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THE PROBLEM AND ITS SCOPE

Introduction

This chapter contains and discusses some vital date, facts and other related

information pertaining to our study on the viability of this Bamboo Mug.

The group unanimously believes that bamboo mug has a tremendous viability if properly

introduce to the market. We are, indeed, very optimistic that this bamboo mug has a huge

potential market particularly to the countries strongly promotes the usage of an eco-friendly

materials. We have decided to make this project study because we want the students of

Cagayan De Oro to experience the uniqueness of bamboo mug.

This particular business study will promote awareness and stir up the group members'

interests to continue for this project endeavor in the open market after it will be found

feasible and viable.

Background of the Study

Bamboo has become a popular alternative material in everyday products to help our

environment eco-friendly these days. Bamboo mugs are one of the group member’s ideas.

Bamboo mugs are an idea of one of the researchers and this idea suggested to the

group that why not make it a small business. Without hesitation that idea received an

approval of the group and decided to put all their effects and enough knowledge to put their

idea into a proper business for future references.

The said business is to organized and managed by a partnership composed of nine (9)

professional individuals. The brand name of the product that the company would like to

produce and sell is called "B-Mug", which B stands for Bamboo. The business will engage in
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the production and marketing of B-Mug. Although the company's product brand name

sounds like "B-Meg", it is still attractive to the consumers because it is unique and it sounds

eco-friendly name.

Bamboo is suitable for making a mug or cup because it is a great material to make an

eco-friendly cup, they can be grown without pesticides and grow incredibly fast. Bamboo is a

plant product therefore; it stores carbon and will biodegrade. They can be harvested over and

over again because as a stem is cut, the plant will grow new stems to replace it.

There are so many benefits people can get if they use bamboo cup. First is, it is eco-

friendly because it is made naturally sustainable and biodegradable bamboo. It will keep us

safe (food safe, dishwasher safe, BPA and Phthalate free). And, it has a great taste because

the bamboo cup and lip won't affect the taste of your drink like silicone lids do.

The site of production will be at Brgy. Samptulog, Alubijid, Misamis Oriental. The

place is best for the project for it is accessible for the production of the B-Mug. In that certain

place, there are plenty of bamboos that can be found, which is the main material of this

project.

Framework of the Study

The study increases a series of careful and deliberate procedure on the significant

component that decide the reasonability of the proposed product. The various information,

certainties and other pertinent data being exhibited would turn into to overriding yard stick

for the researchers to choose whether to proceed with extend or completely put it to

insensibility.
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The way that the researchers would go through to finish the study is a difficult one. It

involves a great deal of tolerance, perseverance and of a decent time. There are five (5) major

groups of studies the researchers would perform and accomplish, namely market study,

technical study, financial study, socio-economic study and management study.

The market study is a study that analyzes market demand for a particular product or

service. In this study it contains the pricing, marketing strategy, promotion and profitability

of the proposed product. It analyses the activities in a market in regard to such influences as

location, demand, and competition which may or may not affect the value of property. It

provides necessary information about customers and the competition.

The technical study assesses the product description and processes. It conjointly

finds the appropriate and accessible location, packaging of the product, and the raw materials

and supplies. The technical study conjointly deals with the suitable variety of instrumentality

and workforce for the planned product.

The main component in this study is the location and site of the product and it is

indispensable part of technical feasibility study. It follows the demand, size and requirements

of the project. The equipment and supplies needed for the product is dependent on

production.

The financial study is a study that primarily involves the computation of the projects

profitability, financial leverage and liquidity. It resolves issues pertaining to the total project

cost and the working capital requirement. It also uses financial ratios to forecast return on

investments, payback period and break-even point. It involves using financial data to assess a
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company’s performance and make recommendations about how it can improve going

forward.

The socio-economic study investigate intends to talk about and decide the monetary

development of the community. This examination discovers how the task would help nature

concerning the issues about the plastic. Likewise, on how the task will influence the human

strength of each individual utilizing the item that is, the bamboo mug.

The last is the management study that is a good addition and coequal to financial

system. It allows the management style, the technique, and the practice in the company. It

also involves the do's and don’ts or the rules necessary for the project. It also interrogates and

breaks down the salaries of the workers and their benefits.

Statement of the Problem

This Feasibility Study, after progression of intensive research and information

gathering, it should answer the following question as follow:

1. What is the Market Feasibility of the Bamboo Mug in terms of the following:

a. Product and Service

b. Supply and Demand

c. Pricing

d. Promotion

e. Market Strategy

2. What is the Technical Feasibility of the Bamboo Mug in terms of:

a. Product Description

b. Location
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c. Equipment

d. Materials and Supplies

e. Product Process

f. Manpower

3. What is the Financial Feasibility of the Bamboo Mug in terms of:

a. Financial Assumption

b. Profitability

c. Product Cost

d. Working Capital

e. Return on Investment

f. Payback Period

g. Break-even Point

4. What is the Socio-Economic Feasibility of the Bamboo Mug in terms of:

a. Employment

b. Environmental Development

c. Government Revenue

d. Entrepreneurship

5. What is the Management Feasibility of the Bamboo Mug in terms of:

a. Organizational Chart

b. Rules and Regulation

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c. Duties and Responsibilities

d. Policies

e. Salaries and Benefits

f. Management Style

Limitations of the Study

This Feasibility Study of the Bamboo mug focuses on the young professionals and

adults who likes to drink a coffee and tea. It premises within Cagayan De Oro City

specifically in the market and in Liceo De Cagayan University.

Significance of the Problem

The result of the study will be of great help to the researchers on certain

circumstances. It gives the number of people direct information on how to begin a feasible

business. This study also helps the researchers to grow their individual entrepreneurial skills

and there by suitable to become prosperous business man and women in the future.

In addition, this study can give the consumer a finished product with significant

information required for starting their own businesses. This study on Bamboo mug if use for

reference will become good enough and will yield a substantial amount of revenue.

On the other hand, the students, teachers and every drinking individual who are the

target market of the proposed product would also receive a benefit. Aside from the quality of

the proposed product, bamboo mug will be affordable.

Definition of Terms
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B-MUG - It is a mug made out of Bamboo

BAMBOO - it is a grass which the researchers use to make the product.

MUG - it is a cup with a handle that is use to put on the coffee you made.
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METHODOLOGY

The feasibility study in producing Bamboo Mug starts with the planning for the

implementation of the trial Bamboo Mug materials, collecting, and analyzing the data

prepared. The methodology carried out in this research includes details on the setting, design,

the tools, the procedures, and the nature of the gathered data.

RESEARCH SETTING

The setting is within the Liceo De Cagayan University, which represents the target

market of the study. It is the specific location of the study, of one of the schools of

Kauswagan, Cagayan de Oro City, Liceo De Cagayan University is the school which were

the researchers are studying.

RESEARCH DESIGN

The feasibility study follows the descriptive research design. This research design

deals with the analysis of data from the survey questionnaires.

RESPONDENTS AND SAMPLING PROCEDURE

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The respondents selected came from a same population of the target market, Liceo de

Cagayan University. After consideration of factors that would result from the best description

of our data, a sample from ABM strand was selected. A sample of Grade 11 and 12

respondents was chosen to be the most practical and applicable number for this study.

Various areas of the sample population carried a random selection of respondents that

included students and teachers.

RESEARCH INSTRUMENTS

The survey will be guided using the multiple-choice questionnaires. The

questionnaires will be focusing on the number of people who drink coffee and the number of

people who prefer eco-friendly materials for their mug. The data gather will be presented and

analyze through the Slovin’s formula.

RESEARCH ETHICAL PROTOCOL

A final researcher made questionnaires was approved by our research adviser, Ms.

Uzziel Banaag, after a thorough and systematic review of our research outline. The

researchers will ask permission to the chosen respondents before conducting the survey.

DATA GATHERING PROCEDURES

The researchers distributed questionnaires to the respondents through random

students. Data gather concentrated at Liceo De Cagayan University ABM students Grade 11

and Grade 12 students.

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STATISTICAL TECHNIQUES

The nature of the research design being descriptive shows techniques of tallying the

data gathered and illustrating these data using Slovin’s formula.

TECHNICAL FEASIBILITY

Introduction

To be able to introduce the product to the market, the researcher should determine the

appropriate method and technique to produce a product. The selection of the methods and

factors that may assist and support the production of our "Bamboo Mug" should be

undertaken first.

The success of the study is determined through the different areas that could affect the

production and marketing of the product. These areas include the manufacturing process,

equipment, raw materials, and location. The product, "Bamboo Mug", is marketable to

everyone especially to young professionals and adults, who likes to drink coffee and tea. The

raw materials of the product are those eco-friendly materials. The proper process of making

the bamboo mug are strictly and highly observed. The bamboo mug has its designs like

carving an image, making calligraphy, painting the mugs with advisable paint and even

customizing the mugs. And the bamboo mug has also its different sizes like medium and

large size and even extra sizes.

The researcher must choose and decide carefully on the preparation for the production

and introduction of the product to the market. The availability and determination of the raw
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materials, equipment, and location should be highly considered and should make an impact

upon introducing the product.

PRODUCTION PROCESS

The process discusses how the products will be produced, specifying each step that

will involve. The said steps are shown in the process flow chart. This part accommodates the

use of materials and labor to create a product. It aims the efficiency of the operation and

reduce costs. In making Bamboo Mug the researcher doesn't need to use any electronic

materials, they tend to make it in a manual way or by hand. The production process of

making this is to identify all the materials and then follow the process of doing this to

transform it into a unique mug with an amazing design on it.

STEP 1. Having a Supplier

a. To view a possible quality of producing suppliers.

b. To choose one of the dealers and engage business with;

c. To have one consistent.

STEP 2. Purchasing Ingredients

a. To assure the availability of the materials.

b. To observe the quality of materials.

c. To have a satisfactory quality of materials at the lowest cost possible.

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STEP 3. Conducting Inventory

a. To check if the materials purchased are all delivered on scheduled.

b. To check if the materials are all clean.

STEP 4. Preparing the Product.

a. Prepare the Materials

b. Cut the bamboo into mug size and cut a handle

c. Clean the bamboo using sand paper

d. Install the handle in the bamboo mug size

e. Make a design and attached to the bamboo mug

STEP 5. Product Packaging and Presentation

- To pack and present the product it should be presentable.

STEP 6. Pricing

a. To provide a price that would give the equity to the quality of the product and the

materials used.

b. To set a price that would be affordable enough to the target market.

EQUIPMENT SUPPLIES

1. Bamboo – the main material in producing the product

2. Wood Glue – used to attached the handle to the bamboo

3. Paint – used to design the product

4. Sand Paper – used to smoothen the mug

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5. Paint Brush – used to design the product, partner it with the paint

6. Stainless- used to put inside the bamboo mug to keep clean

Materials (for week) Quantity Price Total Cost

Bamboo 5 25.00/pcs 125.00

Wood Glue 2 100.00/pcs 200.00
Paint 3 50.00/pcs 150.00
Sand Paper 5 20.00/pcs 100.00
Stainless 5
Figure 1.
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PLANT LOCATION

Figure 2.
The store location is in Liceo De Cagayan University, Rodolfo N. Pelaez blvrd.,
Kauswagan, Cagayan de Oro City.
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STRUCTURE LAYOUT

DISPLAY DESK

CABINET/
STORAGE
AREA
WORKING
DESK

Figure 3.
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Figure 4.
LOGO

RAW MATERIALS

Raw materials are vital necessities to businesses that sells their products. High quality

materials must be used to ensure a quality product. The materials needed to produce B-mug

are:

1. Bamboo – the main material in producing the product

Materials (for week) Quantity Price Total Cost

Bamboo 5 25.00/pcs 125.00

Figure 5.

WASTE DISPOSAL
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The business partners are not only concerned of the profit of the business but more on

customer’s satisfaction especially when income to safety and cleanliness.

We will assure that the wastes are properly disposed of through segregation to non-

biodegradable and biodegradable wastes in a container. In this way we can easily keep an eye

on our wastes and we also make sure that the store is clean and the floor is dry to avoid

watery in the area.

LABOR REQUIREMENTS

The following are highly required

Carpenter

Qualification

 Must be good in shaping, cutting and fixing small stuff.

 Must be between 20-50 years old

 Must have prior experience in making bamboo mug.

Carver and Painter

Qualification

 Must be good in carving and painting or mixing colors

 Must be artistic and creative

 Must be resourceful and uses eco-friendly materials

 Must be between 20-50 years old

 Must have a prior experience.

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FINANCIAL FEASIBILITY

Forecasting (5years)

Year Unit Price Per Unit Amount

1 ₱ 3,500 ₱ 49.00 ₱ 171,500

2 3,675 51.00 187,425

3 3,859 54.00 208,386

4 4,052 57.00 230,964

5 4,255 60.00 255,300

Schedule 1: Annual Cost of Overhead Cost (Fixed Cost)

Water and Electricity (320/month x 12) 3,840

Packaging (3,500 at ₱10) 35,000

Total: ₱ 38,840

Schedule 2: Rental Space

Rental (Stall) (1,000/month x 12) 12,000

Service (1,000/month x 12) 12,000

Total: ₱ 24,000

Schedule 3: Depreciation Expense

Production Equipment (799/2years) 399.5

Total: ₱ 399.5

Schedule 4: Materials
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Bamboo 25

Sandpaper 50

Paint 100

Paint Brush 25

Wood Glue 50

Total: ₱ 250.00

Schedule 5: Pricing

Selling Price 49.00

Variable Cost:

Production Cost (250/10 units) 25.00

Packaging (10/10 units) 10.00

Total: ₱ 12.00

Schedule 6: Annual Sales/Production

Year Quantity/Units Unit Price Total

1 ₱ 3,500 ₱ 49 ₱ 171,500
2 3,675 51 187,476
3 3,859 54 208,386
4 4,052 57 230,964
5 4,255 60 255,300

Schedule 7: Annual Cost of Materials

Year Quantity/Units Unit Price Total

(Per 10 Units)
1 ₱ 3,500 ₱ 250 ₱ 87,500
2 3,675 262.5 96,468.75
3 3,859 275.6 106,354.04
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4 4,052 289.4 117,264.88

5 4,255 303.9 129,309.45

Schedule 8: Annual Cost of Packaging

Year Quantity/Unit Unit Price Total

(100/10 Units)
1 ₱ 3,500 ₱ 10 ₱ 35,000
2 3,675 10.5 38,587.5
3 3,859 11 42,449
4 4,052 11.6 47,003.2
5 4,255 12.1 51,485.5

Schedule 9: Annual Cost for Direct Labor (Production)

Year Particulars Total

1 (15/hrs x 6hrs x 365days) ₱ 32,850
2 (32,850/yr x 1.05) 34,492.5
3 34,492.5/yr x 1.05) 36,217.1
4 36,217.1/yr x 1.05) 38,028
5 38,028/yr x 1.05) 39,929.4

Schedule 10: Annual Cost for Repairs and Maintenance

Year Particulars Total

1 (799/2yrs) ₱ 399.5
2 -DO-
3 -DO-
4 -DO-
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5 -DO-

Schedule 11: Annual Cost for Repairs and Maintenance (Pro. Equipment)

Year Particulars Total

1 (799 x 2% x 12months) ₱ 191.76
2 (191.76 x 1.05) 201.35
3 (201.35 x 1.05) 211.42
4 (211.42 x 1.05) 222
5 (222 x 1.05) 233.1

Schedule 12: Annual Cost for Advertising and Promotion

Year Particulars Total

1 (450/month x 12mos.)
2 (5,400 x 1.05)
3 (5,670 x 1.05)
4 (5.953.5 x 1.05)
5 (6,251.2 x 1.05)