Chapter III

TECHNICAL STUDY
BY: DIVINA GRACE M. RODRIGUEZ
VANESSA VASQUEZ
 Coverage of the Chapter
1. Objectives of the Study 6. Direct Materials
2. Product 7. Indirect Materials
- Description of the Product 8. Leasehold Improvements
9. Utilities
- Uses of the Product
10 Waste Disposal
3. Manufacturing Process 11. Direct Labor
- Description of the Process Requirements
- Production Schedule 12. Generalization
4. Plant Location and layout
5. Machinery and Equipment
What is Technical Study?

How the When these

What product
products are to products are to
to be produce?
be produced? be produced?

How much will

Where to What
it cost to
produce the technology to
produce the
products? be used?
products?
Objectives of the
Study Describe concisely what
the research is trying to
achieve.
 Indicate a general
objective ; and specific
objectives (limit 4-5
objectives)
Sample
Objectives of the Study
The general objective of the study is to determine the technical
soundness of Milky Carrot Cookies. Specifically, it attempts to
discuss the following objectives:
1. To describe the nature of the product and its uses;
2. To illustrate the manufacturing process and describe the selling
operation for the product;
3. To determine the necessary equipment, facilities, materials, labor
and other requirements to manufacture and sell the product;
4. To determine the annual production capacity; and
5. To identify the appropriate location, size and layout for the
business.
Product
Description
Name of the product; reason
for choosing it
 Properties of the product –
physical or chemical,
dimension, color design,
size, feature, nutritional
content, safety (LQCC)
whichever is applicable
Description of the Product
“Daing Flakes” is categorized as a convenience product. It is a ready to eat side
dish made from sun-dried fish bottled in vegetable oil with selected spices. Daing Flakes
weighs 227 grams and pack and sealed in 8 ounces glass jar bottled. Each ingredient in
the product contains no preservatives or chemical that are harmful for the health. The
vegetable oil helps to preserved the product in a long time. The life span of the product
is three months it could be frozen or not. This product had undergone with
microbiological resulting to negative in salmonella and E.coli. Customers are then
assured of its good quality and its affordable price.
The following is the nutritional facts of Daing Flakes.
Nutritional Facts:
Serving Size: 1 bottle (8 oz)
Calorie: 855 Kcal
Fat content: 59g
Calories from fat: 531 kcal
*Percent daily values are based on a 2,000 calorie diet. Your daily values maybe
higher or lower depending on your calorie needs.
Table 3.1 presents the nutritional facts of Daing Flakes.
Uses of the
Product

Intended product use;

indicate the major user of
the product
Uses of the Product
The “Milky Carrot Cookies” is considered as a
snack. It is a good substitute for meal. People need a
regular meal schedule, and they need snacks too.
Cookies are now eaten at any time of the day-coffee
breaks, for dessert, a snack and even given as a
welcoming gift. This cookie can give Vitamin A that
promotes growth and healthy skin and hair, also helps
eyes adjust to darkness and helps body resist infections.
Nowadays, people need nutritious food which they can
afford.
Manufacturing Process

 Description of the Process

 Identify the step-by-step process used in
the production of the product (time
needed, how many workers, source of
material, how much/many for each
material)
 There should be a basic/benchmark why
the list of processes were finalized
 Should include standard amount of
materials per production (consistent with
Manufacturing Process

 Includepictures for each step to come

up with a flowchart using pictures
having only one Figure number and title
 IncludeProcess Flowchart (use
process code from Production
Management; circle for operation,
inverted triangle for storage etc.)
 Give allowance for break time
Manufacturing
Process
1. Preparation of Raw Materials and Measuring of
Ingredients
It is very important to know the availability of
raw materials to be used. Worker 1 and 2 must clean
the working area as well as prepare the needed raw
materials and measure the ingredients to be used. It
should have 6kg. of carrots, 8kg. of all-purposed flour,
2kg. of sugar, 200g. of butter, 8 cans of condensed
milk, 1 ½ trays of eggs and ¼kg of salt. This process
takes 15 minutes.
Production
Schedule
Describe the projected scale of operation
for the next several years (5 years)
Set the minimum and maximum rated
capacity of the plant
Consider the maximum level of capacity
where all resources are fully used
Consider the number of shifts/batches per
day, if applicable
Production
Schedule
Consider the number of operating days
per year
The set annual production should be
within the identified market gap
Asses the marketability of the product
Specify in the table title the
amount/size of your product
Production
Schedule
Plant
Location
 In choosing your location, consider the
following factors; consult the CPDO of your
target area for zoning, strategic location for
your business, accessibility/availability of raw
materials, availability of cheap and
moderately priced utilities such as power,
water, telephone service or fuel, proximity to
the distributing outlets, and rental cost.
 Zoning certificate is required
Plant
Location
Plant Size and
Layout
 A plant layout should be clearly depicted through
diagrams and descriptions. A good plant layout is
characterized by minimum materials handling,
effective space utilization, smooth work flow through
the plant, safe and conducive working area for the
workers, safety and sanitation facilities and flexibility of
arrangement
 Specificmeasurement per area and the whole area
should be included
 Plantsize and rental fee per month should be included
<lease contract is required>
Machinery and
Equipment
 It must be identified and individually listed
according to type and use. Identify if it is local
or imported, as well as the manner and cost
of transportation. Identify also if it is
improvised equipment.
 Presentin tabular form (Name of equipment
used, quantity, price per unit and total
price)
 Addshort description for each of important
Factory Equipment, include capacity if applicable
Factory
Equipment
Applicable to all tables – Price
Quotation (see format) is required,
name of company/ies should be
reflected at the bottom of the table as
source
Add a discussion for every table
[Gas Oven. Enclosed compartment for heating, cooking or baking
of food especially cookies. It is an electric oven having 3 layers.]
DIRECT MATERIALS
 Description and specification on physical,
mechanical and chemical properties must be
given
 Include a tabular presentation aside from the description, as direct
materials (description, quantity, unit, unit cost, total
cost), most important material first to the least important
 A basis for the selection of raw materials and supplies must be
presented, also where to get the source of supply (Contract
of Supply), include in appendices
 Finalize first the proportion of ingredients per pack/per piece, then
multiply with annual production schedule, example, carrots 1728kg
divided by 34,560 is 0.05kg, meaning each pack of cookies need 0.05kg
of carrots
Table 3.10
Direct Materials
(Source:Gitoys’s Fruit Store, Tanauan Public Market)

Item Quantity Unit Cost Total Cost

Kamias fruit 230 sacks 200/sack Php 46,600.00
Honey 5,236bottles 90/bottle 471,240.00
Mint leaves 144klgs 700/kilo 100,800.00
Sugar 23sacks 2,400/sack 55,200.00
Water 756container 25/container 18,900.00
Total Php690,336
Purchases .00
DIRECT MATERIALS
 Total direct material for each material per year
divided by the number of working days should be equal to
the standardized amount of that particular material per day
 The summation of amount of ingredients/materials
per pack/pc should be approximately equal to the actual
size/amount of the product
 The unit to be used for quantity is the unit used when
purchasing the material, but also have an estimate of the
approximate weight (ex: sacks -> kg)
 Consider the appropriate unit when purchasing in bulk
orders (ex: eggs – trays instead of pcs)
 INDIRECT
MATERIALS

Include packaging and label cost

Table 3.11
Indirect Materials
Source: Tanauan Packaging Center

Particulars Quantity Unit cost Total cost

Label 144,000 Php 0.20 Php 28,800.00
Bottle 144,000 0.75 108,000.00
Packaging 6,000 2 12,000.00
Plastic
Total Purchases Php 148,800.00
LEASE AND
LEASEHOLD
IMPROVEMENTS
Discuss the monthly rent and
initial cost for the improvement
Table 3.15
Lease Improvement
(Source: CITA Construction and Supply) Schedule 25
Items Amount
Cement Php. 950.00
Concrete Nails 50.00
Flourescent Lamp 500.00
Lumber 4,750
Nails 150.00
Paint 4,800.00
Plywood 7,950.00
Roller 600.00
Sand 600.00
Stainless Sink 6,500.00
Labor 3,500.00
Total Cost Php 30,350.00
UTILITIES
 Electricity, water, gas, fuel, telephone, etc.
 Describe the amount, cost and sources of the
utilities
 Utilities
must be determined in relation to
production schedule and capacity
utilization
 Include a tabular presentation
 Alternative sources of these utilities and the
feasibility of their use must also be described
Table 3.13
Utilities Expense
Source: Batelec, Water District, PLDT

Annual
Monthly
Utilities Consumptio
Consumption
n
Water Bill Php 1,000 Php18,000.00
Electricity bill 2,000.00 24,000.00
LPG Refill 600.00 13,200.00
Internet &
999.00 11,988.00
Telephone Bill
Total Php5,999.00 Php67,18 8.00
WASTE DISPOSAL
A description of quantity, manner of
disposal and cost involved in doing
with expected waste from production is
necessary
 Ifthere is an income generated from
the waste, this should be included in
the financial statement
DIRECT LABOR
REQUIREMENT
 Include the people involved in production
 Thenumber of workers to be employed for
each job classification, the pay scale,
employee development program and
organizational set up
 Table 3.17
Summary of Employee’s
Salary
Source: DOLE, National Wages and
Commission
Designation Daily Salary Monthly Annual
Salary Salary
Manager 325 Php7,800.00 Php 93,600.00
Bookkeeper(Part
- 1,200.00 14,400.00
time )
Worker 1 310 7,440.00 89,280.00
Worker 2 310 7,440.00 89,280.00
Total Php19,760.00 Php286,560.0
0
GENERALIZATION
 Provide
a discussion answering your list
of specific objectives