2.

5 Sources of Equipment
The machineries for the company's operation needs to be purchased for mass production.
Insufficient capacity can lead to detoriating delivery performance. Some machineries will be
purchased online and the company needs to pay for a shipping fee. The main machineries to be
used is a Spiral Dough Mixer, Food Mixer, Toilet Bomb Press Machine, a Laser Printer and a
Paper Cutter. The Spiral Dough Mixer will combine the ingredients and also for grinding all of the
toilet bomb's components. It can contain up to 81 kilograms. The company will be needing only
one unit of the mixer which costs Php 36,000 and a transport fee of Php 3, 071.00. A Food Mixer
will also be needed for combining wet ingredients. It helps prevent the mixture on becoming hard.
It cost Php 4, 160.00 and can be bought on department stores. A Toilet Bomb Press Machine will
be needed which will help in molding the bomb through pressing it in just seconds. It does not
only help to save energy but human labor and time as well. The press costs Php 58, 618 and a
shipping fee of Php 6,000.00. For the packaging, the workers will create boxes by themselves but
will also see to it that the quality will be able to hold the toilet bombs, this is beneficial and cost
effective for the company. A Paper Cutter will be needed for faster labor which costs Php 800.00
and can be availed in department stores or stationaries. For labelling the box, a Laser Printer will
be purchased for Php 5,000.00 and can also be bought at department stores.
2.6 Planned Capacity
For the company's starting business, machineries need to be purchased for mass production.
Insufficient capacity can lead to deteriorating delivery performance, unnecessary increase in work-
in progress and leads to sales personnel confusion and those who are in manufacturing. Inability
to manage capacity can be a barrier to the achievement of maximum firm performance. Capacity
planning is also important for the company's choice of technology. The machines that the company
will use will work 8 hours a day, 6 times a week. For mass production, the machines will be used
all the time especially when mixing ingredients and molding it to become a bath bomb. Since the
company's production is not affected by seasonal fluctuations because it is located in the
Philippines which is a tropical country, there is no need to account for the capacity utilization. This
means that the production of toilet bombs will continue to operate and does not need to force a 24-
hour continuous operation.
2.7 Future Capacity
In the process of making the toilet bombs, time is very precious because it can affect its
texture, color and fizzing properties. Therefore, it is very important to be consistent in making the
product so that it cannot affect the effectivity of the product. It is also important to maximize the
manufacturing facility of the company because the more production that the company can make,
the more income to generate. Each machinery that the company purchased will be maximized by
hiring the right people that can be in charge of the operation of the different equipment. Through
this, it can help in the maintenance of the machines and also decrease the expenses for machinery
furniture and fixtures. Also, hiring the right people can keep track of the critical pathways
whenever technological drawbacks happen. It is also important to map the different processes that
the company follows in the production and this can be achieved by semi-annual evaluation and
reports should be presented so that improvements can be planned. The company can also consider
updates for processes and technology. On example can be automation of machines that can be a
powerful tool in increasing efficiency and can reduce errors together with new software solutions
that can help in the tracking of schedule, inventory and workflow. The company will also commit
to scheduled maintenance of the machineries to be able to reduce the risk of broken equipment and
coming of the time of breakage in the middle of production.
Employee education and training is an ongoing process. Flash Flush makes sure that
training is mandatory such as daily safety training for all personnel using safety gear. New
equipment and technology requires training to get the most value. Employee education is an
excellent retention tactic for Flash Flush wherein new employees take time to become proficient,
causing slowdown in production.
2.8 Terms and Conditions of Purchased Equipment
Flash Flush will be purchasing their materials through online shops and upon purchase, the
online shop (Websaurantstore.com) prefer credit card payment through checkout processes that
accepts all major credit cards including Master Card, Visa, American Express, and Discover. The
store is able to accept most prepaid cards as long as the card has been registered with a billing
address. Only a single credit card any be used to process the order of equipment. The company has
purchased products through credit cards most especially the big and heavy machineries like the
mixers because it is more convenient for them without considering additional fees for installation
of the equipment.
The store also accepts alternative payment methods through checks, money order and wire
transfers for orders. The equipment will be placed on hold until payment has been received. Once
the payment is cleared, the order will be released to process for shipment. Personal checks will be
held for 5 business days while they clear. The holding period is not required if a certified check is
provided. All other alternative payment orders will be released as soon as the payment in received,
with a minimum of 1 business day delay to receive payment.
Since the equipment will be coming from abroad, the price listing is in US Dollars ($) on
the website. Upon ordering outside of United States, the funds captured for an order will be
converted to the local currency of the ordering country on the credit card statement.
The shop has the option of “Call Before Delivery” wherein the carrier will contact the
company approximately 24 hours before the estimated arrival of the order to schedule a delivery
appointment using the phone number provided at the checkout. The shop also offers “White Glove
Delivery” wherein the agent will call to the scheduled Call Before Delivery and trained
professionals will unload the large machineries from the truck, bring it to the room of choice,
unpack the item and remove all packaging debris from the premises. This service shall add 5 to 7
business days to the order’s transit and only includes 30 minutes of onsite time. If on-site time
beyond 30 minutes is required, the company shall pay additional fees.

2.9 Factory Location and Layout

 The Flash Flush Company’s layout is sophisticated and extremely important. Their
objective is to design a combination of product arrangement and shelving that will first attract a
customer to one shelf and secondly direct the customers to another shelve and so on. The company
will place a new and discounted product in front of the display area and this strategy will attract
customers into the store, and with other refined placement strategies, encourages the customer
further into the store. The company also uses another product placement strategy used to situate
every day products near the back of the store, in doing that strategy the customers is forced to walk
by many other products before reaching the more commonly purchased one. In essence, the
company is trying to increase their sales by tempting the customer in purchasing more. Another
scheme used by the retailers is to place complimentary products close together.
Location: Pinewoods Subdivision, Phase 2 Tuba, Benguet
MAY TABLE DITO! RAW MATERIALS NEEDED TABLE 3 APPENDIX C
Raw Materials Needed
For a regular manufacture level, the ingredients required are:
Citric Acid 32 grams
Epsom Salt 32 grams
Baking Soda 64 grams
Hydrogen Peroxide ` 28 grams
Food Coloring 0.00025 grams
Essential Oils 0.001 grams
Total: 156.00125 grams
For the monthly production level having a total of 5828.03875grams
2.11 Cost of Raw Materials
SUMMARIZED MONTHLY COST OF RAW MATERIALS
MONTH PROMOTIONAL BUDGET
July Php 7,991.31
August Php 8,757.60
September Php 11,384.88
October Php 14,887.92
November Php 19,266.72
December Php 25,068.63
January Php 25,068.63
February Php 32,622.06
March Php 55,172.88
April Php 71,702.85
May Php 93,268.44
June Php 121,183.29
TOTAL Php 486,375.21
For more comprehensive monthly cost of raw materials, refer to table 4 in Appendix D.
2.12 Raw Materials Availability
In the production of Toilet Bombs, each ingredient is significant in making it effective. The
availability of baking soda, citric acid and Epsom salts are stable since they are readily available
throughout the year. However, the availability of the essential oils varies depending on the season
on the season since the manufacturing company that Flash Flush cooperated with in supplying the
business with essential oil will be coming from abroad. Also, shipments of the new scents from
their suppliers will affect the products offered by the company. The company may consider
introducing new scents to their products if these occurrences happen.
2.13 Labour
The business owners will be the ones who will be in charge in selling, and in choosing the raw
materials. The company hired 3 retailers since it is a start-up business to sell the product in different
places. The business owners also hired 3 workers who are designated in the making of the product
to be accompanied by the owners. They also included 1 worker who will be in charged in delivering
their product into the designated places with the help of one of the owners.
2.14 Cost of Labour
Since the Flash Flush Company is a starting business, the owner’s salary per day is PHP 500
and the daily salary for the workers is PHP 350. Upon the operation of the company, there will be
a salary increase as the business grows. The company owners will add increase to the salary of
workers during holidays and overtimes.

Indirect Labor Labor Cost per Month

4 Owners 800*4
TOTAL: P 3,200.00
Direct Labor
3 Workers at 400 Labor Cost 1,200.00
TOTAL: P 1,200.00

2.15 Labor Availability

The different workers for this type of industry are available throughout the year, even if
they have no experience in manufacturing. However, part timer is not recommended since the
company shall need continuous operations. Hired employees shall undergo training, seminars and
orientations before their actual labor. This is to ensure their health, answer their queries and also
motivate them to do their best in making the quality products that the company offers. Through
this, the company shall also cover the different needs of their employees and making sure that they
receive equal treatments to each other. There are no foreseeable problems are expected as
most of the work requires no previous skills.

2.16 Labor Productivity

The daily wage of employees shall be based on their quota units. Also their performance
will be based on their efficiency and capability to do their work in a short time with the quality
products that they can produce. Awardee of the month shall also be included as one of the
motivational materials for employees that includes a free rest day that is paid.

2.17 Factory Overhead Expenses

Insurance
A manufacturing company or department must make insurance payments, regardless of how many
units are manufactured. This expense is part of the cost of being in the manufacturing business and
should be considered as manufacturing overhead.
Rent or Mortgage
Rent or mortgage on property for production facilities is also part of manufacturing overhead. The
building must be paid for in order to provide a location for manufacturing. These costs include
land and property, along with any remodeling, refurbishing or customizing.
Equipment
Equipment is an overhead expense for manufacturing. Payments must be made on leased
equipment, and equipment that is purchased depreciates in value. These expenses belong to the
manufacturing department and should be counted as part of the manufacturing budget.
Utilities
Incurred utility expenses must be paid for a manufacturing facility. While this expense can vary
according to how much electricity and other energy is used, it is usually treated as a fixed cost a
facility incurs no matter what level of production is attained.
Supplies
A variety of supplies, besides raw materials, are necessary in manufacturing. These can include
order forms, office supplies and cartons or boxes. Because these supplies would not be necessary
without the manufacturing department, they are considered part of manufacturing overhead.
Taxes
The company must pay taxes on real estate, equipment, supplies and any other items that are
purchased and not resold. This expense is counted as manufacturing overhead.
Interest on Loans
A manufacturing company that has debt must pay interest. Interest payments add to the expense
of manufacturing and are a legitimate part of the calculations of manufacturing overhead.
MAY TABLE ULIT DITO TABLE 5 APPENDIX E
2.18 Production Cost
The following table shows the summarized production cost the company used in its
operations.
 SUMMARIZED MONTHLY PRODUCTION COST

Month Cost (Cost of Raw Materials+ Labor Cost)

July
₱12,391.31
August
₱13,157.60
September
₱15,784.88
October
₱19,287.92
November
₱23,666.72
December
₱29,468.63
January
₱29,468.63
February
₱37,022.06
March
₱59,572.88
April
₱76,102.85
May
₱97,668.44
June
₱125,583.29
TOTAL ₱539,175.21

For more comprehensive monthly production cost together with the labor cost, refer
to the Monthly Cost of Raw Materials Needed with Labor Costs table 6 in Appendix F.