Fsfinaaal

BATANGAS STATE UNIVERSITY
College of Engineering and Computing Sciences
CHAPTER I
PROJECT SUMMARY
The project summary is a brief comprehensive analysis of the proposed
business. It includes the Introduction, Brief Background of the Study, Objective of
the Study, Scope and Limitations and Project Time Table and Status.
It will also give the analysis and the financer a capture view of the whole
project for easy and rapid comprehension of the proposed business.
INTRODUCTION
Production cost is a costs incurred to a product or service. Production
costs can include a variety of expenses, such as labor, raw materials,
consumable manufacturing supplies, and general overhead. Product costs may
also include those incurred as part of the delivery of a service to a customer.
In Economics, cost of production features a special meaning. It is all about
the payments or expenditures essential to get the factors of production of land,
labor, capital and management needed to produce a commodity. It signifies the
money costs which are to be incurred for acquisition of the factors of production
(Gulhrie and Wallace 2015). Low-cost productions are great since there is quite a
high barrier to entry in the market. Being this competitive in the market means
raising capital or having enough in reserves to achieve economies of scale large
enough to provide a distinct price advantage over competitors.
Cost reduction is a planned positive approach to reduce expenses. Cost
reduction causes a definite increase in margins. The saving in cost may also be
passed to consumers in the form of lower prices or more quantity in the same
price. This will create more demand for the products, economies of large-scale
production, more employment through industrialization and all-round
improvement in the standard of living. Cost reduction is essential of a product
has to withstand its global market. Brand loyalty is fading away fast. Nowadays
consumers have become price and quality conscious. Hence cost reduction is
the key for global competitiveness.
Labeling is used for packaging the product. In marketing, a marketer can
also use a sticker inedible products to impart knowledge of the ingredients of the
food items. This helps to spread awareness among the customers about the item
they are consuming and labeling also helps to mention ingredients. Packaging is
essential as it is used for the identification of the products in marketing. It
enhances the appearance of the label for promoting the product. This is the
major importance of labeling in marketing. In addition, labeling also helps to
provide the information about a product to the prospective customer.
The study focused on the current bottle labeling process at Buko Cyris.
Business Owners use labeling to their products to bring identification. This kind of
labeling helps a viewer to differentiate the product from the rest in the shelves of
the market. This study will provide an assessment on alternative comparison on
whether to place a sticker as a label neither printing label using a machine nor
the supplier of the bottle will provide a printed label bottle that could help the
company in reduction of cost, not only the cost but also the impact on productivity
and competitiveness of the business.
Brief Background of the Study
Buko Cyris is a business located at Malabanan, Balete Batangas.
Specifically the business is known for making buko juice. The business is
operated for over 20 years, established by the father of the current owner, Mr.
Amilano, Buko Cyris supply buko juice in many areas of Lipa and some areas of
Laguna. Year by year the demand of buko juice they produce increases due to
customer demand. Hundred thousands of bottled buko juice is produce in Buko
Cyris every year which proves that there is high demand of buko juice. This
prompted the researchers to conduct a feasibility study on the cost analysis of
bottle labeling process to assist the owner in decision making.
Good bottle label design can be very telling in the quality of its contents
and there’s a long history that’s led the industry to its current practice. Today,
there are a number of alternative print methods, but what remain of the utmost
importance are the pieces of information and the artistry on the bottle
labels. Distinctive bottle design customized to the product personality and bottle
type will certainly set you apart from the competition. Buko Cyris, business
producing buko juice owned by Mr. Amilano, labels an average of 4000 bottles
per day. It is manually operated by using blower and plastic label.

The stable customers of Buko Cyris, are from different places in Lipa City
and, they are the one who sells and distributes the produced buko juice to
convenient stores, schools and canteens. The increasing number of customers
and demand of the product made the owner think about maximizing the profit
generated with a low production cost. Upon the study, there are some factors to
be considered and this study will help the business in looking for reliable
information.
The proponents will focused on cost analysis to decide whether to stick in
their current process which is placing a sticker as a label neither printing label
using a machine nor the supplier of the bottle will provide a printed label bottle.
The main purpose of the study was to know from what alternatives the company
would benefit.
Objectives of the Study
This study aim to determine the economic feasibility, impact and benefit
analysis wherein each alternative was analyzed. Alternatives under study were
placing a sticker as a label neither printing label using a machine nor the supplier
of the bottle will provide a printed label bottle at labeling process of bottles at
Buko Cyris.
The study determined which alternative brought the most effective way for
the company in terms of cost efficient. Specifically, this study aimed:

1. To establish the advantages and disadvantages of the current labeling process
of buko juice bottle.
2. To determine the benefits of replacing the existing process with the other
proposed alternatives.
3. To assess the financial impact of the existing strategy used by the company.
4.To estimate the cost between the alternatives based on their initial investment
and production cost.
5. To evaluate which alternative that the company will benefit from and most
importantly, the most feasible alternative after the analysis.
Scope and Limitation
The proponents presented all the factors that may be considered to
analyze not just the impact but also all the cost of money incurred in replacing
the current method. The proponents interviewed the business owner of the
company to acqure additional information on the situation of its existing labeling
process. The researcher used comparative and benefit cost analysis to
determine the cost incurred.
The researchers used engineering tools in evaluating the alternatives,
particularly Benefit Cost Ratio and comparing alternatives. To determine the
desirability of the project, the researchers used benefit-cost ratio. The findings
and results of the study helped Buko Cyris to have an idea or information which
they serve as a basis to increase their profit and lower down their cost.
Definition of Terms
Definition of terms will set as a guide for the readers to understand
unfamiliar words that will be encountered in this research study. The following
are presented, discussed and defined in relation to its integration on this
research. For better understanding of the study, the following are defined
conceptually and operationally.
Benefit/Cost Analysis. It is an indicator used in the formal discipline of benefit
analysis, which attempts to summarize the overall value of money of a project or
proposal.
Comparing Alternatives. Economic comparisons are tremendously important in
our society, and are usually used to select between alternatives. In this study
comparing alternatives were used as the determinants for the company to
decide to solve their problems.
Demand Analysis. The demand analysis refers to the organized processes
aiming at exploration of a certain variable behaviour (demand) in future, based
on a systematic study of the existing historical data. It is an economical term
indicating the volume or quantity of the commodities and/or services demanded
within a certain period, at a certain price level, and from a certain market. The
demand will be analyzed both in the past and future through the use of the
mathematical methods so as to predict the actual demand on the commodity or
service in future (Yousuf, 2002).
Depreciation. It is the reduction in the value of assets using specific models and
rules (Blank et. al, 2005).
First Cost. It is the total initial cost, including purchase and set-up cost (Blank et.
al, 2005).
Initial Investment. This is the total first cost of all assets and services required to
initiate the alternative (Blank et. al, 2005). In this study, it is the total cost of the
expansion which includes the first cost, maintenance cost and operating cost.
Liabilities. It is a current obligation of an entity arising from past transactions or
events.
Payback Period. This is the estimated time, usually in year, it will take for the
estimated revenues and other economic benefits to recover the initial investment
and a stated rate of return (Blank et. al, 2005). In this study, it is the estimated
time for the expansion of the business to recover its initial investment.
Productivity. It is defined as the relationship between results and the time it
takes to accomplish them. Time is often a good denominator since it is a
universal measurement, and it is beyond human control. (Prokopenko, J., 1987.)
In this study, it is the ratio of outputs to inputs. It refers to the volume of output
produced from a given volume of inputs or resources. If the firm becomes more
productive, then it has become more efficient, since productivity is an efficiency
measure.
Project Timetable and Status
As part of the study, the group interviews the owner and workers to gather
data regarding the proposed project. A timetable has been developed by the
proponents for the pre-production activities.
Activities:
1. Project Conceptualization and Identification
2. Research, Data Gatheringand Conducting Surveys
3. Prepartion, Screening and Evaluation of Feasiblity Study.
4. Preparation of Necessary Materials.
5. Assigning/Scheduling workers in the production.
6. Installation of equipment and other supplies in the production area.
7. Pre- Operation
8. Start of Operation
2019 2020 2021
N ACTIVITIE D J F M A M J J A S O N D J F
o. S E A E A P AY U U U E C O E A E
C N B R R N L G P T V C N B
1 Project
Conceptualiz
ation and
Identification
2 Research,
Data
Gatheringan
d Conducting
Surveys
3 Prepartion,
Screening
and
Evaluation of
Feasiblity
Study.
4 Preparation
of Necessary
Materials.
5 Assigning/Sc
heduling
workers in
the
production.
6 Installation of
equipment
and other
supplies in
the
production
area.
7 Pre-
Operation
8 Start of
Operation
Gantt Chart
CHAPTER II
ASSESSMENT OF EXISTING CONDITION
The major goal of the production is to increase productivity by determining
the best alternatives based on proper human resource planning inside the
organization. This chapter represents the description of theproject, purpose of
the project, the company profile and the existing condition of BukoCyris.
A. Nature of the Project
The proposal entitled "A Comparative and Cost Analysis in Labeling
Process: A Feasibility Study at Buko Cyris in Malabanan, BaleteBatangas."
served as basis in analyzing and evaluating whether to use the current method,
buy a machine that can labels a bottle and buying a bottle with print provided by
a supplier. The researchers proposed to conduct a research in regards to this
matter. If the proposal would be implemented, BukoCyris would benefit because
it would help the company in increasing production output.
B. Purpose of the Project
The project was conceptualized in response to the increasing demand of
the product to the market. Continuous demand of the product inclines to the
production of product to the business. As BukoCyris customer demand increased
it can change the fact that the business is continually growing.

The business is one of the most well-known buko juice maker in the
locality. The problem is the increased in demand of the product makes it also to
increase the cost of producing buko juice. The business manually labels the
bottles of buko juice by plastic label and blower. In one 8-hr shift the business
must label an average of 4000 bottles.
Based from the owner, labelling the bottles by plastic label and blowers
takes time and cost too much. The owner wants to achieve a maximum profit
with a low production cost. Through this project the business owner will help in
decision making.
C. Name of the Enterprise
The business name was BukoCyris, one of the well-known producer of buko
juice in locality. The business is duly registered to governmental agencies for the
legality of business operation. It is a family business that is established by Mr.
and Mrs. Jamilano in Malabanan, BaleteBatangas. In over 20 years, the business
is responsible for making “buko juice”, supplying the area of Levitown in Lipa City
and other areas of Laguna.

D. Current Layout
Pouring and Storing
Coconut Cutting Bottle Washing
Bottling
Bottle Labelling
Figure 1. Current Layout
Demand Analysis
This section shows the historical demand of Buko Juice Plastic Bottles for
better understanding of the output production to satisfy the demand of the
customer. Data on the demand was gathered by the given data of the company.
Historical Demand 2014
Months Demand
January 45220
February 45780
March 59445
April 42315
May 42305
June 33935
July 28095
August 35915
September 52415
October 58950
November 57490
December 48990
TOTAL 550855
Source: BukoCyris
Historical Demand 2015 Historical Demand 2016
Months Demand Months Demand
January 49345 January 55650
February 49960 February 54590
March 63289 March 65440
April 46955 April 49210
May 44670 May 47840
June 36704 June 35990
July 32585 July 33594
August 35302 August 39450
September 53450 September 56225
October 55143 October 59155
November 58197 November 57065
December 55450 December 58900
TOTAL 581050 TOTAL 613109
Source: BukoCyris
Historical Demand 2017 Historical Demand 2018
Months Demand Months Demand
January 59367 January 63670
February 59415 February 62253
March 67190 March 71465
April 52150 April 53215
May 49110 May 51410
June 32765 June 39724
July 33015 July 37325
August 39980 August 42078
September 58015 September 60245
October 61166 October 63392
November 61150 November 62563
December 59110 December 60310
TOTAL 632433 TOTAL 667650
Source: BukoCyris
Historical Demand (2014-2018)
Year Demand(pcs)
2014 550855
2015 581050
2016 613109
2017 632433
2018 667650
The historical demand for Plastic Bottles shown in Table reflects growth of
demand from 2014 to 2018. The proponents obtained the historical demand data
given by the company. For the past five years, the total demand is 3,045,097.
800000
700000
600000
500000
400000 Historical
Demand
300000
200000
100000
0
2014 2015 2016 2017 2018
Figure 2 : Historical Demand

This figure shows the graphical presentation of the historical demand in
the past five years. The graph shows that there is continuously increasing of
demand of the the company.
Table
Projected Demand (2019-2023)
Year Demand(pcs)
2019 694511.3
2020 723008.6
2021 751505.9
2022 780003.2
2023 808500.5
Result from Statiscal Straight-Line Method

The table shows the projected demand for the next five years 2019-2023.
The table implies that the demand for buko juice plastic bottles will have a yearly
increases
Projected Demand
820000
800000
780000
760000
740000
720000
Projected Demand
700000
680000
660000
640000
620000
2019 2020 2021 2022 2023
Figure: Projected Demand
This figure shows the graphical presentation of the projected demand for
the next five years. The graph shows that there is continuously increasing of
demand of the company.

Chapter III
TECHNICAL FEASIBILITY
This chapter presents the Project, Project Location and the alternatives for
the decision making of the company.
The Project
This study aimed to determine which of the alternatives should be chose
in line with the competencies improvement and reduction of cost. The proponents
wanted to assist the company in its decision making process which will have
great effect in terms of output production of the labeling section.
In capability to determine the cost incurred by the alternatives, the
proponents listed and evaluated the possible solutions to the problem of the
company. The proponents evaluated the desirability of the project through an
industrial engineering approach for investment and cost analysis. The results of
the evaluation and analysis by the proponents maybe used by the company to
decide whether they should adopt one of the alternatives.
The Company
Buko Cyris is one of the well-known producer of buko juice in locality. The
business is duly registered to governmental agencies for the legality of business
operation. It is a family business that is established by Mr. and Mrs. Jamilano in

Malabanan, Balete Batangas. In over 20 years, the business is responsible for
making “buko juice”, supplying the area of Levitown in Lipa City and other areas
of Laguna.
Location
The location of the Buko Cyris is located at Malabanan, Balete Batangas,
this is where some of the product output came from.

Existing Process
Process 1
PREPARATION
Get the coconut from
the pile.
Placing the coconut in
coconut cutter.
CUTTING
Cutting of coconut in half by
a cutter.
Extracting of coconut juice
POURING AND STORING

Pouring of coconut juice and
storing it in a container.
GRATING
Grating of coconut meat
Process 2
LABELLING
Labelling of coconut juice bottle.
BTTLE WASHING
Washing of bottles manually
FILLING OF COCONUT JUICE

Filling of coconut juice in bottles
FILLING OF COCONUT MEAT

Filling of coconut meat in bottles
INSPECTION AND CAPPING OF BOTTLES

Inspection and putting caps in bottle
Process Flow Chart
The figure above shows the current flow chart of the process involved in
the production of the company. In Process 1, It starts with the preparation
process where in the operator needs to place the coconut into the coconut cutter.
Next is cutting of coconut in a half and extracting the coconut juice. After this, the
extracted coconut juice will be poured and stored in a container. Then the cut
coconut will then go through grating process of coconut meat. In process 2, it
starts in labeling of bottles by the use of blower and plastic label. After labeling,
next is washing the bottles manually. Then the next process is filling of coconut
water and coconut meat into the bottle. Lastly, the filled bottles will be inspect
and capped by the operator.
Process Flow Chart of Putting Plastic Label Using Blower
Chart Symbols Process Description
Get the bottle
Get the sticker
Open the sticker plastic
Insert the plastic sticker outside the

body of bottle
Get the blower
Turn on the blower
Wait until it became hot
Put the blower into the bottle with

sticker
Put down the blower

c
Check the blowered sticker pasted in
c the bottle.
Geographical Area of Dispersion
Buko Cyris is located in Malabanan Balete Batangas .This branch is the
only branch of buko Cyris in region. It has its production area where all the
process are performed. Buko Cyris is known for its delicious buko juice in
Batangas ang Laguna.
The study is about applying label using sticker plastic on buko juice bottle
where in the researchers suggested an alternatives in applying labels. The study
is focused on reducing cost and meeting its needed demand .This is because the
current process takes time and cost too much. One way to have a higher
production is using a machine where in the company will not able to provide
printed sticker plastic and blower. The other alternative is Outsourcing. In this
alternative, the company will be having a supplier that will make the printed
bottle that will be delivered to the company.
One of the alternatives may address the problem.With this, the
reseachers.studies and analyzed its effect to the company's cost and which
could be more helpul in fulfilling desired output.
Shrink sleeve Labeling
Resistance to friction
Shrink labels can become damaged during transport due to abrasion
between the bottles themselves or against the walls of the cardboard boxes. This
can cause scratches and deterioration of the labels, even to the point of
becoming detached.
Easy to apply
Shrink labels can be applied by hand and do not require machine or
complicated to adhere on surfaces of bottle.
Cost-effective
Businesses will surely find that switching to much lower cost of labelling a
major advantage considering no expensive tooling or set up costs are required.
COST OF RAW MATERIAL AND LABOR
BOTTLE P 2.40
STICKER P 0.35
BLOWER P 1500
LABOR P 0.14 per bottle or

P 50 per bundle
Labelling Machine
User Friendly
User-friendlier machine increase the efficiency of operator and also create
better working experience.
Maintenance
Machine with low maintenance increase the life of machine and also
saves the valuable time and expenditures of company.
Productivity
Machine with above all features put you as well as your company in a
good shape showing the increasing rate of productivity.
Down Time
Lower down time of machine saves manpower increase the productivity
and effecting headache free management.
Outsourcing
Increased Efficiency - choosing an outsourcing company that specialises in the
process or service you want them to carry out for you can help you achieve a
more productive, efficient service, often of greater quality

Controlled Costs - cost-savings achieved by outsourcing can help you release
capital for investment in other areas of your business
Increased Reach - outsourcing can give you access to capabilities and facilities
otherwise not accessible or affordable
Greater Competitive Advantage - outsourcing can help you leverage knowledge
and skills along with your complete supply chain
Outsourcing can also help to make your business more flexible and agile, able to
adapt to changing market conditions and challenges, while providing cost
savings and service level improvements.

"A COMPARATIVE AND COST ANALYSIS IN LABELING PROCESS: A
FEASIBILTY STUDY AT BUKO CYRIS"
A Feasibility Study Presented to the Faculty of
Lipa City
In Partial Fulfillment of the Requirements for the Degree of
Bachelor of Science in Industrial Engineering
By:
Ebuen, John Paul S.
Pesigan, Jhonson P.
Tumbaga, Bianca O.

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BATANGAS STATE UNIVERSITY

College of Engineering and Computing Sciences

The project summary is a brief comprehensive analysis of the proposed

business. It includes the Introduction, Brief Background of the Study, Objective of

project for easy and rapid comprehension of the proposed business.

Production cost is a costs incurred to a product or service. Production

costs can include a variety of expenses, such as labor, raw materials,

consumable manufacturing supplies, and general overhead. Product costs may

also include those incurred as part of the delivery of a service to a customer.

In Economics, cost of production features a special meaning. It is all about

the payments or expenditures essential to get the factors of production of land,

labor, capital and management needed to produce a commodity. It signifies the

raising capital or having enough in reserves to achieve economies of scale large

enough to provide a distinct price advantage over competitors.

Cost reduction is a planned positive approach to reduce expenses. Cost

production, more employment through industrialization and all-round

improvement in the standard of living. Cost reduction is essential of a product

the key for global competitiveness.

Labeling is used for packaging the product. In marketing, a marketer can

essential as it is used for the identification of the products in marketing. It

major importance of labeling in marketing. In addition, labeling also helps to

provide the information about a product to the prospective customer.

the market. This study will provide an assessment on alternative comparison on

and competitiveness of the business.

Brief Background of the Study

Buko Cyris is a business located at Malabanan, Balete Batangas.

customer demand. Hundred thousands of bottled buko juice is produce in Buko

prompted the researchers to conduct a feasibility study on the cost analysis of

bottle labeling process to assist the owner in decision making.

per day. It is manually operated by using blower and plastic label.

convenient stores, schools and canteens. The increasing number of customers

The proponents will focused on cost analysis to decide whether to stick in

Objectives of the Study

the company in terms of cost efficient. Specifically, this study aimed:

1. To establish the advantages and disadvantages of the current labeling process

of buko juice bottle.

and production cost.

importantly, the most feasible alternative after the analysis.

Scope and Limitation

The proponents presented all the factors that may be considered to

company to acqure additional information on the situation of its existing labeling

process. The researcher used comparative and benefit cost analysis to

determine the cost incurred.

The researchers used engineering tools in evaluating the alternatives,

particularly Benefit Cost Ratio and comparing alternatives. To determine the

Definition of terms will set as a guide for the readers to understand

are presented, discussed and defined in relation to its integration on this

conceptually and operationally.

Benefit/Cost Analysis. It is an indicator used in the formal discipline of benefit

analysis, which attempts to summarize the overall value of money of a project or

Comparing Alternatives. Economic comparisons are tremendously important in

comparing alternatives were used as the determinants for the company to

decide to solve their problems.

Demand Analysis. The demand analysis refers to the organized processes

aiming at exploration of a certain variable behaviour (demand) in future, based

on a systematic study of the existing historical data. It is an economical term

indicating the volume or quantity of the commodities and/or services demanded

mathematical methods so as to predict the actual demand on the commodity or

service in future (Yousuf, 2002).