Chapter III

TECHNICAL STUDY

This chapter covers the description of the service, and the ideal service

capacity. The visual representation of the plant location and layout is also

included in this chapter. Furthermore, the service capacity is tackled together

with the materials and labor with which the proposed business will operate with.

Objectives of the Study

The general objective of the chapter is to determine the technical

feasibility of the service through identifying the most effective and efficient

service process, the ideal service capacity, the best location and layout for the

proposed business, and the materials and direct labor requirements of the

business. Specifically, it attempts to discuss the following objectives:

1. to describe the nature of the service and its uses;

2. to illustrate the service process and describe the selling operation for the

service;

3. to determine the necessary equipment, facilities, materials, labor and

other requirements to assure the service is operational;

4. to determine the annual service capacity; and

5. to identify the appropriate location, size and layout for the business.

Service

An occasion is a special event or time in a year (Bragg, 2013), a favorable

opportunity to express one’s appreciation to a person by giving gifts. Sometimes,

 37

a person chooses to deliver the gifts in simple ways; others decide to add

sophistication in the delivery of their gifts. A common sophistication is in the form

of surprise. A surprise is an unexpected event or gift that a person performs for a

special person in his life (Bragg, 2013).

Description of the Service

People take time to plan and execute a surprise. Some of them have the

will to plan and perform a surprise, but do not have the time. They looked for a

service entity which can provide them with the goods and services needed for

this special gesture. In connection to this, the proponents came up with the idea

of providing a service that will give convenience to the consumers and save them

much time.

“Pick-a-Boo Celebrations” is a business entity that provides a variety of

gifts packages that come with add-on special services like special deliveries,

“harana” and surprise planning. The proposed business aims to help the target

market have easy access to various gifts in one shop, which normally will be

located in different areas in the city. Furthermore, delivery services will entail

each package which is a special feature of the proposed business.

The business offers five different packages. Each package has a unique

name and includes different gift items at a reasonable price. Package one or

“Happy Memory: Inspiration” Package includes a one stem medium-sized rose

and one 40g Goya chocolate. Package two or “Happy Memory: Love” package

includes three medium-sized red roses and one small teddy bear. Package three
 38

or “Happy Memory: Treasure” package includes a bouquet of six red roses and

one round large cake. Package four or “Happy Memory: Gratitude” package

includes a bouquet of twelve red roses, one large stuffed toy and three regular

balloons. Package five or “Happy Memory: Infinity” package includes eighteen

medium-sized red roses, eighteen regular balloons, eighteen cupcakes, one

large stuffed toy and one 3 x 4 tarpaulin. All of the packages include a free

personalized poem composed by the event planners.

During peak seasons like Valentine’s Day and Teachers’ Day, the gift

packages will be arranged beforehand and displayed so as to accommodate all

the customers during that day.

Add-on services are also offered by the business. These includes

classroom delivery, “harana”, surprise planning and other related service for a

reasonable price.

Uses of the Service

“Pick-a-Boo Celebrations” is considered a combination of a gift shop and

an events management center. It is a one-stop-gift shop established inside the

university for the benefit of both the university and the target market. Nowadays,

finding the right gifts become a burden not only because of the cost of the

products but also the location where the gifts will be found. The proposed

business can provide ease of access to different gifts arranged in packages that

suit the taste of the customer. During their free time, they can easily go the shop

and avail the products and services offered without leaving the university
 39

premises. With the services offered by the proposed business, it will help them

earn profit while consumers can definitely save time and effort. The proposed

business will answer the growing demand for one-stop-shops and special

delivery services.

Description of the Process

It is every firm’s objective to provide consumers with high quality product

and service that will surely satisfy them and earn profit in return. In order to

achieve this, one of the factors that need to be well-planned is the service

process.

The packages will be displayed on the provided shelves inside the shop.

The process will start with the customer deciding which package he will order

from those offered by the shop. He will then be asked by the service personnel

whether he will also avail any add-on services which are also offered. If the

customer doesn’t want to avail the said services, then he can proceed to pay for

his merchandise.

On the other hand, if the customer will avail any of the add-on services,

they will fill-up a service form which will ask the name of the customer and the

receiver of the package or gift, the date and time the service will be performed

and the scenario of the delivery and where it will be performed. The service

personnel will evaluate the form to make sure that the surprise delivery will not

interfere with any class schedule and school activity.

 40

After evaluating the form, the service personnel and the customer will

develop and smooth out the details of the plan. Until the customer is satisfied

with the plan, the service personnel will continue to brainstorm and coordinate all

the details with the customer.

When everything is set and the customer is satisfied, he may proceed to

the cashier and pay the price of the package together with the add-on service. A

receipt will be given to him as well as the service personnel’s contact number in

case he inquires about something.

At the date and time indicated in the form, the surprise will be performed

as planned or the package will be delivered to the place indicated in the form.

It should be noted that surprises which involve sophisticated details like a

large crowd, use of university premises and other similar scenarios, a minimum

of three to four school days should be allotted before the indicated time and date.

This is also true with the acquisition of Package 5.

A record of all deliveries and events should be kept for future references

and for improvement purposes.

Figure 3.1 shows the general process flowchart of the business while

figures 3.2 – 3.7 shows the service blueprint of each package and for the add-on

services
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Order (1 minute)

Prepare packages. (5-7 minutes)

The organizers will plan the surprise. (10-

15 minutes)

No

Is the customer
satisfied with the
plan?

Yes

Payment (1 minute)

Performance of the availed service

(10-15 minutes)

End

Figure 3.1
 42

General Service Process Flowchart

Figure 3.2
Service Blueprint of Package 1
 43

“Happy Memory: Inspiration”

 44

Figure 3.3
Service Blueprint of Package 2
“Happy Memory: Love”
 45

Figure 3.4
Service Blueprint of Package 3
“Happy Memory: Treasure”
 46

Figure 3.5
Service Blueprint of Package 4
“Happy Memory: Gratitude”
 47

Figure 3.6
Service Blueprint of Package 5
“Happy Memory: Infinity”
 48

Customer avails add-one services

Reschedule date/time of the service as

Fill-out the service form (2 minutes)
approved by the customer (2-3 minutes)

Evaluate the service form (5-7 minutes)

Yes

Do the specifics of the

form interfere with
school activities?

No

Payment (1 minute) Performance of the service (10-15 minutes)

Figure 3.7
Add-on Services Process Flowchart

Capacity Schedule

Capacity is the upper limit of the number of output a manufacturing

process can produce (Stevenson, 2014). A capacity schedule or likewise referred

to as capacity planning is the process of determining the production or service

capacity that will efficiently and effectively meet the changing demands for its

products and services (Bragg, 2013).

There are many factors to consider before the ideal capacity could be

done. One of the factors that need to be considered is the proximity of the

location to the customers. The proposed business will be established inside the

university where the target market is located.

Another factor to be considered is the inability to store service of the

entity. The speed of the delivery or the customers waiting time is a major concern
 49

in the capacity planning. An allowance of 10 minutes before the indicated time of

delivery will be allotted to assure that the delivery will be on time. For the

performance of a surprise request, a preparation time of one hour will be allotted

before the indicated time of performance. For the customers waiting time, three -

five minutes will be allotted for each transaction. If the customer avails a

package, a maximum of five to seven minutes will be allotted for the preparation

of the package (adding of ribbons, gift wrapping etc.) and for the transaction.

Demand volatility is another factor that needs to be considered in the

service capacity planning. Demand volatility is the rate of change in demand at a

given period of time (Definitions on Equity and Economics, 2015). The demand

for products and services of the proposed business, based on current trend in the

market, is considered stable. Peak seasons will be on special holidays. Since the

business is new in the target location, the data to get the demand will come from

the questionnaires.

Going to the operation of the service, there will be six (6) working days per

week with eight (8) working hours per day subject to overtime. Table 3.1 shows the

capacity schedule of the business for each firm.

Table 3.1
Daily Capacity Schedule
2017 2018 2019 2020 2021
Package 1 12 13 14 15 16
Package 2 9 11 12 13 14
Package 3 11 12 13 14 15
Package 4 4 4 5 6 7
Package 5 4 4 5 6 7
 50

Table 3.2
Monthly Capacity Schedule
2017 2018 2019 2020 2021
Package 1 300 328 355 382 410
Package 2 246 273 300 328 355
Package 3 273 300 328 355 382
Package 4 109 109 137 164 191
Package 5 109 109 137 164 191

Table 3.3
Annual Capacity Schedule
2017 2018 2019 2020 2021
Package 1 3,604 3,931 4,259 4,586 4,914
Package 2 2,948 3,276 3,604 3,931 4,259
Package 3 3,276 3,604 3,931 4,259 4,586
Package 4 1,310 1,310 1,638 1,966 2,293
Package 5 1,310 1,310 1,638 1,966 2,293

Service Location

The proposed business will be established inside Batangas State

University Main Campus I. After consulting with the special projects management

office, the proponents acquired the existing vicinity map of the university and the

proposed projects vicinity map. The proponents have chosen, as their ideal

service location, the approved 5-floors commercial building that the university will

construct. This is located near the main gate of Batangas State University Main

Campus I in Rizal Avenue Extension. The proposed business will occupy a

portion of the ground floor area of the building.

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Figure 3.8
Location of Proposed 5-Storey Commercial Bldg.

Service Establishment Layout

The layout of the proposed business is designed to assure effective space

utilization and smooth work flow throughout the service establishment. It also

assures safe and conducive working area for the personnel with proper sanitation

and flexible arrangement.

For effective space utilization, a display shelf incorporated in the wall of

the infrastructure will be constructed for the convenience of the consumers. A 3-

bucket flower stand will also be displayed. For smooth work flow, the counter and

work area will be in close proximity with each other so as to allow easy access

for the service personnel for the orders of the consumers. The work area will be

connected to the cold storage and the dry storage area where the merchandise
 52

are stored. This is also for easy access of the service personnel. A trash bin will

be present for the waste and scraps of the operations of the entity.

The layout size will be 20 sq. meters. According to the special projects

office, the lease fee for the proposed 5-storey building is Php1,000 per sq

meters. With that information, the lease fee will be Php20,000 a month.

Figure 3.9
Service Location Floor Plan
 53

Service Equipment

The proponents consider these equipment to synchronize the service

process. It includes a refrigerator to preserve the cakes and other small goodies

for the customers and a printer for the special messages and necessary hard

copies in planning an event.

Table 3.4
Service Equipment

Description Quantity Unit Cost Total Cost

Double Glass 1pc Php50,000.00 Php50,000.00
Door Showcase
Chillers
Laptop 1pc 14,695.00 14,695.00
Printer 1pc 5,000.00 5,000.00
Total Php69,695.00
Source: SM Home Appliances

Double Glass Door Showcase Chillers. This refers to a double glass

door machine for cooling products, like a cold cabinet or refrigerator for keeping

stored food a few degrees above freezing. It is a 22 cu.ft. upright chiller with fan

and 7-level Electronic temperature control. Dimensions are: height, 78 inches;

width, 46.5; and depth, 23 inches. It requires 210 W input power.

Service Furniture and Fixtures

The firm needs the following items in organizing the materials and

products offered to satisfy a package for such event or gift. Furniture and

furnishings play an essential role in the use and operation of buildings. In

 54

addition to contributing to how users perceive and feel about a building, they are

often necessary to achieve the functional requirements programmed for interior

spaces. (Brenner, 2010)

Table 3.5
Service Furniture and Fixtures

Description Quantity Unit Cost Total Cost

Round Stool 3 pcs Php274.75 Php824.25
Marble
Glass Top Long 1pc 2,300.00 2,300.00
Table
3- Bucket Flower 1pc 2,300.00 2,300.00
Stand
Cake Vertical 1pc 12,000.00 12,000
Display
White Board 1pc 360.00 360.00
Total Php17,784.25
Source: National Bookstore, OLX.com

Cake Vertical Display. This is a vertical shelf with a built in chiller. It is

use as a display of cakes for customers’ selection and satisfaction. It requires

200 W of input power and has a cake capacity of six cakes (if petite) and three

cakes (if large)

Service Tools and Supplies

It's very important for today's draftsmen to use the highest quality drafting

supplies when working on a new project. Using the correct drafting supplies will

improve the overall success of your drafting project and save you a lot of

valuable time (Souders, 2010). In order to perform the different process of the

business, the proponents assured the following supplies are available so they will

be efficient enough throughout the event planning services.

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Table 3.6
Service Tools and Supplies

Description Quantity Unit Cost Total Cost

Heavy Duty Paper 1pc Php950.00 Php950.00
Cutter
Electronic 1pc 1160.00 1160.00
Calculator
Stationary 1pc 582.00 582.00
Organizer (Desk
Tray)
Bond Paper 3 reams 195.00 585.00
Stick-on Notepad 10 pads 26.00 260.00
Stapler Set 5 sets 130.25 651.25
Staple Wires 30 boxes 6.00 180.00
Cutter 12 pcs 8.75 105.00
Puncher 4 pcs 64.75 259.00
Tape Dispenser 3 pcs 172.50 517.50
Tape 50 pcs 21.00 1050.00
Scissors 5 pcs 84.75 423.75
Ball pen 60 pcs 5.25 315.00
Marker Set 10 pcs 100.00 1000.00
Glue Gun 10 pcs 179.00 1790.00
Glue Sticks 10 packs 125.00 1250.00
(100pcs/pack)
5-Outlet 6-ft. 2 sets 449.75 899.50
Extension Cord
Total Php11,978.00
Source: National Bookstore

Maintenance Supplies

To observe cleanliness and orderliness inside the firms’ premises, the

proponents intend to have the following items. The main purpose of regular

maintenance is to ensure that all equipment required for production is operating

at 100% efficiency at all times(Krar, 2010).

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Table 3.7
Maintenance Supplies

Description Quantity Unit Cost Total Cost

Fire Extinguisher 1pc Php1,149.75 Php1,149.75
Rugs 10 pcs 5.00 50.00
Broom 3 pcs 60.00 180.00
Dust Pan 1pc 31.00 31.00
Garbage Bag 3 packs (22 66.00 198.00
pcs/pack)
Trash Bin 3 pcs 94.00 282.00
Total Php1,890.75
Source: DIY Shop, Saveway

Office Furniture and Fixtures

The following fixtures will give a classy ambiance and better client

services. Furniture, furnishings, and equipment are a significant part of most

commercial and institutional building projects. By selecting, specifying, and

sometimes managing FF&E acquisition, architects can provide their clients with a

more comprehensive set of services. (Brenner, 2010)

Table 3.8
Office Furniture and Fixtures

Description Quantity Unit Cost Total Cost

Round Stool 3 pcs Php274.75 Php824.25
Marble
Table 1pc 2,300 2,300.00
Desk Fan 1pc 855.00 855.00
Caha de Oro Vista 1pc 2,295.00 2,295.00
A/V Cabinet
Total Php6,274.25
Source: DIY Shop, National Bookstore
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Office Supplies

For purposes of defining “Office Supply” (or “Office Supplies”) as it relates

to procurement, the meaning is understood to be a consumable item/product

used regularly in an office environment to perform departmental personnel’s daily

work assignments.

Table 3.9
Office Supplies

Description Quantity Unit Cost Total Cost

Record Book 6 pcs 88.00 Php528.00
Ball pen 15 pcs 5.25 78.75
Stapler Set 1 set 130.25 130.25
Staple Wires 10 boxes 6.00 60.00
Tape 2 pcs 21.00 42.00
Total Php839.00
Source: National Bookstore

Direct Materials

In accounting, direct materials are the resources used to make a product.

These resources must be clearly linked to the product being produced. Direct

material costs are one of the costs associated with producing a product

(Wilkinson, 2013). However, in connection to our proposed service, they are

intended to be part of our different sets of packages in order to satisfy the desires

of our clients.

These are tangible resources that will be used in the business and are

intended for sale

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Table 3.10
Direct Materials

Description Quantity Unit Cost Total Cost

Roses (One Stem) 3,604 pcs Php 18.00 Php64,864.80
Roses (3’s) 2,948 pcs 150.00 442,260.00
Roses (6’s) 3,276 pcs 250.00 819,000.00
Roses (12’s) 1,310 pcs 500.00 655,200.00
Roses (18’s) 1,310 pcs 325.00 425,880.00
Cake (8 x 12 500.00 90,090.00
round) 3,604 pcs
Chocolate (40g) 3,276 pcs 25.00 1,638,000.00
Stuffed Toys
Small (3 x 4 sq 50.00 147,420.00
inch) 2,948 pcs
Large (4 x 3 sq 500.00 1,310,400.00
meter) 2,621 pcs
Cupcakes 23,587 pcs 30.00 707,616.00
Balloons (regular) 27,518 pcs 17.00 467,812.80
Tarpaulin (3x4) 1,310 pcs 300.00 393,120.00
Total Php7,161,663.60
Source: Goldilocks, Divisoria, National Bookstore, Dangwa Flower Market

Roses (red medium-sized). It is a type of flower commonly chosen as a

gift for special occasions. The roses that the firm will use are medium-sized red

roses.

Cake (8 x 4 round).It is a kind of pastry which is commonly baked and

flourished with elegant icing designs. The cakes that the firm will be using are

cakes supplied by Goldilocks and Anne’s Home of Cakes and Pastries. The

cakes that will be available are circular cakes in large sizes.

Chocolates (40g). A kind of dessert loved by many made from cocoa and

milk. The chocolates that the firm will use are Goya milk-chocolate 40g. This will

be purchased by the firm in Supermarkerts like SM Hypermart and Citimart.

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Stuffed Toys. They are toys made of wool and cotton commonly

designed as cute animals or cartoon characters. The stuffed toys that the firm will

use will be purchases at Divisoria, of small and large sizes.

Cupcakes. It is a type of pastry that looks like a cake, but a very small

one. The cupcakes that the firm will use are to be supplied by Anne’s Home of

Cakes and Pastries.

Balloons. These are usual party accessories that are inflated. The

balloons to be used are of different colors with the service personnel designing

the balloons.

Tarpaulin (3x4 sq meter). This is a kind of banner made from

synthesized material and used to post advertisements in cities. They are often

used in different celebrations where the details are often placed. The firm will be

the one designing the tarpaulins to be used. It will be printed in specialized

printers from outside business firms who offer tarpaulin printing.

Indirect Materials

These are tangible materials used in the production process but which

cannot be linked to a specific product or job. Alternatively, they may be used in

such insubstantial quantities on a pre-product basis that is not worthwhile to track

them as direct materials. Thus, they are consumed as part of the production

process, but are not integrated in substantial amounts into a product or job.

(Bragg, 2013)
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Table 3.11
Indirect Materials

Description Quantity Unit Cost Total Cost

Glue 24 (125 ml/bottle) 28.75 Php690.00
Double-sided 36 rolls (30 m/roll) 130.25 4,689.00
Tape
Plastic Wrapper 3,120 sq. m 1.00 3,120.00
Gift Wrapper 1,560 sheets 0.70 1,092.00
Ribbons 36 rolls (45 m/roll) 100.00 3,600.00
AbakaSinamay 936 sq. m 20.00 18,720.00
Staple Wire 12 boxes (1,000 6.00 72.00
pcs/box)
Candles 22,464 pcs 2.5 56,160.00
Colored Papers 312 packs (25 38.00 11,856.00
pcs/pack)
Specialty Papers 312 packs (10 38.00 11,856.00
pcs/pack)
Cartolina 936 sheets 7.50 7,020.00
Envelopes 1,560 pcs 2.65 4,134.00
Total Php123,009.00
Source: National Bookstore, Divisoria, Bobzen’s Flower Shop

Abaka/Sinamay. This is a lustrous, loosely woven fabric made from

abaca fibers, used especially in making ribbons, baskets and hats.

Candles. Small wax sticks used with cakes. The candles to be used will

be the number candle and the small party candles.

Colored Papers. These are papers formulated with color used as a

designing tool. The firm will be using colored papers of varying colors in

packages, surprise plans and deliveries. One pack of colored papers includes 10

assorted colors.

Specialty Papers. These are colored papers with different scents

formulated on it. The firm will use specialty papers as stationaries for letters that

the customers want to include in their packages and delivery.

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Cartolina. It is a type of colored paper of larger size, usually of 2.5 feet in

width and 2 feet in height. The firm will be using varying colors of cartolina for

banners that will be requested in surprise plans of the customers.

Envelopes. This will be used together with the specialty papers for letters

of customers for their recipients. Seven by Seven inches is the size of the largest

envelope to be used.

Lease and Leasehold Improvements

The firm will lease a space which will serve as their operation site. The

space is located at Batangas State University Main I. Operating lease should last

for five years and would be renewed depending on the agreement of the partners

and the lessor. A monthly rental fee will be accounted as rent expense.

Certain improvements will be made to the property to make it ready for its

intended use. If a lessee makes a modification to its existing structure that cost

represent an asset just like any other capital expenditure. Like any other assets,

its cost is allocated as depreciation expense over its useful life to the lessee,

which will be the shorter of the physical life of the asset on the lease term. The

company decided to build dividers to different areas such as display area, waiting

area, dry and cold storages. Installation of ceiling fans and lighting fixtures will

also be occurred. They will hire a contractor who will be responsible for the labor

and materials. These improvements will be amortized over the life of the lease

which is five years.

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Table 3.12
Leasehold Improvements

Description Amount
Lights 749.25
Ceiling Fans 3,506.00
Wall Display Shelf 4,000.00
Labor 2,000.00
Total 10,255.25
Source: DIY Shop

Utilities

Utilities include the electricity consumption, water usage and landline

consumption for the efficient and effective business operation of the entity.

Table 3.13
Utilities Expense

Description Monthly Consumption Annual Consumption

Electricity PhP 1,200.00 PhP16, 400.00*
Water 420.00 5, 040.00
Telephone** 899.00 10,788.00
Total 2,519.00 PhP32,228.00
*Php 14,400.00 + Php 2,000.00 expense for meter installation
**The telecommunication company offers landline service with internet
connection

Waste Disposal

The firm aims to fully utilize its resources because they support zero waste

management and they want to control the proper disposal of waste. Proper

segregation of waste is necessary to maintain cleanliness within the planned site

and to avoid damages to the environment.

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The business will have a small amount of waste to be disposed every day.

They will sort the waste materials according to its kind and will put it in a trash

bag.

For the biodegradable wastes, the firm will utilize these wastes as

compost for the community to use. Coordination with the local government upon

the ideal place for a compost pit in the city will be done.

Direct Labor Requirements

One of the major factors in the productivity of a company is the efficiency

and effectiveness of their employees. The accomplishment of the business event

also depends on the loyalty and how well the employees perform their jobs.

Since it only requires management and arrangement of events, there’s no

need of a high number of employees in the service process. Five employees will

be hired with their respective assignments as event planners, packagers and

cashier that are responsible to the transactions in terms of plans, deliveries and

payments respectively. There will be two event planners, two packagers, one

cashier and one general manager. Each employee must complete the eight (8)

hours of work per day from Monday-Saturday, from 8:00 a.m. to 5:00 p.m.,

subject to overtime. This includes 1 hour lunch break from 12:00 to 1:00 p.m. The

event organizers and packagers will receive Php350 per day, while the cashier

will receive Php300.00 per day. The general manager will receive Php800 per

day. They should be well-trained and specific tasks will be assigned soon as

further details are discussed.

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During peak seasons where orders of the different packages will be many,

additional helpers will be hired during special occasions like Valentine’s Day and

Teachers’ Day. The part-time helpers will also be paid Php350 per day.

Generalization

The overall objective of the chapter is to determine the technical feasibility

of the service through identifying the most effective and efficient service process,

the ideal service capacity, the best location and layout for the proposed business,

and the materials and direct labor requirements of the business. The said

business is considered a combination of a gift shop and an events management

center which will provide variety of gifts arranged in five different packages that

may come with a special add-on services specified by the customer to satisfy his

needs. It is a one-stop-gift shop established inside the university for the benefit of

both the university and the target market.

A well-planned service process was described in this study which will start

when the customer decides to avail a preset package or a single item in the

store. Service blueprints for each package and for the add-on service are

provided to illustrate the planned service process for better understandability. A

list of all equipment, materials, labor, and other requirements that will make the

business operational were presented in a tabular form together with their

respective prices. Three factors were considered in planning the capacity

schedule, such as: proximity of the location of the customers, the inability to store

service, and the demand volatility of the service. As for the operations of the
 65

service, there will be six (6) working days per week with eight (8) working hours

per day subject to overtime.

The proponents plan to occupy a space in the ground floor of the

approved 5-floor commercial building that the university will construct. The layout

size will be 20 sq. meters.