
Eidl Adha
Bonifacio Day
Christmas Day
Rizal Day

8. PARENTAL LEAVES
The Labor Code of the Philippines covers three different types of parental leaves: maternity
leave, paternity leave and solo-parent leave.
10. 13th MONTH PAY
Each year, a 13th month pay is given to all rank-and-file employees. By law, this benefit must be
paid before December 24th and is mandatory. Employees who have resigned or have been
severed from the company before the payment of the 13th month pay are still entitled to it in
proportion to the length of time they worked for during that year.
The 13th month pay must be at least 1/12th of the total basic salary of each employee earned
during that calendar year.

11. SEPARATION PAY


Following the labor code of the Philippines, articles 283 and 284 state that an employee can
claim separation pay if his contract is ended under authorized causes. According to article 282
an employee terminated for just cause (neglect of duties, fraud, crime) is generally not entitled
to separation pay.
A separation pay of month pay for every year of service can be claimed under the following
authorized causes:
Retrenchment of person for loss prevention.

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Cessation of operation of a branch not due to serious losses or financial difficulties.
If the employee has contracted a disease not curable within 6 months and that his presence at
work can be harmful to himself or his co-workers.
A separation pay of 1 month pay for every year of service can be claimed under the following
authorized causes:
Labor-saving devices installed by the employer.
Redundancy of the employees services for the company.
Impossibility to reinstate the employee to his former position or to an equivalent position, for
reasons outside of the employers power.
The employer has the right to terminate the contract of an employee following any of the
above authorized causes through a written notice to both the employee and the
Department of Labor and Employment of the Philippines at least one month before the
contract cessation date.

XVI. Description of Strategies and Activities Per Life Cycle Stage


a) Introduction Stage
I. Price
Low-pricing will be used in order to penetrate and gain high market share. An
interest of 12% will be added that will give us a profit value of Php 31.30, as stated
in the pricing scheme above.
II. Product
The company offers perfumes which can either be oil-based or alcohol-based with
its respective benefits suited for the different taste of the customers. They can also
craft their own preferred perfume scents. These factors will make our perfumes
give off a good first impression to the customers.
III. Promotion
Fliers and brochures are given outside the nearby schools and other public
establishments such as malls, in order to build product awareness and attract
possible customers.
IV. Place
The company has only one branch which is located in Camp Lapu-lapu Road,
Apas Cebu City near Gaisano Country Mall, beside Gaisano Bowlingplex. We only
offer direct selling in the company.

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b) Growth Stage
I. Price
The pricing of our products will be increased as the demand increases as well.
II. Product
While still maintaining the existing quality of our products, the company will add
new features and more choices for the customers to choose froma variety of
perfume types, based on the percentage of its fragrance concentration namely (1)
Parfum; (2) Eau de Parfum; (3) Eau de Toilette; (4) Eau de Cologne.
III. Promotion
Our company will holds out sales and discounts on selected items, especially on
holidays and other gift-giving seasons. We will also boost our advertisements in
our social media pages in order to launch our new offers and attract more
customers. And then we will slowly shift the main goal of advertising from giving
product awareness to proving to the consumers the great quality our products
possess.
IV. Place
The distribution of products will become more important with the increase of
demand and the customers acceptability of the products. The company will have
to decideto add more channels to meet the increasing demand.

c) Maturity Stage
I. Price
Due to the intense competition in the market, our company will reduce the pricing
of the perfumes in order to attract the customers who are very price-conscious,
and to retain the existing customers.
II. Product
Our company will introduce a new product linecustomized perfumes for men,
while maintaining the existing perfumes for women. This will be done in order to
increase consumption and to attract new users. The company will also modify the
product features, design and style based on the gender of the customer.
III. Promotion

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Our company will have to launch better advertisement campaigns like posting of
signboards that states the available products and services. We will also grant
discount cards to the most frequent customers. This will create a product
differentiation and gains loyalty from the customers.
IV. Place
Our company will expand our horizons and add more channels by doing online
selling through Facebook and Instagram. The customers will be able to order their
perfume online. They will just have to fill up a form, which can be found in our
Facebook and Instagram pages. We will ship nationwide and the shipping fee will
be incorporated with the price of the perfume, since it will be shouldered by the
buyer.
d) Decline Stage
I. Price
During this stage, the sales will start declining. The best solution of our company
is to reduce the costs of items.
II. Product
Our company will have to identify the weak items, or those items with low sales.
And then we will decide whether to phase it out or sell it to much lower price.
III. Promotion
Our company will heavily implement the promotion of our new product lines in
every way, may it be in our social media pages, sign boards, word-of-mouth, and
giving out of fliers and brochures in public places like malls and schools.
IV. Place
Perfumity will look into a more strategic location where it can be easily accessed
by more interested customers.

XVII. Technical Aspects

A. SELECTION OF PLANT/ FACILITY LOCATION

The company is situated in Camp LapuLapu Road, Apas Cebu City near Gaisano
Country Mall, beside GaisanoBowlingplex. The vicinity is within Barangay Apa. The
location is good for marketing since the plant is near a mall where people come and
go.

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The red polygon shape figure signifies the location of the plant area. The location is
near a mall which is a good place for marketing the products. Road is concrete, with less
shrubbery (no trees), big parking space.

B. PLANT/AREA LAYOUT

14 m

9.2 m 9.2 m

14 m

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Unit of measurement is in meters. Plant area situated in the Barangay of Apas,
City of Cebu, Province of Cebu, Island of Cebu,containing an area of 128.8sq.m.

C. SPACE REQUIREMENT

The overall plant area of 128.8 sq.m is divided into spaces for each plant entities
namely the Warehouse, Department Office Space (Marketing Services Department,
Product Services Department, Management Services Department), CEO Office
Space, Machine Area and Working Area, and the Display Area.

Description of each area spaces are as follows :

1. Warehouse : The warehouse holds an area of 14.4 sqm. It serves as the main
storage site of both raw materials and stocked finished goods.
2. Department Office Space : The space for each department is not specified since
these offices share the same space but with different working tables.
3. CEO Office : The CEO office is located below the Department Office Space. It
holds an area of 9.5 sq.m. It is where the Chief Executive Officer resides. The CEO
office space is placed near the Department office space to have easy access of the
reports submitted by each department.

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4. Machine and Working Area : This area is where the manufacturing of product is
initiated and where all the processes of making the product is found.
5. Display Area : This area is where the products are held for display for people to
view the products.
DEPARTMENT OFFICE SPACE

The Department Office Space consists of three department manager desks


(all equipped with desktop computers and telephone, with the rolling chairs). The
Marketing Department managers desk is located on the far right corner has a simple
rectangular desk with one rolling chair, this is for the Advertising and Promotions
officer. Behind the Advertising and Promotions officer desk is a printing and copying
machine. The Management Department Managers desk is located in the middle and
has a long rectangular desk equipped with three desktop computers and three rolling
chairs. This is for the Accounting and Budget Officer, Purchasing Officer, and Human
Resource Officer. The Product Department Managers desk is located on the far left
corner and has a rectangular meeting table with six chairs.

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CEO OFFICE

The CEO office space consists of a combination desk with three rolling chairs,
equipped with a telephone and a desktop computer. The office space also has a sofa.

Provide division of spaces each offices like for the office of the CEO, the different
department offices, the research team laboratories, the main production line.

D. PROCESS FLOW CHART


Perfumity produces a variety of perfume products according to clients
specifications. The company strives to make products customer friendly and as
well as customized fit to customer needs. Below is the flow of the companys
process, from the accepting order to customers, to delivering the desired products.

Ordering Phase

The customers will be asked to fill up a form. In this form document, this is where
customer preferences and specifications desired will be determined (at least 3 scent
fragrant oil). While customers are answering the form, they are directed by a

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representative production worker to guide them in testing displayed scented oil on
the display area.

Review Phase

After the customer is done filling up the form document, the paper will be passed to
the information desk for order review. Terms of purchasing will be discussed like
50% downpayment, and the other 50% upon receiving of the product, and at least
1 week manufacturing period which means that customers can claim their products
after a week.

Production Phase

The order specification will then be handed to the Production Services Department
Manager for manufacturing approval, and then to the production workers where
manufacturing starts. Under this phase is the process of manufacturing the
perfume.

- Pour 15mL fragrance oil into Erlenmeyer flask.

- Use glass stirrer to add 12 drops of fixative.

- Add 3ml DPG.

- Add 75 mL perfume-grade ethyl alcohol.

- Add distilled water to yield 100mL perfume at 15 % concentration.

- Add a drop of perfume grade colorant (optional)

- Pour solution into amber bottle.

- Refrigerate for 7 days or store in dry room temperature for 14 days.

Packaging Phase

After the refrigeration of amber bottles containing the perfume solution, these are
stored into perfume containers of varying sizes, design and material.

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Storage Phase

Finished perfume products are store in the warehouse in boxes at room


temperature. These boxes are labeled on names of buyers.

E. INVENTORY MANAGEMENT

The warehouse is where all raw materials, stocked goods, tools, and personnel
necessities are found. The warehouse consists of two racks, two hanging cabinets,
and three shelves. The racks are for materials that newly arrived for manufacturing
consumption. The hanging cabinets are for handheld tools and safety materials. The
three shelves each have different functions. The first shelf, located on the bottom most
part is used as a locker for company personnel to place their belongings. The second
shelf located in the middle is used for storage of surplus goods. The third shelf located
on the uppermost part is used for storage of current raw materials for current
manufacturing consumption. Each shelf are labeled, separated, and assorted
according to what type of processes the materials are to be used. The warehouse is
under supervision by the management services department. All materials in the
warehouse are being recorded by the purchasing management officer. The budget
laid for purchases of materials are taken care of by the accounting and budget

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management officer. Human resources officer is responsible for records concerning
employees and materials and belongings placed in the lockers.

F. MAINTENANCE PROGRAM
With the companys budget tight and workers stretched thin, a maintenance
program is a very essential aspect that the organization must consider. The following
are measures for a maintenance program for the company:

1. Semi-annual machine check-up by specialists : machines and other


equipment must have a semi-annual check to make sure that machines are still in
good condition, to prevent further malfunctions of machines/equipment, and to remain
safe and quality working condition and product manufacturing performance.
2. Weekly warehouse check-up : a weekly warehouse check-up is done to
survey, inspect, and record quantity of raw materials, to record the amount of materials
used, the amount of materials that were newly purchased, to prevent accounts and
issues of theft, to ensure quality of materials used for manufacturing if materials are
still desirable for manufacturing consumption.

XVIII. Financial Aspect


A. TOTAL PROJECT COST
Total project cost is defines as the overall costs of a project incurred through the startup of a plant
or a facility. Total project cost can be computed by getting the sum of total estimated cost
(plant/facility, engineering and design costs) and the project costs (research and development,
transportation cost, utilities, etc.

B. Operational Expenses per Life Cycle Stage


1. Introduction
Pefumity establishes its business with three marketing competition. A cost plus pricing
strategy provided the basis for the determination of the initial prices set by the
manufacturing firm which is based on the results of the survey. In the other hand,
operational expenses fully depend on the direct material costs, direct labor costs and
miscellaneous of the product and also how much the manufacturing firm will price the
product. The expense is derived from the sum of direct material, direct labor, overhead
costs, and the percentage from which the manufacturing firm decides upon.
2. Growth

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This stage is where the firm experiences a significant increase in sales, market,
and profit. There is widespread popularity of the product to people. In this stage,
Perfumity will take actions in improving its research and development to create
more innovative and high quality product. Although this measure may pose an
increase in costs for the company, the firm will decide to increase costs on product
since it is still in growth and will market profitably even with the increased cost.
3. Maturity
Perfumity product already identifies its peak demand where sales slowly decrease.
Competition in the market is greatly increasing in this stage. The firm would share most
of its expenses on product research to constantly control market by making products
unique and different from others.

4. Decline
There is a fall in demand and in sales and the product will start to demerit as more and
more competitors manufacture the sae product competing on the market. Innovation will
be accomdated by Perfumity by starting again through improvement of research
development, making new and better products that will be profitable again in the market.
C. Salaries and wages
1. Introduction
This stage, Perfumity builds capital and emphasize more on the aspect of
marketing and research development to create products to sell in the market.
Salaries for the research and development team are top priority in this stage since
a new product is a must in this stage. Second would be the essential departments
of the firm like the marketing department, and production department.
2. Growth
Revenues and profit increase quickly in this stage. An increased number of
laborers is needed to work on rising demand of products in the market. The rising
revenues is well compensated by the increase laborers. Salaries of employees in
this stage is expected to be higher and will still continue to increase.

3. Maturity
In this stage, Perfumity have already realized marketing peak of the product and
has already collected large amount of assets. Perfumity will continue to provide
the manufacturing of products and will continue to coordinate with the research
and development team to create more innovative products which will still be

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compensated with the highest amount of salary but not as much salary as in the
growth stage. All other employees and department also experience the same kind
of decrease in work salary.

4. Decline
Decline stage is when company sales are bound in the falling peak. The company
restarts its processes and lowers its number of workers to pave way for more
expenses for the research and development team to make more innovative
products to sell in the market.

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