Feasibility Study For Samal Housing Project

Title Page
THE FEASIBILITY AND VIABILITY OF PUTTING-UP HOUSING PROJECT

AT BARANGAY LIBUAK, BABAK DISTRICT, ISLAND GARDEN CITY OF
SAMAL
A Feasibility Study Presented by Anthropos Realty INC.
____________________________________________
In Partial Fulfillment of the Requirements for the Reclassification of land area
____________________________________________
October 2019
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METHODOLOGY
The researchers used both the primary and secondary data in working for this
project.
Primary data was gathered through personal interviews with the existing property
developer.
The secondary data was derived from the information in the internet.
SUMMARY
This feasibility study focused on the feasibility and viability of putting-up housing
project at Barangay Libuak, Babak District, Island Garden City of Samal with the total
consideration of the marketing, technical, organization and management, and also the
financial aspect of the project.
Marketing. To determine the demand, the researchers conducted a survey of the target
market. The result concluded that 94.24% of the semestral period population are willing to
patronize the service while 96.15% of the summer population are willing to patronize the
service.
Technical Study. This study focused on business operation. It included
equipment, supplies and other expenses necessary for the business. The proposed project
will be located at South Philippine Adventist College – campus.
Organization and Management Study. The proposed business will operate
under the operations of South Philippine Adventist College. The venture shall have three
workers. It is composed of a store supervisor and two “vendo” workers. The store
supervisor will be responsible to train, give instructions, oversee the work and
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performance of subordinates, and will be in charge in making sure that there is great
customer service.
Financial Study. The initial investment for the proposed project amounts to
P1,125,598.81, which is needed for the business to be established. Every year the
proposed project will earn a profit.
Socio Economic Study. The business will not operate to gain profit alone, but it
will offer opportunity to help customers, church, and employees.
CONCLUSION
Based on the study conducted, the researchers concluded that the proposed project
on the Feasibility and Viability of Putting-Up Vending Machines at South Philippine
Adventist College - campus is feasible and viable.
RECOMMENDATION
The researchers recommend that the proposed project “The Feasibility and
Viability of Putting-Up Vending Machines at South Philippine Adventist College -
Campus” will be put into realization as soon as possible from the time of accomplishment
of this study to minimize the changes of the data that may occur due to delay of
implementation.
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Table of Contents
Page
TITLE PAGE........................................................................................................................i
APPROVAL SHEET...........................................................................................................ii
FEASIBILITY ABSTRACT..............................................................................................iii
DEDICATION....................................................................................................................vi
ACKNOWLEDGEMENT.................................................................................................vii
TABLE OF CONTENTS...................................................................................................ix
LIST OF TABLE...............................................................................................................xii
LIST OF EXHIBITS........................................................................................................xiv
LIST OF FIGURES...........................................................................................................xv
LIST OF APPENDICES..................................................................................................xvi
CHAPTERS
1 INTRODUCTION..........................................................................................................1
Brief History of the Project..............................................................................................1
Statement of the problem.................................................................................................2
Objectives of the Study....................................................................................................2
Significance of the Study.................................................................................................4
Scope and Limitations......................................................................................................4
Methodology....................................................................................................................5
Sources of Data............................................................................................................5
Research Design...........................................................................................................5
Treatment of Data.........................................................................................................7
Review of Related Literature...........................................................................................9
Definition of Terms........................................................................................................14
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2 MARKETING STUDY................................................................................................23
Product Description........................................................................................................23
Industry Profile..............................................................................................................24
SWOT Analysis.............................................................................................................25
Demand Analysis...........................................................................................................27
Supply Analysis.............................................................................................................32
Demand and Supply Analysis........................................................................................34
Marketing Plans.............................................................................................................36
Product........................................................................................................................36
Promotion...................................................................................................................36
Pricing........................................................................................................................37
Place...........................................................................................................................38
People.........................................................................................................................38
Physical Environment.................................................................................................38
3 TECHNICAL STUDY..................................................................................................59
Production Process/Process Flow..................................................................................59
Equipment......................................................................................................................61
Location.........................................................................................................................63
Layout............................................................................................................................63
Capacity/Scheduling......................................................................................................64
Purchase Cost.................................................................................................................66
Waste Disposal...............................................................................................................67
Utilities and Other Operating Cost.................................................................................67
4 ORGANIZATION AND MANAGEMENT STUDY.................................................76
Forms of Business Organization....................................................................................76
Organizational Structure................................................................................................76
Personnel Requirement..................................................................................................78
Qualification Standards..................................................................................................78
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Compensation Package..................................................................................................79
Projected Timetable.......................................................................................................80
5 FINANCIAL STATEMENTS.....................................................................................83
Major Assumptions........................................................................................................83
Capital Requirement/Investment....................................................................................86
Source of Financing.......................................................................................................87
Preparation of the Financial Statement..........................................................................87
Financial Analysis..........................................................................................................90
6 SOCIO-ECONOMIC DESIRABILTY.......................................................................95
Consumers/community/society......................................................................................95
Employees......................................................................................................................96
Creditors/Suppliers.........................................................................................................96
Owner.............................................................................................................................96
7 FINDINGS, CONCLUSION AND RECOMMENDATION....................................98
Findings..........................................................................................................................98
Conclusion...................................................................................................................100
Recommendation.........................................................................................................101
REFERENCES................................................................................................................102
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LIST OF TABLE
Table Page
1 Number of Questionnaires to be distributed – For Semestral Data..................................6
2 Number of Questionnaires to be Distributed - For Summer data.....................................7
3 SWOT Analysis Matrix..................................................................................................26
4 Historical Population – SPAC Students and Faculty 2014-2018 (Semestral)................27
5 Projected Population – SPAC Students & Faculty Members 2020-2021 (Semestral)...28
6 Historical Population – SPAC Students and Faculty 2014-2018 (Summer)..................28
7 Projected Population – SPAC Students and Faculty 2020-2024 (Summer)...................29
8 Projected Annual Demand..............................................................................................31
9 Projected Annual Supply................................................................................................32
10 Demand and Supply Analysis.......................................................................................34
11 Equipment and Annual Depreciation............................................................................62
12 Capacity of the Business...............................................................................................65
13 Schedule of Business Operation...................................................................................65
14 Purchase cost of the Business –Year 1.........................................................................66
15 Projected Purchase Cost per unit..................................................................................67
16 Utilities Expense...........................................................................................................68
17 Supplies Expense..........................................................................................................69
18 Pricing system of the business......................................................................................70
19Personnel Requirement..................................................................................................78
20 Employees’ Qualifications............................................................................................78
21Annual Salaries and Benefits.........................................................................................79
22 Business Research........................................................................................................80
23 Ending inventory..........................................................................................................84
24 Capital Requirement of the Proposed business............................................................86
25 Income Statement.........................................................................................................88
26 Statement of Cash Flow................................................................................................89
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27 Balance Sheet................................................................................................................90
28 Return on Sales.............................................................................................................91
29 Return on Investment....................................................................................................91
30 Gross Profit Ratio.........................................................................................................92
31 Payback Period.............................................................................................................92
32 Net Present Value.........................................................................................................93
33 Internal Rate of Return.................................................................................................94
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LIST OF EXHIBITS
Exhibit Page
1 Unstructured Interview for Existing Business................................................................16
2 Unstructured Interview for SPAC Store.........................................................................18
3 Survey Questionnaire......................................................................................................19
4Tally Sheet of Survey Questionnaire for 1st sem and 2nd sem.......................................41
5 Tally Sheet of Survey Questionnaire for Summer..........................................................48
6 Result of the SPAC Store Interview...............................................................................55
7 Result of the Existing Business Interview......................................................................56
8 Equipment and Supplies.................................................................................................71
9 Location Map..................................................................................................................73
10 Location of Vendo........................................................................................................74
11 Lay-out..........................................................................................................................75
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LIST OF FIGURES
Figures Page
1 Sample picture of proposed vending machine................................................................24
2 Picture of proposed vending machine products..............................................................24
3 Picture of the Plastic Bottles Tin Cans Container..........................................................39
4 Production Process of the Proposed Business................................................................61
5 Organizational chart of the proposed business...............................................................77
6 Gannt Chart of the Proposed Business...........................................................................82
7 Movement of Income......................................................................................................88
8 Movement of Cash..........................................................................................................89
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CHAPTER 1
INTRODUCTION
Brief History of the Project
In the Philippines, where heat is all year round, staying hydrated may be
considered as a top priority. The technique to staying hydrated is by being alert with the
needs of the body. If a person feels thirsty, he or she needs to go and drink. Likewise
goes if the mouth or skin of a person is becoming a bit dry. A person needs to drink as
well if he or she is feeling too stressed out or having a hard time thinking and
concentrating (Rappler.com, 2019).
To help the students and faculty members of South Philippine Adventist College
(SPAC) to stay hydrated, the researchers decided to conduct a study of putting-up drink
vending machines inside the said campus. These vending machines will serve as an outlet
of the SPAC store in distributing drinks to the consumers.
Vending machines are machinations that can dispense a variety of items, which
includes but are not limited to: sweets, chocolate, fruit, nuts, soft drink, water, tea, coffee,
and more. All a customer has to do is insert money, type in the code to their chosen item,
and then enjoy as the machine dispenses it to them (Coinadrink Ltd., 2014).
In this study, the products to be sold through the proposed vending machines
would be soy milk, calamansi juice, Dutch Mill, Chuckie and Quenching Dew (QD)
Water. The products to be sold are the first five highest number of products that the
students wanted to buy from vending machines based on a preliminary survey conducted
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by the researchers during Tinubdan of the school year 2018-2019 with a total respondent
of 100 students.
One of the researchers previously attended a school that has such services, namely
the University of Mindanao - Matina Campus, where there are vending machines for
drinks. The researchers see this opportunity as a possible avenue of profit for SPAC.
Aside from that, it would help the school attract possible enrollees with the image that the
school is not outdated in terms of high technology machines. This service can also be a
medium of advertising to the school by including pictures of it in the flyers and tarpaulin.
To relate, this research is constructed to determine the feasibility and viability of
putting-up vending machines at South Philippine Adventist College (SPAC) campus and
the name of the project is SPAC Vendo. The proposed target market is composed of the
students and faculty members of SPAC. The proposed business would be financed by the
said school.
Statement of the problem
The study aims to determine the feasibility and viability of putting-up vending
machines inside South Philippine Adventist College campus.
Objectives of the Study
The main objective of this study is to determine the feasibility of the proposed
project. Particularly, the four functional areas of management are tackled from the
following points of view:
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Marketing
1. To determine the current demand and supply of the service provided by the
vending machines through the different products it dispenses;
2. To formulate marketing strategies necessary for the success of the proposed
business;
3. To investigate the future potential of the business concerned;
4. To create the SWOT analysis for the business.
Technical
1. To determine the most preferred type of goods that consumers are willing to
purchase;
2. To determine the location, size, layout and design of the vending machines;
3. To determine the operational/technical requirements in the establishment of a
vending machine business;
4. To know the overall capacity of the proposed vending machine business.
Organization and Management
1. To determine the most appropriate form of business organization suited for
the project;
2. To determine the required number of people to manage and operate the
proposed project successfully;
3. To determine qualifications of personnel that manage the business;
4. To measure short term and long-term solvency position of the business
organization.
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Financial
1. To determine the amount of capital needed to put up vending machines in
chosen location;
2. To estimate the financial returns of the business for 5 years;
3. To examine and determine profitability and efficiency of the proposed
business;
Significance of the Study
The output of the study is significant to the following individuals and groups.
Consumers. The output of the conducted study will supply vital information,
knowledge and insight to possible customers, student and faculty members alike, in
finding ways on how to obtain drink items that are easily available.
Future Researchers. These refer to people who will conduct studies similar to
this research. This study may serve as a point of reference that will give insight on the
feasibility and viability of putting-up vending machine inside South Philippine Adventist
College Campus.
Readers. This would help the readers in developing their knowledge on making a
research about putting-up vending machines.
Working Students. This will give another working opportunity.
Proponents. This study will not only help them in fulfilling their course
requirements but also in preparing themselves to be exposed to the actual business world.
Scope and Limitations
The focus of this study is the feasibility and viability of putting-up vending
machines inside South Philippine Adventist College campus. The proposed target market
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are the students and faculty members of SPAC. This covers research in marketing,
technical, organizational and management, and financial study. The study covers only a
five-year projection, from 2020-2024.
The proposed products in this study are limited because of the difficulties of
doing computations for a feasibility study of a business with many products. That is why
the researchers conducted a preliminary survey with a total of 100 respondents to
determine the products to be sold by the vending machines. The first five highest are the
official products of the venture which are the soya milk, calamansi juice, Dutch Mill,
Chuckie, and QD Water. Due, as well, to the limited time in conducting the study, the
respondents of this study is selected based on a sample from the number of students and
faculty members of SPAC. This may influence the reliability of this study.
Methodology
This section discusses the three elements of research methodology: the sources of
data, research design and treatment of data. The gathering of data was done through the
following procedures.
Sources of Data. The researchers used both the primary and secondary sources of
data. Primary data are the firsthand information which was gathered directly by the
researchers from students and faculty members of South Philippine Adventist College
and existing vending machine business owners in Davao City while Secondary data was
gathered through internet, related articles and books.
Research Design. A descriptive method was employed in this research study to
determine the feasibility and viability of putting – up vending machines inside South
Philippine Adventist College campus.
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The proponents used the most recent and complete total number of the students
and faculty members of South Philippine Adventist College, semester and summer terms
separately, as the population of the target market.
The proponents were required to use a 5% margin of error in determining the
sample size. To determine the semestral sample size (June to October and November to
March), the researchers computed the sample size as presented.
n= N = 1,196 = 1,196
1+Ne2 1+1,196(0.05)2 3.99
n = 300
Where: n= sample size
N= estimated population
e = margin of error (expressed in percentage)
Table 1
1Number of Questionnaires to be distributed – For Semestral Data

Category Population Percentage Sample Size
Junior Academy Students 351 29 87
Senior Academy Students 305 26 78
College Students (Average) 453 38 114
Faculty Members (Average) 87 7 21
Total 1,196 300
Source: Appendix 1 & Appendix 2
The sample size for this data is 300. This was distributed proportionately among
the academic levels as presented in the table above.
To determine the sample size for the summer data, the researchers computed the
sample size as presented.
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n= N = 282 = 282
1+Ne2 1+282(0.05)2 1.705
n = 165
Where: n= sample size
N= estimated population
e = margin of error (expressed in percentage)
Table 2
2Number of Questionnaires to be Distributed - For Summer data

Category Population Percentage Sample Size
College Students 194 69 114
Faculty Members 88 31 51
Total 282 165
Source: Appendix 1 & Appendix 2
The sample size for the data of summer is 165. This was distributed
proportionately among college students and faculty members as presented in the table
above.
Treatment of Data. The researchers used manual or personal method of
tabulating and analyzing all the quantitative data extracted from the survey
questionnaires.
To show how viable the project is in terms of financial soundness, the following
ratios and formulas was used. Computations were done through the use of ratios which
determine the profitability, liquidity, solvency and over-all financial viability of the
business venture such as:
Profitability Ratios. These ratios measure the earning ability of a company. It will
help the financers and managers to evaluate whether the funds invested are being used
efficiently or not (Mowen, Hansen, & Heitger, 2017).
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Return on Investment. It is the ratio of operating income to average operating
assets. (Mowen et al, 2017).
ROI = Operating Income / Total Investment
Return on Sales. The ratio shows the profit margin on sales and the efficiency of
the firm. It represents the percentage of each sales that is left over as net income after all
expenses is subtracted (Mowen et al, 2017).
Return on Sales = Net Income / Sales
Gross Profit Ratio. It calculates the percentage of sales that exceed the cost of
goods sold. It shows how a company can buy and sell products efficiently
(MyAccountingCourse.com, 2019).
Gross Profit Ratio = (Total Sales – Cost of Goods Sold) / Net Sales
Liquidity Ratio. The short-term debt-paying capability of a company (Mowen et
al, 2017).
Current Ratio. This ratio provides a direct measure of the ability of meeting the
short-term obligations of a company (Mowen et al, 2017).
Current Ratio = Current Assets / Current Liabilities
Quick Ratio. It endows the liquidity of the company that compares only the most
liquid assets with current liabilities. Non-liquid assets like inventories are excluded in the
said ratio. Therefore, the numerator of the quick ratio normally incudes cash, marketable
securities, and accounts receivable (Mowen et al, 2017).
Quick Ratio = (Cash + Marketable Securities + Accounts Receivable) /
Current Liabilities
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Capital Budgeting. This concerns measures that a business uses to determine and
evaluate potential large expenses or investments (Mowen et al, 2017).
Internal Rate of Return. The interest rate that sets the present value of the cash
inflows of a project equal to the present value of the cost of a project. It is the interest rate
that sets the project’s NPV at zero (Mowen et al, 2017).
I = ∑ [ CF1 / (1+i)ᵗ ]
Net Present Value. It is the present value of future cash flows minus the outflows.
It measures the profitability of an investment (Mowen et al, 2017).
NPV = P – I
Payback Period. This refers to the length of period or number of years required
for a firm to recover its original investment (Mowen et al, 2017).
Payback Period = Original Investment / Annual Cash Flow.
Review of Related Literature
The human body depends on water to survive. The human body will lose water
through breath, perspiration, urine and bowel movements. That is why every person is
required to drink water usually at least 8-ounce glasses of water to stay hydrated.
However, a person does not need to rely on water for its fluid needs. There are other
sources of fluids that contain mostly water such as milk, juice and herbal teas (Mayo
Clinic Staff, 2017).
Drink vending machines are a must in the busy lifestyles of today. They are the
first thing people turn to when they are trying to keep a schedule, but do not have time to
stop somewhere to find the drink they need. Good locations for drink vending machines
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are usually areas where people are looking for that quick pick me up (Vending.com LLC,
2018).
What is a vending machine? According to Nakate (2018), a vending machine is a
device used for selling consumer items, mostly edibles where people do not need to go to
the cashier at the counter and pay.
The earliest “vendo” machine was a device that is administering holy water
consequently from coins inside Egyptian temples. Although, the vending machine was
visualized in 215 B.C, 1880 was the time when it was in the business world. Earliest of
these machines were utilized to carry out post cards in London. Along with that time,
Richard Carlisle, a publisher as well as a bookshop owner, thought that a vending
machine could also dispense books (Verma, 2012).
In further progress, New York became the first city in United States to get
vending machines for offering gum all over the metro. In 1897, slot machines and pin
ball machines were in a boom. Because of the vitality of these machines with animated
figures and progressions, gumball machines were invented. Eventually in 1961, canned
pop vending machines entered the business as well. After that the soda pop drink vending
machines that could also offer water were conceived (Verma, 2012).
The article of Fitz Villafuerte (2018) reveals the advantages of a vending
machine business. He mentioned that it is an all cash business. There is no entry for
accounts receivable because transactions are immediately paid in cash. He said that
vending machine is recession proof because based on facts, people tend to buy more
retail when times are hard. Then he added that in general, vending machines require only
minimal maintenance. Another is that there is no need to hire sales employees and that
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the vending machines are operating 24 hours a day. Because of that, there is minimal
overhead costs and the products can be sold at a competitive prices.
As per Villafuerte (2018), the things to consider when starting a vending machine
business are, firstly, finding suitable locations and deciding what products to sell.
Secondly, inquiring the establishment to ask the requirements and terms for putting-up
vending machines in the area. Thirdly, know the legal process of getting business
permits. Next, decide on whether to buy or to lease vending machines. After that, owners
should monitor the inventories. Lastly, make sure that the vending machine is always
clean, working well, attractive and readily visible. People might think that the products of
the machine are old and of poor quality if the vending machine is dusty or faulty
equipment.
Pilon (2019) also added some tips on how to start up a vending machine business.
First is to find your niche. Knowing the landscape in your area can help you choose an
area of focus. Second, to save up. The investor will need to purchase all the machines
and inventory before getting started; this can be a decent investment. Next is to compare
machines. The investment can vary depending on what type of machines and inventory
you choose. It is also important to learn about the technology. More specifically, there
are technological options for helping you track sales and inventory. An important point
as well, is to know your locations. It is a crucial decision to find locations to place the
vending machines. Office buildings, malls, hotels, schools and public buildings all
usually accommodate some type of vending machines. This might also be part of the
niche. Another tip is to consider adding extra service and to connect with larger firms if
there’s a plan of expanding the business. Lastly is how to maintain the machines. A
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schedule for restocking the machines and providing any necessary repairs or maintenance
is a must to maintain your machine that costs so much as an investment.
TJ Figueroa (2015) expressed that a vending machine business, like other
businesses is not an easy success. To make it a profitable business in the Philippines, it
still requires a careful study of the location, potential market, and also the concentration
of people in the area. It is a business with small capital, maintenance, and risk but grants
high rewards. People want convenience and instant viability. If the machine suffers an
error or defect, it may lose customers for first impressions last. It gives a big impact once
a dissatisfied customer spreads his or her experience to people.
Durden (2019) described the process of how the vending machine works. First on
the list is to stock the vending machine. Determine a schedule as to when the products
would be re-stocked. Once the machine is stocked, the machine should be tested by
putting money into the machine to confirm that it reads coins, paper money or credit
cards correctly. Next, collect the proceeds of sales. Make a schedule as well in doing this
job.
In terms of international performance, Technavio (2019) shared that the global
vending machine market is expected to post a compound annual growth rate (CAGR) of
close to 17% from during the period of 2019-2023. Easley (2019) also shared a fact in
his book that Japan alone has an annual sales from vending machines of over 7 trillion
yen.
Technavio (2019) also added that the increasing adoption of vending machines to
improve customer shopping experience is one of the crucial factors that drive the vending
machine market growth. Vending machines do not request the intervention of
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salespeople, support staff and other executives. Therefore, vending machines are a one-
time investment that enables cost savings by operating 24/7 and throughout the year. So,
this has caused many vendors to use vending machines to enhance customer satisfaction
and drives the vending machine market growth.
Whitehead (2019) reported that a vending machine business appeals to anyone
seeking a straightforward opportunity that doesn’t require special skills or training. It is
not easily seen a single vending machine producing life-changing profits but a few well-
placed machines can offer a good revenue stream.
In terms of products, a vending machine may contain a variety whether it be
drinks or food. Easley (2019) noted that according to Japan Vending Machine
Manufacturers Association, there are over 5.5 million vending machines in Japan, which
is 1 for every 25 people in the entire country and some even sell t-shirts aside from food
and beverages.
For the proposed business, five specific products are to be placed: soy milk,
calamansi juice, Dutch mill, Chuckie and QD drinking water. Apart from the fact that
these products were chosen for the proposed vending from a separately conducted survey,
there are also literature supporting the sale and consumption of such products.
For calamansi juice, according to Henrylito D. Tacio (2019), when taken
regularly, it keeps the kidney healthy. It also helps build immunity against the common
cold, flu and fever if taken on a regular basis.
Teenagers, adults under 25 years of age, and women should aim for a minimum of
three servings per day in the milk, yogurt, and cheese, or the dairy alternatives group. In
making selections, it is best to look for low-fat and nonfat products. Soy milk has become
13
a popular substitute for dairy milk that is available on market today. Soy Milk has known
to be beneficial for bone health (General Conference Nutrition Council, 2019).
Dutch Mill, on the other hand, also help with the bone health of a person. Aside
from that, this yogurt milk tastes good because it is a cow milk mixed with some flavored
fruits. Its suggested consumption is to take 1 to 2 packs of 90mL of Dutch Mill every day
for children while 1 to 2 packs of 180mL of Dutch Mill every day for adults
(Krismariani, 2018)
Meanwhile, chocolate milks are agents for recovery nutrition. Recovery nutrition
is the time when the human body needs to replenish his or her stores of energy after an
energetic workout or activity. Thus, chocolate milk are good for teachers and students
who are exerting energy everyday (Children's Hospital Colorado, 2019).
Definition of Terms
The following terms used are defined according the operational purpose of the
study conducted.
Vending Machine. It refers to an instrument which dispenses consumer items
after the customer inserts currency.
Vendo. An abbreviation for vending machine.
South Philippine Adventist College campus. The place where vending
machines are to put-up in this study.
QD Water. One of the products of the vendo. It is a colorless, tasteless and
inexpensive fluid safe to drink.
Soy milk. One of the products of the vendo. It is made by soaking and grinding
whole soybeans.
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Calamansi Juice. One of the products of the vendo. A Filipino drink similar to
lemonade.
Chuckie. One of the products of the vendo. A chocolate milk drink of Nestlé
brand.
Dutch Mill. One of the products of the vendo. A yogurt milk of Monde Nissin
brand.
Vendo Worker. It is an employee working for the vending machine. A working
student.
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Exhibit 1
1 Unstructured Interview for Existing Business
Dear Respondents:
We are students of South Philippine Adventist College taking up Bachelor of Science
in Accountancy. We need your assistance by answering the questionnaire accurately for
our feasibility study about “The Feasibility and Viability of Putting-up Vending
Machines at South Philippine Adventist College campus”.
All answers and responses obtained will be held confidential and will be strictly used
for academic purposes only. Thank you!
HANNYVIE DELEVERIO
RENALD BRUCE AÑASCO
Researchers
1. Why did you choose this type of business?
2. Is your business a single proprietorship, partnership, or corporation? Why did you
chose this type of form?
3. How many years has the business been operating?
4. What are the requirements of the government in starting a vending machine
business?
5. Can you discuss to us the preparations you encountered and the estimated periods
for each preparations before starting the operation of your business?
6. What are the challenges you have encountered in operating a vending machine
business?
7. How much was your initial capital when you started the business?
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8. Did you borrow money for capitalization? How much is the interest?
9. Did you buy or rent the vending machines?
10. How many vending machines do you have?
11. Where did you get your vending machines?
12. What are other equipment needed in this type of business?
13. What are the products of your machine?
14. Who are your suppliers of your products in the vending machine?
15. What are your strategies in the security for your vending machines? How much
does it cost you?
16. How often do you purchase your products?
17. What is the inventory level of products on hand before you buy additional
supplies?
18. How much is your average monthly electricity bill?
19. How many workers do you have?
20. What are the functions of each of the employees?
21. How do you pay your workers salary?
22. How much is your business permit fee?
23. How often do you check your vending machines for check-up and maintenance?
24. How much is your average maintenance expense per year?
25. Do you establish unforeseen cost, such as miscellaneous and contingencies? If
yes, by how much?
26. What are your other expenses?
27. How often do you replenish your products in the machine?
28. How much is your average income per day?
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Exhibit 2
2 Unstructured Interview for SPAC Store
Dear Respondent:
Machines at South Philippine Adventist College campus”.
HANNYVIE DELEVERIO
Researchers
1. What is the purchase price and selling price of 330mL calamansi juice?
2. What is the purchase price and selling price of 500mL soy milk?
3. What is the purchase price and selling price of 180mL Chuckie?
4. What is the purchase price and selling price of 90mL Dutch Mill?
5. What is the purchase price and selling price of 500mL QD Water?
6. How often do you order for each of the products?
7. Who are the supplier for each of the products?
8. How are each of the products being acquired?
9. How are each of the products being stored?
10. What is the transportation and storage cost of each product?
11. What are the other costs of the products?
18
Exhibit 3
3 Survey Questionnaire
Dear Respondents:
Machines at South Philippine Adventist College campus” specifically in the lobby, Junior
Academy and Senior Academy building.
HANNYVIE DELEVERIO
Researchers
Product description:
Vending machines are machinations that can dispense a variety of items after inserting a coin or a
bill. The SPAC vending machine contains different products such as: calamansi juice, soy milk, Dutch Mill,
Chuckie and QD water with the purpose of convenient and faster transactions for the customers.
Respondent’s Profile:
Category:
( ) Junior Academy ( ) Senior Academy ( ) College ( ) Faculty
1. Do you buy healthy drinks while staying here at SPAC? (If no, kindly proceed to
question #15.)
( ) Yes ( ) No
2. If yes, where?
( ) SPAC store ( ) Carenderia
19
( ) Cafeteria ( ) others, please specify:
3. How many times do you usually buy 330mL calamansi juice?
( ) Once a day ( ) Once a week
( ) Twice a day ( ) Twice a week
( ) others, please specify:
4. How many times do you usually buy 500mL soy milk?
5. How many times do you usually buy 90mL Dutch Mill?
6. How many times do you usually buy 180mL Chuckie?
7. How many times do you usually buy 500mL bottled water?
8. Have you tried purchasing your drinks from a vending machine? (If no, kindly
proceed to question #15.)
20
( ) Yes ( ) No
9. If yes, where?
( ) Hospital ( ) Convenience Store
( ) School ( ) Mall
( ) Airport ( ) others, please specify:
10. If we were to put-up vending machines at South Philippine Adventist
College, how frequent will you buy from us among other stores?
Vending Machine Other Stores
() 100% 0% (Please proceed to question #16)
() 0% 100% (Please end here. Thank you for your
cooperation!)
( ) other percentage, please specify:
% % (Please proceed to question #16)
11. 330mL Calamansi Juice

If the price is 20PhP, how many times will you buy the product in the vending
machine?
12. 500mL Soy milk

machine?
21
13. 90mL Dutch Mill
machine?
14. 180mL Chuckie
machine?
15. 500mL QD Water

machine?
Thank you for your cooperation!
22
CHAPTER 2
MARKETING STUDY
Part of the main objectives of all businesses is to identify, satisfy and retain
customers. In order to attain this, a business should construct their competitive edge by
brainstorming effective marketing strategies. This chapter answers the marketing
questions such as what is the product, who are the target markets, how the business will
sell the products, and whether there is a market for the proposed product.
Product Description
The main product of the proposed study is the service and availability of drinks
through vending machines inside SPAC. With a maintained temperature of at least 15ºC,
the products contained in the vending machines would sure to be cold and more
refreshing. The machines will be selling 330mL calamansi juice, 500mL soy milk, 90 mL
Dutch Mill, 180mL Chuckie, and 500mL QD Water.
The available flavors of Dutch Mil in the vending machines would be Superfruits,
Strawberry, Orange, Mixed fruits delights and Blueberry. The flavors to be displayed will
depend on what is available in the SPAC store.
The vending machines will be placed within the premises of the Junior Academy
Building, Senior Academy Building, and at the main lobby of the La Sage Auditorim
inside SPAC campus. Each layer consists of 9 springs and each spring holds 9 items, the
capacity of each layer is 81 (eighty-one) items. Figure 1 shows sample picture of a
23
vending machine and figure 2 shows the sample pictures of the
products.
Figure 1
1 Sample picture of
proposed vending
machine
Figure 2
2 Picture of proposed vending machine products
24
Industry Profile
The world is home to some 16 Million vending machines. Global growth is driven
by technological advancements that allow for automated, electronic transactions, such as
ordering through touchscreen-enabled devices or conducting secure, cash-less, mobile
payments (Hoover's, Inc., 2015).
According to recently published research conducted by a leading international
market research company, Global Research and Data Services, the expansion of the
global automatic goods – vending machine industry is forecast to reach 2.4% per annum
in the coming years. Between 2008 and 2014 the market increased with an average annual
growth of 3.1%. (Market Research Reports, 2019)
Currently, automatic beverage – vending machines account for 22.7% of the
global demand while the remaining market share is divided between other automatic
beverage – vending machines.
China, Italy, Japan, the United Kingdom and the United States represent the
largest automatic goods-vending machine markets while the strongest annual growth is
forecast to occur in Morocco (27%), Philippines (12.01%), Sudan (8%), and China (6.7%)
and Vietnam (6.4%). (Market Research Reports, 2019)
According to Mercelee Perez, the director for administration and HRMD of
Brokenshire College – Davao (Personal Interview, June 26, 2019), the drink vending
machine in their school plays an important role to people in the campus. It is where she
frequently goes to whenever she needs to refresh. It is mostly the same as to her
observation to the students and co-teachers.
25
SWOT Analysis
SWOT analysis is a strategic methodology to analyse the strengths and weaknesses
that the proposed project may possess. It also covers the opportunities and threats that the
project may face because of competitive and macro-economic factors.
Table 3
3 SWOT Analysis Matrix

Strengths Weaknesses
1. Accessibility to target markets 1. Novelty may hinder customers from buying

since they do not know how to use the
2. Availability for 24/6 hours machine.
3. Faster and more convenient transactions 2. Prone to damages due to improper
4. High quality vending machines handling.
5. Managed with specifically assigned 3. Electricity dependency
workers
4. Lack of interpersonal relationship
Opportunities Threats
1. Increasing student population 1. Damages due to destructive behavior of

2. Technological advances users and or animals
2. Decreased sales because of higher
patronage to school canteen.
3. Damages due to forces of nature
ANALYSIS
S1,S2,S3,W1 – Even if the project is just newly established, since it is accessible and available anytime,
people would constantly notice it and be familiar enough with it to patronize the service. The venture
would also provide tarpaulin beside each machine with instructions on how to use it properly.
S5,W2 – The vending machines are prone to damages just like any equipment but it will be regularly
monitored and checked by its assigned workers. It will also benefit from the security that the school
provides through the CCTV cameras and regularly roving guards.
S2,W3 – In case of black-outs, the venture will allot a certain amount for the use of the school generator to
ensure that the machines will continue to run and function.
W1,T2 – The research already considered the reality of customers sometimes choosing to buy from both
the College Store and the Vending Machines. Since the price will be the same for both sources, the
convenience of the vending machines will help attract sales for it.
O2,T2 – The vending machine technological advances may attract the attention of customers to try it out
and hopefully be return customers.
O1,T2 – Despite the possibility of competition with the Store, the increasing number of students and
possible customers would benefit both ventures to share in the market for drinks in the school.
26
Demand Analysis
Demand is generally affected by the behavior of consumers. It implies the desire
to possess a thing, the ability to pay for it and willingness in utilizing the thing. Thus, if
there is a demand, there is a market. (Avila-Bato, Malveda, & Marcelino, 2015)
To determine the viability of the business, a survey questionnaire was used to
gather data regarding demand. To determine the demand, the researchers had to gather
first the historical population of the target market for at least five (5) years. The target
market of the proposed project are the students and faculty members of SPAC.
Table 4 shows the historical data of the target market covering the semestral
months.
Table 4
4Historical Population – SPAC Students and Faculty 2014-2018 (Semestral)

Total %
College Faculty Members Increase
Junior Senior Popu. Increase
Year
Academy Academy 1st 2nd 1st 2nd
Ave. Ave.
sem sem sem sem
Year 1 313 0 272 369 321 74 74 74 708
Year 2 281 0 377 359 368 74 74 74 723 16 2%
Year 3 287 135 332 326 329 87 87 87 838 115 16%
Year 4 288 285 305 280 293 87 85 86 952 114 14%
Year 5 351 305 474 431 453 85 89 87 1196 244 26%
Source: Appendix 1&2
The table presents data on a school year basis since the venture is supposed to
function within the school premises and within its calendar. Year 1 is SY 2014-2015,
Year 2 is SY 2015-2016, Year 3 is SY 2016-2017, Year 4 is SY 2017-2018 and Year 5 is
SY 2018-2019. Based on the table, the historical population increased 2% in Year 2, 16%
in Year 3, 14% in Year 4 and 26% in Year 5. The growth rate was determined by dividing
the increase in population of the current school year to the total population of the previous
school year. The population of students and faculty members of SPAC from the school
27
year 2014-2015 to 2018-2019 increased inconsistently therefore the researchers used the
statistical straight-line method in computing the projected population for the next five
years.
The projected first and second semester population of SPAC for the next five
years is presented in the table below.
Table 5
5 Projected Population – SPAC Students & Faculty Members 2020-2021 (Semestral)

Year Population Increase
Year 1 1244
Year 2 1365 121
Year 3 1485 120
Year 4 1606 121
Year 5 1726 120
Refer to Appendix 4
Using the statistical straight-line method, the projected population for the next five
years is 1,244 in Year 1 (SY 2020-2021) and in Year 5 (SY 2024-2025) the projected
population is 1,726. Table 5 shows the constant increase of the projected population of
students and faculty members of SPAC. It should be noted that difference due to rounding
off of numbers are present during the projection.
Table 6 shows the historical data of the target market covering the months during
summer class.
Table 6
6 Historical Population – SPAC Students and Faculty 2014-2018 (Summer)

Faculty Total Growth
Year College Increase(Decrease)
Members Population Rate
Year 1 162 74 236

Year 2 182 74 256 20 8%
Year 3 148 87 235 (21) -8%
Year 4 149 85 234 (1) 0%
Year 5 194 89 283 49 21%
28
Source: Appendix 1&2
The population of students and faculty members of SPAC from the school year
2014-2015 to 2018-2019 is increasing then decreasing therefore the researchers used the
statistical parabolic method in computing the projected population for the next five years.
The projected summer population of SPAC for the next five years is shown in the
table below.
Table 7
7 Projected Population – SPAC Students and Faculty 2020-2024 (Summer)

Year Population Increase
Year 1 309
Year 2 355 46
Year 3 412 57
Year 4 481 69
Year 5 561 80
Refer to Appendix 4
Using the statistical parabolic method, the projected population for the next five
years is 309 in 2020-2021 and in 2024-2025 the projected population is 561.
From the information gathered through survey questionnaires, the percentage of
willingness was determined. The result shows that 94.24% from the semestral or 10-
month period respondents are willing to patronize the service while 96.15% of the
summer population are willing to patronize the service.
The percentage of planned patronage was also determined using the survey
questionnaire. This is to consider the reality that a customer may very easily purchase
from the vending machine now and then purchase another one from the College Store
later. For theoretical and research purposes, the patronage percentage was determined to
account for the portion of the customers buying activity that will specifically be for the
vending machine. Among the choices, the respondent is asked whether he/she will be
29
making his/her drink purchase to the vending machines all the time (100%), 80% of the
time, half of the time (50%) or not at all (0%). Respondents may also indicate their
chosen patronage percentage if it was not among the choices.
For Semestral data, 39.23% from the 94.24% that claimed that they will avail from
the vending machines also claimed that they will make all their drink purchase from the
vending machines. 15.79% claims that they will buy from the vendo 8 out of 10 times.
37.72% claimed that will buy half of the time and 0.75% each for 60% and 40%.
For Summer data, 40% from the 96.15% that claimed that they will avail from the
vending machines also claimed that they will make all their drink purchase from the
vending machines. 16.15% claims that they will buy from the vendo 8 out of 10 times.
38.46% claimed that will buy half of the time and 0.77% each for 60% and 40%.
With this information the projected population is multiplied to the percentage of
their chosen patronage, the frequency and quantity of the drinks that they are also willing
to buy and lastly the price that is set by the College Store for the products sold. It should
be noted that the price used for the computation of the demand and supply in peso are the
same since the vending machines would actually be just like an extension of the store on
other locations. This is done for both semestral and summer data to account for a whole
12-month calendar year as evidenced by the combined number of projected population
from Semestral (1,244) and Summer (309) respondents in Year 1 and so on. Table 8
shows the projected annual demand in quantity and in pesos of each product.
30
Table 8
8 Projected Annual Demand

Calamansi Juice
Projected Demand in Demand in Increase Growth
Year
Population Units Peso (Decrease) Rate
Year 1 1,553 140,733 2,814,667.05
Year 2 1,721 154,800 3,096,009.93 281,342.88 10%
Year 3 1,898 169,022 3,380,443.80 284,433.87 9%
Year 4 2,087 183,613 3,672,260.07 291,816.27 9%
Year 5 2,287 198,358 3,967,167.33 294,907.26 8%
Soya Milk
Year
Year 1 1,553 95,095 2,852,845.69
Year 2 1,721 104,651 3,139,516.23 286,670.54 10%
Year 3 1,898 114,346 3,430,388.76 290,872.53 9%
Year 4 2,087 124,326 3,729,766.21 299,377.46 9%
Year 5 2,287 134,445 4,033,345.66 303,579.44 8%
Dutch Mill
Year
Year 1 1,553 132,961 1,595,532.88
Year 2 1,721 146,156 1,753,871.00 158,338.11 10%
Year 3 1,898 159,429 1,913,151.43 159,280.43 9%
Year 4 2,087 172,987 2,075,842.19 162,690.76 9%
Year 5 2,287 186,623 2,239,475.26 163,633.07 8%
Chuckie
Year
Year 1 1,553 98,804 2,470,111.34
Year 2 1,721 108,708 2,717,695.14 247,583.80 10%
Year 3 1,898 118,739 2,968,473.46 250,778.31 9%
Year 4 2,087 129,048 3,226,191.33 257,717.87 9%
Year 5 2,287 139,484 3,487,103.71 260,912.38 8%
QD Water
Year
Year 1 1,553 229,723 2,297,229.75
Year 2 1,721 252,534 2,525,341.79 228,112.05 10%
Year 3 1,898 275,491 2,754,908.65 229,566.86 9%
Year 4 2,087 298,948 2,989,479.46 234,570.81 9%
Year 5 2,287 322,551 3,225,505.09 236,025.62 8%
Source: Appendix 5
31
The annual demand in peso in Year 1 of calamansi juice, soy milk, Dutch Mill,
Chuckie and QD Water are P2,814,667.05; P2,852,845.69; P1,595,532.88;
P2,470,111.34; P2,297,229.75 respectively. See in Appendix 5 for the rest of the
computation of annual demand in units.
Supply Analysis
This portion of the study deals with the quantity of goods that firms are ready and
willing to sell at a given price at a given point in time. (Avila-Bato et al, 2015)
Technically since the market is confined within the school premises and that the
vending machines are actually going to be an extension of the College Store, there should
be no competition among the sellers. However in terms of accounting for individual sales
and performance, the College Store is identified as the main existing supplier of the same
drinks that the vendo are planning to market. Identification therefore of the supply is still
needed since the demand is increasing and in order to identify the portion of the market
that is still available for SPAC Vendo to saturate. Table 9 shows the annual supply.
Table 9
9 Projected Annual Supply

Calamansi Juice
Projected Supply in Increase
Year Supply in Units Growth Rate
Population Peso (Decrease)
Year 1 1,553 131,431 2,520,101.58
Year 2 1,721 144,498 2,765,224.00 245,122.42 10%
Year 3 1,898 157,658 3,008,320.62 243,096.62 9%
Year 4 2,087 171,116 3,253,443.04 245,122.42 8%
Year 5 2,287 184,667 3,496,539.65 243,096.62 7%
Soya
Milk
Year 1 1,553 63,922 1,917,651.14
Year 2 1,721 70,359 2,110,761.05 193,109.91 10%
Year 3 1,898 76,900 2,306,987.71 196,226.66 9%
32
Table 9 Continuation
Year 4 2,087 83,640 2,509,210.76 202,223.05 9%

Year 5 2,287 90,485 2,714,550.57 205,339.81 8%
Dutch Mill
537,129.
Year 1 1,553
53,713 67
Year 2 1,721 59,175 591,746.10 54,616.44 10%
Year 3 1,898 64,761 647,608.14 55,862.04 9%
Year 4 2,087 70,551 705,506.09 57,897.95 9%
Year 5 2,287 76,465 764,649.63 59,143.55 8%
Chuckie
Year 1 1,553 59,388 1,484,709.17
Year 2 1,721 65,310 1,632,742.87 148,033.70 10%
Year 3 1,898 71,286 1,782,143.98 149,401.12 9%
Year 4 2,087 77,408 1,935,187.68 153,043.70 9%
Year 5 2,287 83,584 2,089,598.79 154,411.12 8%
QD Water
Year 1 1,553 172,158 1,721,582.54
Year 2 1,721 189,243 1,892,425.12 170,842.58 10%
Year 3 1,898 206,428 2,064,281.28 171,856.16 9%
Year 4 2,087 223,981 2,239,814.15 175,532.87 9%
Year 5 2,287 241,636 2,416,360.59 176,546.44 8%
Source: Appendix 6
Utilizing the survey questionnaire, 77% of the respondents claimed that they are
currently buying drinks while they are inside SPAC. Among the 77%, 89.01% purchase
calamansi juice, 71.79% purchase soya milk, 55.31% purchase Dutch Mill, 57.51% buy
Chuckie and 84.62% buy QD bottled water during a regular semester. On Summer
83.08% were already buying the drinks in the campus. Among this 83.08%, 92.59% are
purchasing calamansi juice, 87.96% are purchasing soya milk, 71.30% are purchasing
Dutch Mill, 69.44% are buying Chuckie and 82.41% are buying QD bottled water. These
33
figures were used together with frequency and quantity of their usual purchase to account
for the total supply of the products mentioned. Again, computations are done for both
semestral and summer data to account for a 12-month calendar year. The projected
population is also used for this portion.
The annual supply in peso in Year 1 of calamansi juice, soy milk, Dutch Mill,
Chuckie and QD Water are P2,520,101.58; P1,917,651.14; P556,688.18; P1,484,709.17 ;
P1,721,582.54 respectively. Visit Appendix 6 for the rest of the computation of annual
supply in units.
Demand and Supply Analysis
To determine the market share of the proposed venture, the analysis of demand
and supply should take place. This analysis enables the proponents to ascertain the good
number of demand over the supply.
The demand is greater than the supply therefore there is still a free market before
the entrance of the proposed venture. With that, it is ensured that the products of the
vending machines can be sold immediately since it is also more accessible and convenient
to the target market. In Table 10, the demand and supply analysis in market share and
unmet demand share are shown.
Table 10
10 Demand and Supply Analysis

Calamans
i
Unmet Market Unmet
Year Demand Supply Capacity
Demand Share Demand Share
Year 1 140,733 131,431 9,302 9,302 7% 100%
Year 2 154,800 144,498 10,303 10,303 7% 100%
Year 3 169,022 157,658 11,364 11,364 7% 100%
Year 4 183,613 171,116 12,497 12,497 7% 100%
Year 5 198,358 184,667 13,691 13,691 7% 100%
34
Soya Milk
Unmet Market Unmet
Year 1 95,095 63,922 31,173 25,978 27% 83.33%
Year 2 104,651 70,359 34,292 28,577 27% 83.33%
Year 3 114,346 76,900 37,447 31,206 27% 83.33%
Year 4 124,326 83,640 40,685 33,904 27% 83.33%
Year 5 134,445 90,485 43,960 36,633 27% 83.33%
Dutch Mill
Unmet Market Unmet
Year 1 132,961 53,713 79,248 79,248 60% 100%
Year 2 146,156 59,175 86,981 86,981 60% 100%
Year 3 159,429 64,761 94,668 94,668 60% 100%

Year 4 172,987 70,551 102,436 102,436 60% 100%
Year 5 186,623 76,465 110,158 110,158 60% 100%
Chuckie
Unmet Market Unmet
Year 1 98,804 59,388 39,416 39,416 40% 100%
Year 2 108,708 65,310 43,398 43,398 40% 100%
Year 3 118,739 71,286 47,453 47,453 40% 100%
Year 4 129,048 77,408 51,640 51,640 40% 100%
Year 5 139,484 83,584 55,900 55,900 40% 100%
QD Water
Unmet Market Unmet
Year 1 229,723 172,158 57,565 57,565 25% 100%
Year 2 252,534 189,243 63,292 63,292 25% 100%
Year 3 275,491 206,428 69,063 69,063 25% 100%
Year 4 298,948 223,981 74,967 74,967 25% 100%
Year 5 322,551 241,636 80,914 80,914 25% 100%
Refer to Table 8, 9 & 12
35
Marketing Plans
The marketing plans are the sets of marketing tools that the firm uses to achieve its
objectives in its target market. These marketing tools, also known as the 7P’s, are the
product, its price, promotion, place, people, physical environment and process (Baker,
2003).
Product. A product is something that is viewed as capable of satisfying a need or
want. It is the bundle of satisfaction to which the buyer receives that might attract a
customer to patronize such product or services (Alminar-Mutya, 2015).
The proposed venture focuses on vending machines selling drinks which are
already being sold in the SPAC Store. As per Ma’am Joan Bombeo (Personal Interview,
March 8, 2019), it would be safer if the products to be sold are all commercial products to
avoid food contamination. The proposed business would therefore ensure that the
products to be sold are safe to drink. The products in the vending machine will remain
cold all throughout the day and night. And in case of blackouts, the venture sets funds for
gasoline consumption for the generator. Spoilage would be avoided because of this. The
goods would also be checked regularly during cleaning and refill periods to ensure that
there is sufficient supply and that the products are in good condition. The venture would
guarantee that the customers would receive the best service through the features of the
vending machines.
Promotion. To establish channels of information and persuasion and to inform the
products of a business, promotion must be done. It is to help build good business image
and gain popularity in the market (Alminar-Mutya, 2015).
The business need not to focus on promoting the goods of the vendo because the
products are already bestsellers of the SPAC store. The proposed project would rather
36
promote the usage of vending machines. On the general orientation every semester, there
will be small orientations regarding the use of the vending machines. Beside each vending
machine, tarpaulins will be placed containing instructions on how to properly use the
machine and warning signs to deter misuse and damage from students and other users
(Appendix 18). The services of the vending machines can also be a medium of advertising
of the school through pictures in its official flyers and tarpaulins to attract possible
enrollees which will eventually become the target market of the business.
The service will also be promoted through social media. Pictures will be posted
on the official SPAC Facebook pages. Another way of promotion is to coordinate with the
teachers in the marketing and entrepreneurship classes or Senior High performance tasks
to make commercial videos for the vending machines to be presented in the La Sage
Auditorium during events. It could also be promoted through hope radio streaming.
Upon the commencement of the operations, there would be a ribbon-cutting and a
blessing program to the vending machines to create the hype. Then the administrators are
the first ones who would try out the machines. This would be featured by the SPAC
Media and post it to their official social media accounts. The cash budget for the
promotional/instructional tarpaulins and ribbon-cutting in the first year will be P400.00
and P30.00 respectively. This will also form part in the pre-operating costs of the venture.
Pricing. This is the amount of money needed in order to acquire a product or
service in its accompanying services (Alminar-Mutya, 2015).
The products to be sold through the vending machines has similar price to the
SPAC store since the vending machines are under the supervision of SPAC Store. This
price will give the business a profit after covering all the operating costs and production
costs.
37
The researchers decided to hire working students in this study to cut the expenses
of the venture, and with this, the venture could also help the working students by giving
working opportunities. The electricity cost for drink vending machine business and drink
business for nonvending machine business are relatively the same because they are both
needed to function 24hrs to preserve the goods. The advantage of a vending machine is
that it is still selling while all other stores are close. The vending machine could have a
higher income for these reasons though its price is the same as to the SPAC store.
Place. The proposed venture will be located at Junior Academy Building, Senior
Academy Building and at the main lobby of the La Sage Auditorium of South Philippine
Adventist College - campus. The researchers believe that these locations are strategically
good for the convenience of the target markets. The researchers made sure that the
location of the vendo are fair to each of the target markets. The senior academy building
vendo and junior academy building vendo is place to where it is equidistant to everybody.
More advantageous to the junior academy building because it is in between of the two
buildings wherein the CCTVs can directly monitor the activities of the machines.
Vending machines will also serve as a reminder to every passer-by that it is time to drink
fluids and refresh especially to the lobby where the vendo is commonly found or seen.
People. This study does not require manpower to distribute its products. The
vending machines are the ones that will entertain the customers during a sale transaction.
To aid in marketing its services, the employees involved with the vendo would most
likely be responsible for the cleanliness of the vendo and its surroundings to attract
possible customers due to its pleasant environment.
Physical Environment. As stated, the employees involved will also be
responsible for the cleanliness of the vendo and its surroundings. There would be two
38
trash cans beside each vending machine. This would help maintain the cleanliness of the
campus. These trash cans will be emptied every day to the common trash of the school by
the vendo workers. One trash can is for the biodegradable. This is primarily for the waste
containers of Chuckie and Dutch Mill. This kind of trash will be collected according to
the schedule of garbage collection from the municipality. The other trash can is for the
plastics, primarily for the waste plastic bottle of soy milk, calamansi juice and QD Water.
These kinds of trash are put into the containers of plastic bottles as shown in figure 3.
These plastic bottles will be sold later on by the school.
Figure 3
3 Picture of the Plastic Bottles Tin Cans Container
Process. The vending machine business has a simple process. The products to be
sold are first received by the SPAC store and they are the ones who will inspect the
quality of the products. Before the products are placed into the vending machines, the
vendo workers would check the expiry date. The temperature inside the vending machines
39
will be checked and maintained at 15ºC to avoid spoilage of the products. In case of black
outs, the business would prepare gasoline for the generators of the school so that the
operation of the vending machines would not be interrupted.
Usually the vending machines are refilled once a day but it can be refilled twice a
day or more if there is higher demand in a day. These may happened during events of the
school like graduation, recitals, big camping events, conventions and the like.
40
Exhibit 4
4Tally Sheet of Survey Questionnaire for 1st sem and 2nd sem
Dear Respondents:
our feasibility study about “The Feasibility and Viability of Putting-up Vending Machines
at South Philippine Adventist College campus” specifically in the lobby, Junior Academy
and Senior Academy building.
HANNYVIE DELEVERIO
Researchers
Category:
( ) Junior Academy 87 29%
( ) Senior Academy 78 26%
( ) College 114 38%
( ) Faculty 21 7%
300 100%
question #15.)
( ) Yes 231 77%
41
( ) No 69 8.70%
300 100%
2. If yes, where?
( ) SPAC store 218 72.19%
( ) Cafeteria 70 23.18%
( ) Outside/Carenderia 14 4.64%
302 100%

( ) Once a day 30 13.19%
( ) Twice a day 26 11.36%
( ) Once a week 85 37%
( ) Twice a week 32 13.92%
N/A 25 10.99%
Thrice a day 6 2.56%
Once a month 22 9.52%
3x a year 3 1.47%
231 100%
100%
-10.99 Not currently buying calamansi juice
89.01% Currently buying calamansi juice

( ) Once a day 5 2.20%
( ) Twice a day 14 6.23%
( ) Once a week 92 36.93%
( ) Twice a week 26 11.36%
N/A 65 28.21%
42
Once a year 3 1.47%
Twice a month 4 1.83%
Thrice a month 1 0.37%
Once in a sem 1 0.37%
3x a week 2 0.73%
231 100%
100%
-28.21% Not currently buying soya milk
71.79% Currently buying soya milk

( ) Once a day 19 8.06%
( ) Twice a day 4 1.83%
( ) Once a week 58 25.27%
( ) Twice a week 34 14.65%
N/A 103 44.69%
231 100%
100%
-44.69% Not currently buying Dutch Mill
55.31% Currently buying Dutch Mill
( ) Once a day 16 6.96%
( ) Twice a day 10 4.40%
( ) Once a week 56 24.18%
( ) Twice a week 32 13.92%
N/A 98 42.49%
Once in every quarter 6 2.56%
Once a year 4 1.83 %
43
231 100%
100%
-42.49% Not currently buying Chuckie
57.51% Currently buying Chuckie
( ) Once a day 61 26.37%
( ) Twice a day 41 17.58%
( ) Once a week 30 13.19%
( ) Twice a week 45 19.41%
N/A 36 15.38%
3x a week 8 3.30%
231 100%
100%
-15.38% Not currently buying QD Bottled Water
84.62% Currently buying QD Bottled Water
( ) Yes 69 30.04%
( ) No 162 69.96%
231 100%
9. If yes, where?
( ) Hospital 21 25.61%
( ) Convenience Store 21 25.61%
( ) School 19 23.17%
( ) Mall 9 10.98%
( ) Airport 7 8.54%
City Hall 5 6.10%
82 100%
44
10. If we were to put-up vending machines at South Philippine Adventist College,
how frequent will you buy from us vs Other Stores?
() 100% 0% 117 39.23%
() 80% 20% 48 15.79%
() 50% 50% 113 37.72%
() 0% 100% 18 5.76%
() 60% 40% 2 .75%
() 40% 60% 2 .75%
300 100%
100%
-5.76% Not willing to avail of Vending Machine Services
94.24% Willing to avail of Vending Machine Services

If the price is 25PhP, how many times will you buy the product?
( ) Once a day 85 30.14%
( ) Twice a day 29 10.28%
( ) Once a week 83 29.43%
( ) Twice a week 58 20.57%
N/A 14 4.96%
Once a year 2 0.35%
282 100%
100%
-4.96% Not willing to avail calamansi juice
45
95.04% Willing to avail of calamansi juice
12. 500mL Soy milk

( ) Once a day 52 18.44%
( ) Twice a day 17 6.03%
( ) Once a week 114 40.43%
( ) Twice a week 34 12.06%
N/A 45 15.96%
282 100%
100%
-15.96% Not willing to avail soy milk
84.04% Willing to avail of soy milk
13. 90mL Dutch Mill

( ) Once a day 58 20.57%
( ) Twice a day 40 14.18%
( ) Once a week 77 27.30%
( ) Twice a week 56 19.86%
N/A 51 18.09%
282 100%
100%
-18.09% Not willing to avail Dutch Mill
84.04% Willing to avail of Dutch Mill
14. 180mL Chuckie

46
( ) Once a day 50 17.73%
( ) Twice a day 22 7.80%
( ) Once a week 97 34.40%
( ) Twice a week 38 13.48%
N/A 63 22.34%
282 100%
100%
-22.34% Not willing to avail Chuckie
77.66% Willing to avail of Chuckie
15. 500mL QD Water

( ) Once a day 95 33.69%
( ) Twice a day 76 26.95%
( ) Once a week 39 13.83%
( ) Twice a week 57 20.21%
N/A 11 3.90%
5x a day 4 1.42%
282 100%
100%
-3.90% Not willing to avail QD Water
96.10% Willing to avail of QD Water
47
Exhibit 5
5 Tally Sheet of Survey Questionnaire for Summer
Dear Respondents:
at South Philippine Adventist College campus” specifically in the lobby, Junior Academy
and Senior Academy building.
HANNYVIE DELEVERIO
Researchers
Category:
( ) College 114 69.09%
( ) Faculty 51 30.91%
165 100%
question #15.)
( ) Yes 137 83.08%
( ) No 28 16.92%
48
165 100%
2. If yes, where?
( ) SPAC store 127 74.80%
( ) Cafeteria 22 13.01%
( ) Outside/Carenderia 21 12.20%
170 100%

( ) Once a day 14 10.19%
( ) Twice a day 13 9.26%
( ) Once a week 61 44.44%
( ) Twice a week 14 10.19%
N/A 10 7.41%
4x a day 1 0.93%
137 100%
100%
-7.41 Not buying calamansi juice
92.59% Currently buying calamansi juice
( ) Once a day 16 12.40%
( ) Twice a day 8 5.56%
( ) Once a week 56 40.74%
( ) Twice a week 14 10.19%
N/A 16 12.04%
137 100%
49
100%
-12.04% Not buying soya milk
87.96% Currently buying soya milk
( ) Once a day 13 9.26%
( ) Twice a day 10 7.41%
( ) Once a week 53 38.89%
( ) Twice a week 9 6.48%
N/A 39 28.70%
Thrice a week 1 8.33%
137 100%
100%
-28.70% Not buying Dutch Mill
71.30% Currently buying Dutch Mill
( ) Once a day 11 8.33%
( ) Twice a day 3 1.85%
( ) Once a week 56 40.74%
( ) Twice a week 14 10.19%
N/A 42 30.56%
Once a year 1 0.93 %
137 100%
100%
-30.56% Not buying Chuckie
69.44% Currently buying Chuckie

( ) Once a day 29 21.30%
50
( ) Twice a day 14 10.19%
( ) Once a week 34 25.00%
( ) Twice a week 24 17.59%
N/A 24 17.59%
5x a week 1 0.93%
137 100%
100%
-17.59% Not buying QD bottled water
82.41% Currently buying QD bottled water
( ) Yes 67 49.07%
( ) No 70 50.93%
137 100%
9. If yes, where?
( ) Hospital 14 20.25%
( ) Convenience Store 20 30.38%
( ) School 14 21.52%
( ) Mall 13 18.99%
( ) Airport 5 7.59%
City Hall 1 1.27%
67 100%
10. If we were to put-up vending machines at South Philippine Adventist College,
how frequent will you buy from us among other stores?
() 100% 0% 67 40%
() 80% 20% 27 16.15%
51
() 50% 50% 63 38.46%
() 0% 100% 6 3.85%
60% 40% 1 .77%
40% 60% 1 .77%
165 100%
100%
-3.85 Not willing to avail of Vending Machine Services
96.15% Willing to avail of Vending Machine Services
( ) Once a day 60 37.60%
( ) Twice a day 15 9.60%
( ) Once a week 50 31.20%
( ) Twice a week 22 13.60%
N/A 4 2.40%
Thrice a week 1 0.80%
159 100%
100%
-2.40% Not willing to avail calamansi juice
97.60% Willing to avail of calamansi juice
12. 500mL Soy milk

( ) Once a day 53 33.60%
( ) Twice a day 8 4.80%
( ) Once a week 66 41.60%
( ) Twice a week 19 12.00%
52
N/A 6 4.00%
159 100%
100%
-4% Not willing to avail soy milk
96% Willing to avail of soy milk
13. 90mL Dutch Mill

( ) Once a day 43 27.20%
( ) Twice a day 6 4.00%
( ) Once a week 64 40.00%
( ) Twice a week 22 13.60%
Once a month 4 2.4%
N/A 20 12.80%
159 100%
100%
-12.80% Not willing to avail Dutch Mill
87.20% Willing to avail of Dutch Mill
14. 180mL Chuckie

( ) Once a day 57 36.00%
( ) Twice a day 5 3.20%
( ) Once a week 52 32.80%
( ) Twice a week 19 12.00%
N/A 23 14.40%
53
159 100%
100%
-14.40% Not willing to avail Chuckie
85.60% Willing to avail of Chuckie
15. 500mL QD Water

( ) Once a day 66 41.60%
( ) Twice a day 27 16.80%
( ) Once a week 29 18.40%
( ) Twice a week 22 13.60%
N/A 15 9.60%
159 100%
100%
-9.60% Not willing to avail QD Water
90.40% Willing to avail of QD Water
54
Exhibit 6
6 Result of the SPAC Store Interview
Dear Respondent:
at South Philippine Adventist College campus”.
HANNYVIE DELEVERIO
Researchers
1. What is the purchase price and selling price of 330mL calamansi juice? – ₱15.00;
₱20.00
2. What is the purchase price and selling price of 500mL soy milk? - ₱25.00; ₱30.00
3. What is the purchase price and selling price of 180mL chuckie? – ₱20.00; ₱25.00
4. What is the purchase price and selling price of dutch mill? – ₱9.50; ₱12.00
5. What is the purchase price and selling price of QD Water? – ₱7.50; ₱10.00
6. How often do you order for each of the products? – every 15 days
7. Who are the supplier for each of the products?
– Davao Mission, Nestlé, De Invest, QD Water
8. How are each of the products being acquired? - delivered
9. How are each of the products being stored?
- through chiller provided by supplier
10. What is the transportation and storage cost of each product? -
11. What are the other costs of the products? –
55
Exhibit 7
7 Result of the Existing Business Interview
Dear Respondents:
at South Philippine Adventist College campus”.
HANNYVIE DELEVERIO
Researchers
1. Why did you choose this type of business? – decision of school’s admin
2. Is your business a single proprietorship, partnership, or corporation? Why did you
chose this type of form? – consignment contract
3. How many years has the business been operating? – 5 years
4. What are the requirements of the government in starting a vending machine
business?
– Not our duty
5. Can you discuss to us the preparations you encountered and the estimated periods
for each preparations before starting the operation of your business? – not our duty
6. What are the challenges you have encountered in operating a vending machine
business? – do not have a mechanism to check the sales of vendo
56
7. How much was your initial capital when you started the business? - none
8. Did you borrow money for capitalization? How much is the interest? - none
9. Did you buy or rent the vending machines? – consignment basis
10. How many vending machines do you have? - two
11. Where did you get your vending machines? – included in consignment contract
12. What are other equipment needed in this type of business? – none
13. What are the products of your machine? – coffee and water
14. Who are your suppliers of your products in the vending machine? – part of
consignment contract
15. What are your strategies in the security for your vending machines? How much
does it cost you? – none
16. How often do you purchase your products? – not our duty
17. What is the inventory level of products on hand before you buy additional
supplies? – Not our duty.
18. How much is your average monthly electricity bill? – 2,500
19. How many workers do you have? – None. Usually there are two vendo workers
who are visiting the vendo.
20. What are the functions of each of the employees? - none
21. How do you pay your workers salary? - none
22. How much is your business permit fee? - none
23. How often do you check your vending machines for check-up and maintenance? -
unknown
24. How much is your average maintenance expense per year? – P10,000
57
25. Do you establish unforeseen cost, such as miscellaneous and contingencies? If
yes, by how much? - none
26. What are your other expenses? - none
27. How often do you replenish your products in the machine? – Not our duty. The
consignor visits the vendo every day or every other day.
28. How much is your average income per day? – The consignor didn’t disclose any
sales. We can earn per cup.
58
CHAPTER 3
TECHNICAL STUDY
This chapter discusses the flow of operation of the proposed venture. This
includes presentation of the process flow, equipment, location, capacity and schedule,
and purchase costs.
Process Flow
The processes involved in the proposed business are enumerated below and are
presented in Figure 3.
1. Purchasing of products. This refers to buying of the products to be placed
inside vending machines. All such goods are to be acquired together with the
inventory for the SPAC store. To purchase, all products will be acquired
through contracted orders from suppliers. These will be received through the
delivery of suppliers. The supplier of Soy Milk and Calamansi Juice is Davao
Mission Foods. While Dutch Mill, Chuckie, and QD Water will come from
De Invest, Nestle and SPAC QD respectively. For QD, delivery of supplies
will be as needed. For Davao Mission, delivery will be every seven (7) days.
For other outside suppliers, delivery of the products will be every fifteen (15)
days. All inventories that will not be placed in the vending machine will be
stored inside supplier provided chillers. This process will be done with the
orders for the SPAC store and will not require services from the vending
59
machine assigned workers. Receiving, counting, stacking (done by suppliers)
and document signing may be accomplished within 2-3 hours per delivery.
2. Cleaning. This refers to cleaning the vending machines, its surroundings and
collecting its trash. While doing this, an estimate of the products for refill
should be made. This will be done by a student worker assigned for vending
machine services and can be accomplished within 2 hours, daily during the
morning.
3. Stock/Restock. The main process refers to the stocking of products in the
vending machine. Before the products are placed into the vending machines,
the vendo workers would check the expiry date. Since on the early years, the
machine will not be full, the assigned stocker should make sure that the
products are placed on the front-most coils of each spring. Stocking should
also done on a First-in-First-out basis. The temperature inside the vending
machines will be also need to be checked maintained at 15ºC to avoid spoilage
of the products. One student worker will be assigned for this activity. This
will be done within 2 hours during lunch time.
4. Selling. This refers to distributing the products to the customers. This process
will be done through the machine. The buyer will punch in his/her order based
on his/her chosen product. The machine will ask for a specific amount
depending on the order. The customer will put in his/her money and then
retrieve the product and change depending on the money placed in. Depending
on the customer, the number of orders and their decisiveness, the process may
take 1-2 minutes for a single order-purchase. This process occurs all-
throughout the day.
60
5. Collection. This refers to the collection of sales from the vending machine to
be done by the assigned student worker. Money will be retrieved from all
machines together. Money will be remitted to the store supervisor, counted
and checked for accuracy. Recording of sales information and machine status
can be monitored through password protected data provided by the machine
itself. This can be retrieved through the use of a USB Flash Drive. Any
discrepancy will be settled with the student worker. This process is done daily
for about 1 hour.
Figure 4
Purchasing of
Cleaning Stock/Restock
Products
Collection Selling
4 Process Flow of the Proposed Business
Equipment
The business will use the following equipment because these are all important in
the major work operations of the venture. Table 11 shows the equipment needed by the
business with the corresponding price, estimated life and annual depreciation.
61
Table 11
11 Equipment and Annual Depreciation

Other Estimated Annual
Item Qty. Price Total
Expenditures Life (Yrs) Depreciation
Vending
3 units ₱ 87,692.50 ₱ 127,529.50 ₱ 390,607.00 10 ₱ 39,060.70
Machine
Trolley 1 unit 800.00 382.00 1,182.00 5
Total ₱ 127,911.50 ₱ 391,789.00 ₱ 39,060.70
Source: www.metalwork.cc, Lazada, Appendix 7, Appendix 8
The total cost for SPAC Vendo is ₱263,077.50, plus necessary expenditures to
prepare the asset for its intended use such as sea freight cost of ₱107,736 and total
installation cost of ₱19,793.00 (breakdown found in Appendix 8). The purchase price of
vending machines and sea freight cost are quoted in USD 1,750 and USD 2,150
respectively. To be more accurate in translating this to peso, the researchers used the
forecasted dollar to peso rate for February 2020, the expected month to buy the vending
machines, which is ₱50.11 as shown in Appendix 9. The researchers used the open rate
since the vending machines are expected to purchase at the early of February or February
1 if possible.
The purchase price of the trolley is ₱800.00 plus shipping fee of ₱382.00. Total
amount of ₱1,182.00 is considered to be an outright expense since it does not reach the
threshold of ₱2,000.00 for it to be a depreciable asset.
The proposed vending machine is planned to be purchased from China from the
manufacturer Guangdong Dongji Intelligent Device Co., Ltd. The machine can carry both
snacks and drinks but the SPAC Vendo plans for it to carry only drinks. It accepts coins
or bills and can provide change in return (only in coins). For this a change fund should be
kept and monitored for replenishment. It runs on 500W, 110V-220V, 50/60 Hz power
and weighs about 300 kilograms per machine. It has cooling and adjustable temperature
62
functions from 5 to 26 degrees Celsius. It also has a built in data memory function to
record sales. It has a capacity of 6 layers and 9 springs per layer which can carry up to 9
products each. The general size of the machine can carry 486 pieces of products
depending on the size. The manufacturer provides the option of customizing the machine
depending on the specifications that the customer would demand. The researchers plan to
have the machines customized in such a way that it only accepts bills up to P50.00 and
the smallest coins up to P1.00 only. This is because the change fund that the machine can
carry is only small and is limited to coins. Pictures of the sample machines are shown at
the end of this chapter under Exhibit 8.
Location
The proposed project will be located at South Philippine Adventist College Km.
68, Camanchiles, Matanao, Davao del Sur. The machines are to be placed in the Junior
Academy Building, Senior Academy Building, and lobby inside SPAC campus as shown
in Exhibit 9 and Exhibit 10.
Layout
Exhibit 11 shows the layout of the vending machine.
The vending machine has six layers. The plan is that one layer will be allotted for
each product except for QD Water which will have two layers. Each layer consists of 9
spring coils and each spring holds 9 items. Thus, the capacity of each layer is 81
products. The products can be purchased by a coins or bills. It has a patented triple anti-
theft drawer to ensure the safety of goods and money. The back portion called a
backstage contains the functions to monitor sales and machine status. Data will be
safeguarded automatically when power fails.
63
Capacity/Scheduling
The business’ capacity will depend on the capacity of the vending machines to
carry goods. The vending machine has 6 layers, with each layer carrying 9 springs which
by itself can carry 9 units of product. Therefore one vending machine is capable of
carrying 486 units of products. Ideally, each of the five products would be allotted a layer
with 2 going to QD Bottled Water. However since the expected total demand will not be
equal to the total full capacity of the machine, the chosen capacity for the business is now
simply dependent on the unmet demand per product. As long as the unmet demand does
not reach the full capacity of the machine, no re-allocation and designation of areas for
the products would be strictly implemented. As long as the goods are stocked properly
and are visible to customers then (meaning all layers should be filled at least by half), it
will be acceptable.
Except for Soya Milk, all product capacities are based on the unmet demand. The
case of soya milk is unique because it carries a short shelf life. According to the store
supervisor, the ordered milk from Davao Mission should be sold within 4 to 5 days after
upon deliver. Because of this only the portion of the weekly demand that is allotted for 5
days is deemed as capacity. Table 12 below shows the details of the capacity of the
business.
64
Table 12
12 Capacity of the Business
School Calamansi Soya QD

Dutch Mill Chuckie
Year Juice Milk Water
Year 1 9,302 25,978 79,248 39,416 57,565
Year 2 10,303 28,577 86,981 43,398 63,292
Year 3 11,364 31,206 94,668 47,453 69,063
Year 4 12,497 33,904 102,436 51,640 74,967
Year 5 13,691 36,633 110,158 55,900 80,914
Source: Appendix 19
The business will operate from Saturday night at 5:30 pm to Friday afternoon at
5:30 pm due to the religious observance of the school. Table 13 shows the schedule of the
business operation.
Table 13
13 Schedule of Business Operation

Business Schedule
4:00 AM – 6:00 AM -Cleaning the vending machine and its surroundings
11:00 AM – 1:00 PM -Restocking the vending machine
4:00 PM – 5:00 PM -Collecting, remitting cash and replenishing of change fund
24/6 Hours -Operation of the buiness
Source: Appendix 12
It should be noted however that the business schedule will slightly change over
the years since the number of restocking per day may increase for some of the products to
cope up with the unmet demand. The plan is to add the task of restocking on the morning
or in the afternoon if the product needs to be restocked twice per day. For the coverage of
this study, no such event is required yet. Since the machine will still not be completely
product filled even until the fifth year.
65
Purchase Cost
Purchase cost represents the amount paid to acquire the inventory of the venture
which is the drinks. The prices used to project the expenses are based on an interview
with the current Store Supervisor, Ms. Joan Bombeo. Based on their contract and
agreement with the distributors, the purchase price for Calamansi juice is P15.00. For
Soya milk it is P25.00. Dutch Mill is purchased at P9.50, Chuckie at P20.00 and QD
bottled water at P7.50.
Table 14 shows the projected purchase cost in a year. The total price of Soy Milk,
Calamansi Juice, Dutch Mill, Chuckie and QD Water are ₱649,440.66; ₱ 139,528.10; ₱
725,857.02; ₱ 788,321.74; and ₱ 431,735.40 respectively.
Table 14
14 Purchase cost of the Business –Year 1

Item Price Quantity Total
Calamansi Juice ₱ 15.00 9,302 ₱139,528.10
Soy Milk 25.00 25,978 649,440.66
Dutch Mill 9.50 79,248 752,857.02
Chuckie 20.00 39,416 788,321.74
QD Water 7.50 57,565 431,735.40
Total ₱2,761,882.92
Source: SPAC Store, Appendix 19
Table 15 shows the five-year cost per product. The proponents used the projected
increased inflation rates of Appendix 10 for the year 2020-2024.
66
Table 15
15 Projected Purchase Cost per unit

Inflation Calamansi Soya Dutch Chuckie QD Bottled
Item
Rate Juice Milk mill Water
Year 1 ₱ 15.00 ₱ 25.00 ₱ 9.50 ₱ 20.00 ₱ 7.50
Year 2 3.06% 15.46 25.77 9.79 20.61 7.73
Year 3 3% 15.92 26.54 10.08 21.23 7.96
Year 4 3% 16.40 27.33 10.39 21.87 8.20
Year 5 3% 16.89 28.15 10.70 22.52 8.45
Total
Source: SPAC Store, Appendix 10
Waste Disposal
SPAC Vending Machine venture will provide waste baskets to improve the
collection of wastes every day. The vendo workers will separate the biodegradable from
non-biodegradable such as Dutch Mill or Chuckie and its plastic straws as well as
segregate all the other trash that was not thrown in its appropriate place. The
biodegradable wastes will be managed according to the policies of the school and the
non-biodegradable wastes will be gathered in trash bags which will be collected by the
municipal garbage management in order to maintain the cleanliness of the surroundings.
Plastic bottles are also to be segregated and can be sold by the school.
Utilities and Other Operating Cost
The proposed business will incur electricity expense which is necessary in the
operation of the business. The average cost of one kilowatt per hour (kWh) in Matanao is
₱9.45. This is multiplied by the rate of 1.1 since equipment will be placed inside the
SPAC campus. This is a policy for electrical charges inside the campus. This brings the
average cost to ₱10.395 per kWh. In the article of Michael Bluejay (2015), to compute
the kilowatt-hours, multiply the watts times the hours used then divide by 1000. The
hours used by the vendo is 24 hours multiplied by seven days then multiplied again by
67
four weeks. The 500-watt vending machines has kilowatt per hours of 336kWh, a total of
1,008kWh for the three vendo. The estimated electricity expense of the business for the
first year is 1,008kWh times ₱10.395 or ₱10,478.16 The electricity expense will then be
multiplied by the inflation rate each year as shown in Appendix 10.
Water costs for the proposed venture would mostly be used for mopping and
cleaning the vending machine premises. Due to this cause, the researchers set at the
minimum amount of water charge of P120.00 per month or P1,440.00 per year.
A contingency fund for gasoline is also set up to provide for occurrences of power
outage and black outs. As suggested by the Business Office who keeps record of the
gasoline charges for the generator an amount of P2,000.00 per year would be sufficient
for this cause.
Table 16 shows the expense for utilities that would be incurred by the proposed
business.
Table 16
16 Utilities Expense
Date Electricity Water Gasoline Total
Year 1 ₱ 10,478.16 ₱ 1,440.00 ₱ 2,000.00 ₱ 13,678.19
Year 2 10,798.79 1,484.06 2,061.20 14,096.71
Year 3 11,122.76 1,528.59 2,123.04 14,519.61
Year 4 11,456.44 1,574.44 2,186.73 14,955.20
Year 5 11,800.13 1,621.68 2,252.33 15,403.86
Source: https://michaelbluejay.com, SPAC Business Office, Appendix 10
Supplies. The researchers came up with a listing of supplies that will be necessary
for the venture as shown in Table 17. This will increase each year according to the
inflation rates shown in Appendix 10.
68
Table 17
17 Supplies Expense
Item Quantity Price Total
Microfibre Clean Cloth 36 Pcs. ₱20.00 ₱720.00
Collection Bag 1 Pc. 40.00 40.00
Supplies Organizer 2 Pcs. 65.00 130.00
Trash Bag 160 packs 23.00 3,680.00
Trash Can 6 Pcs. 185.00 1,110.00
Spray 3 Pcs 86.00 258.00
Disinfectant Cleaner 12 Liters 68.00 816.00
Detergent Bar 6 Bars 25.00 150.00
Soap Holder 3 Pcs. 25.00 75.00
Clothes Clip 3 Pcs. 15.00 45.00
USB Flash Drive 1 Pc. 149.00 149.00
Styrofoam Box Cooler 2 Pcs. 210.00 420.00
₱7,593.00
Source: Lazada
The total amount of cleaning and operating supplies is ₱7,593.00. It will be
bought once a year.
Advertising and promotion expense. The cash budget for advertising and
promotion will be worth ₱430.00. The P400.00 will be promotional and instructional in
the form of tarpaulin that contains instructions on how to use the machines properly.
P30.00 will be for the ribbon-cutting. This will only be spent on the first year of operation
and will be part of the pre-operating expenses.
Miscellaneous expense. Unexpected costs in the future such as stock-outs of
supplies and other emergency needs is allotted a fund of ₱2,000.00.
Salaries and wages. Compensation for working students will be paid based on
the school policy. This will be discussed further in the next chapter.
Repair and Maintenance expense. Repairs and Maintenance will be budgeted at
₱10,000 per year based on the answer of Mrs. Mercelee Perez, HRMD Director of
Brokenshire College according to the interview made on the vending machines in their
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school. However this will only start on the second year since the machine has a warranty
period of 1 year.
Product Price. Since the vending machines are under the management of the
SPAC Store, the former will adopt the pricing policy of the latter. The next table (Table
18) shows the pricing system of the business.
Table 18
18 Pricing system of the business

Item Price
Calamansi Juice ₱ 20.00
Soy Milk 30.00
Dutch Mill 12.00
Chuckie 25.00
QD Water 10.00
Total
Source: SPAC Store
70
Exhibit 8
8 Equipment and Supplies
Microfibre Clean Cloth
Trash Bag
Vending Machine Trolley
Trash Can Spray Disinfectant Cleaner Detergent Bar
71
Soap Holder Collection Bag Clothes Clip Cleaning Supplies Organizer
Safety
Breaker Flash drive
ribbon
Styrofoam Box Cooler Concrete Cable Clip Electricity Meter
72
Outlet Electrical Wire
73
Exhibit 9
9 Location Map
74
Exhibit 10
10 Location of Vendo
SPAC Lobby
Senior Academy Building
Junior Academy Building
75
Exhibit 11
11 Lay-out
76
CHAPTER 4
ORGANIZATION AND MANAGEMENT STUDY
This chapter deals about the entire organizational management and development
of the proposed business. It provides information about the following: type of business
organization, organizational structure of the business including the number of personnel
needed to start the operation, qualifications of the employees, compensations, and the
projected timetable before the project will be implemented.
Forms of Business Organization
Determination of the form of organization is important since this will determine
the relevant aspects concerning the business such as tax effect, liability, etc. The
proposed business will be operating in a form of corporation under the management of
SPAC Store.
Organizational Structure
An organizational structure is a system that shows how certain activities of a
business are directed from hierarchy of authority and responsibility of the board of
directors down to the line staff as discussed below.
The Board of Trustees and SPAC President are reflected but they will not
receive any remuneration from the venture.
The store supervisor will be working under the administration of the school,
reporting to the Vice President for Finance regarding income and expenses and reporting
77
to the Vice President for Student Services regarding store operations. He/She ensures that
the vending machines operate efficiently and profitably. He/She will also be responsible
to train, give instructions, oversee the work or performance of subordinates, and will be
charged with ensuring that great customer service will be offered by the vendo worker.
The vendo workers, which are the working students, will be tasked to replenish
and check the stock levels of the machine. They will be responsible for the collection of
sales money and the cleanliness of the vending machine and its surroundings.
The organizational chart of the proposed project is plainly presented below in
Figure 5.
Figure 5
5Organizational chart of the proposed business
78
Personnel Requirement
SPAC Vendo does not need a lot of employees directly involved in its operation.
There are only three personnel requires to manage the proposed project which are the
supervisor and two vendo workers.
The proposed number of personnel for the initial five years of operation will be
shown in Table 19.
Table 19
19Personnel Requirement
Job Position Year 1 Year 2 Year 3 Year 4 Year 5
Store Supervisor 1 1 1 1 1
Vendo Worker 2 2 2 2 2
Total 3 3 3 3 3
Source: Appendix 12
Qualification Standards
The proposed business will need good, truthful, and dedicated employees. A
summary of job qualification is presented in Table 20.
Table 20
20 Employees’ Qualifications
JOB POSITION JOB DESCRIPTION PERSONAL SKILL EXPERIENCE
Store Supervisor - Oversees daily - Good working Have practical
operation knowledge about knowledge about the
- Responsible in cash the business. machine.
count and checking
sales records.
- Train and direct the
vendo workers
Vendo Workers - Check the stock levels - Flexible Have practical
and refill the vendo. - Positive and knowledge about the
- Cash collection pleasant machine.
- Cleanliness of the demeanor.
vendo
Refer to Appendix 12
79
Compensation Package
Another significant matter to be considered in business is developing and
implementing a compensation package for the employees to be motivated and become
effective in work. It is also necessary to give them compensation based on the law and
policies of the school.
The current Store Supervisor is already earning a basic pay for her management
of the College Store. Based on projected gross profit information of the store and
computed gross profit of the proposed venture, a portion of the current salary of the Store
Supervisor is allocated as salaries expense of the vending machine management. The
current salary of the Store Supervisor is P18,000.00 plus benefits of P4,500.00. Based on
Appendix 22, salary allocation therefore would be at least P3,243.76 per month.
For the working students, as per the working student application in Appendix 11,
they are entitled to receive 20 pesos per hour with a maximum of 5 labor hours per day
for a total of 100 pesos. This is also the fixed compensation for the labor of the vendo
workers. Table 22 shows the annual compensation package of all employees.
Table 21
21Annual Salaries and Benefits

Per Employee No. Daily Monthly Yearly
Store Supervisor ₱ 3,243.76 1 - ₱ 3,243.76 ₱ 38,925.16
Vendo Workers 100.00 2 ₱ 200.00 4,800.00 57,600.00
Total ₱ 96,525.16
Source: Appendix 11, Appendix 21
The researchers also assume that every year, wages of the employees would
increase by inflation rate each year as shown in Appendix 10.
80
Projected Timetable
The projected time table will show the break down phases from planning to
implementation. Enumerated below are the steps designed to hasten and make a smooth
implementation of the proposed project. These are placed in a Gannt chart presented in
Figure 6.
Preparation of Feasibility Study. Before the addition of this venture, the
researchers conducted a feasibility study for six (6) months starting June with a budget of
P5,000.00. The initial survey illustrates the potentials of the business. This procedure
includes data gathering and preparation of marketing, technical, and financial in studies
using descriptive and exploratory method until its findings. Table 22 shows the itemized
expenses related to the feasibility study.
Table 22
22Business Research
Expenses Amount
Survey & Interviews (Transportation, etc.) ₱ 1,000.00
Printing 2,000.00
Bookbinding 1,200.00
Other Documentation Expenses (CDs, etc.) 800.00
Total ₱ 5,000.00
Source: Grandmall Octagon, Mindanao Star, 3A Photocopying Center(Digos)
Formal Organization. The formalities associated with the business will be with
regards to its set-up. The necessary documents that will be required to operate the
proposed business will also need to be complied with. This includes the formal approval
of the Administrative Committee with regards to the acquisition and installation of
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vending machines inside the campus. Local permits will not be required anymore since
the venture will be under the school’s permit to operate. Depending on the requirements
of the Committee, this may take at least one to two (1-2) months.
Preparation of the location and Recruitment of Employees. Specific location
of the machines must be identified properly in order to start its operation. This process
includes the acquisition and installation of the materials needed for the machines. It will
also be the phase of recruiting working students.
Acquisition of Equipment. One (1) month before the start of operation, the
materials needed must be ready and all set. For this, the contracts with the suppliers must
be finalized in order to ensure that inventory is available when the machines arrive.
Simultaneously, the machines need to be ordered in advance from the manufacturers.
Delivery of machines from China to the Philippines will take approximately one (1)
month as well.
Installation and Promotion. Upon arrival of the machines, technical installation
will commence. This will include tests and trials of its functionalities. Total installation
costs would amount to P19,793.00. This amount will be included in the total cost of the
machine and will be depreciated annually.
Promotional activities in the form of tarpaulin instructions on how to use the
machines will be also be placed beside the machines to properly orient and teach
interested customers with regards to the correct usage of the machine. This will cost up to
P400.00 and may take one (1) month to accomplish.
Start of Operation. Finally, after all the previous preparations are accomplished,
the proposed project could start its operation symbolizing through a blessing and cutting
82
of ribbons which will cost up to P30.00. Since the reporting date of SPAC Financial
Statements is March, the operations of the vendo will commence in the month of April.
Figure 5
Activities 1 2 3 4 5 6 7 8 9 10 Operatio
M M M M M M M M M M n
1. Preparation of Feasibility Study

2. Formal Organization
3. Preparation of the location / Recruitment
4. Acquisition of Equipment
5. Installation and Promotion
6. Start of Operation
6 Gannt Chart of the Proposed Business
83
CHAPTER 5
FINANCIAL STUDY
This chapter centers on ascertaining the financial feasibility and viability of the
proposed business. The data gathered from the previous chapters will be translated in
terms of monetary figures.
This section assesses the financial aspects of starting and running a business for a
five (5) year projected period. It discusses the major assumptions, amount of capital
required to finance the project, the sources of funds, and the preparation of the financial
statements. Along with the quantitative information are the narratives that explain the
assumptions and how the line items were computed.
Major Assumptions
The researchers used major assumptions in facilitating the five-year financial
projection. These assumptions are supported by verifiable data gathered from the survey
conducted, interviews and from figures compiled from statistical reports. These
assumptions are discussed as follows:
Sales. Sales for the first year of operation will be based on the computed market
share of the proposed venture presented in Chapter 2 of this book. All sold products are
on cash basis all throughout the year. Sales price will increase yearly according to
inflation rates in Appendix 10.
Inventory. Assuming that the ordered drink inventories arrive at the onset of the
period it is being demanded, the ending inventory at the close of every year will be one
day’s worth of inventory kept inside the vending machines (all three) after the last
84
restocking. This is derived from the purchase cost of the specific year that it was ordered.
Below is a table showing the amount of ending inventory per year.
Table 23
23 Ending inventory
Calamansi Chuckie QD Water Total
Date Soya Milk DutchMill
Juice
Year 1 ₱ 484.47 ₱ 2,706.00 ₱ 2,614.09 ₱ 2,737.23 ₱ 1,499.08 ₱ 10,040.87
Year 2 553.01 3,067.81 2,956.97 3,105.98 1,698.66 11,382.43
Year 3 628.27 3,450.55 3,314.85 3,498.08 1,909.15 12,800.91
Year 4 711.67 3,861.43 3,694.45 3,920.93 2,134.52 14,323.01
Year 5 803.06 4,297.40 4,092.12 4,371.72 2,372.99 15,937.29
Source: Appendix 20
Pre-operating Costs. Pre-operating costs are expenses which are incurred before
the commencement of business operations. The business will spend ₱5,000.00 before the
start of the operations for business research and ₱430.00 for initial tarpaulin costs
regarding instructions on how to use the vending machines and as a form of
advertisement as well.
Promotion and Advertising. The proposed venture allocated an amount of
₱430.00 on the first year of operations for this type of expense. Due to its nature, this is
already included in the pre-operating costs.
Operating Costs. The major assumptions applied to the estimation of the
operation costs of the venture were already discussed in Chapters 3 and 4. The following
are further explanations on these assumptions
Electricity Expense. Cost of electricity for first year is ₱10,478.16. It will
increase annually due to inflation as shown in Appendix 10.
85
Water Expenses. Water expenses to be incurred will be based on the minimum
monthly charge of ₱120.00. For the first year it will be ₱1,440.00. It is also assumed to
increase based on the inflation rate.
Salaries and Benefits. The working students would receive an allotment of
₱57,600.00 on the first year while the store supervisor’s salary of ₱38,925.16 would be
attributable as salaries expense of SPAC Vendo in the first year of operation. It will
increase annually due to inflation as shown in Appendix 10.
Depreciation Expense. Depreciation is computed to show the value of the
equipment as years go by. Straight line depreciation method will be used in computing
the depreciation of equipment. Depreciation expense would only be for the vending
machines themselves since the Trolley will be an outright expense. Depreciation expense
for the first year is at ₱40,242.70.
Miscellaneous. To cover other important costs and meet unexpected expenditures
for the future, miscellaneous expense is budgeted at ₱2,000 every year.
Supplies Expense. For the first year, the supplies expense started on ₱7,593.00
and shall increase by the inflation rate as presented in Appendix 10. This will mostly be
used for cleaning and other operational purposes.
Repairs and Maintenance. There would be ₱10,000 repairs and maintenance
expense budgeted annually. This will start on the second year since the machine has a
warranty period of 1 year.
Gasoline Expense. This fund is to set aside for possible black-outs, ₱2,000.00 for
the first year of operations as suggested by the Business Office. An increase amount due
to inflation is also included in the computations.
86
Change Fund. A change fund should be kept, maintained and monitored by the
workers daily. Non-monitoring of change fund would stop the machine from working
since it will not be able to dispense any change. The machines can only hold a small
amount of change fund, limited to 500 pieces of coins. For this P1,800.00 per machine is
allotted. 300 pieces of P1.00 coins, 100 pieces of P5.00 coins and 100 pieces of P10.00
coins.
Income Tax Expense. Since the proposed undertaking will be under the
ownership and management of SPAC and since SPAC is considered a non-profit
organization, no income tax charges will be computed for the income from the vending
machines.
Capital Requirement/Investment
This part of the financial study presents the initial investment and the capital
requirements which includes pre-operating expenses, operating expenses/working capital
for 3 months and capital expenditures.
Table 24
24 Capital Requirement of the Proposed business

Pre-operating Expenses
Business Research ₱ 5,000.00
Promotion & Advertising 430.00
Total Pre-operating Expenses ₱ 5,430.00
Working Capital
Supplies Expense 3/12 ₱7,593.00 ₱1,898.25
Purchases 3/12 2,761,882.92 690,470.73
Miscellaneous 3/12 2,000.00 500.00
Repair/Maintenance 3/12 10,000.00 2,500.00
Salaries 3/12 96,525.16 24,131.29
Utilities 3/12 13,918.16 3,479.54
Change Fund 3 1,800.00 5,400.00
Total Working Capital ₱728,379.81
87
Capital Expenditure
Equipment ₱390,607.00
Trolley 1,182.00
Total Capital Expeniture ₱ 391,789.00
Total Initial Capital ₱ 1,125,528.81
Refer to Table 11, 14,16, 17, 21, & 22
The table above shows the cost of the Pre-Operating Expense of P5,430.00,
Capital Expenditure of P391,789.00 and Working Capital of P728,379.81.
Source of Financing
South Philippine Adventist College will provide for the capital requirement of the
proposed business. The letter of financing is shown in Appendix 14.
Preparation of the Financial Statement
The financial statements are composed of income statement which shows the
operating results; the balance sheets which show the financial condition of the business;
and the cash flow of the proposed venture within the five-year operation.
Projected Income Statement. The income statement is a formal statement
showing the financial performance of the enterprise for a given period of time. It
summarizes the revenues earned and expenses incurred for the period of time. Table 25
shows the projected income statement for the five years. Detailed computations are
shown in Appendix 15.
88
Table 25
25 Income Statement
1st year 2nd year 3rd year 4th year 5th year
3,477,392.9 3,942,037.7 4,433,346.6 4,960,568.6
Sales 5,519,745.39
2 9 9 2
2,804,562.9 3,191,463.9 3,581,922.9 4,000,859.4
Cost of Sales 4,445,164.44
1 7 0 3
Gross Profit 672,830.01 750,573.82 851,423.79 959,709.19 1,074,580.95
Operating
112,988.16 110,788.24 114,051.88 117,413.44 120,875.84
Expenses
Net Income 559,841.86 639,785.58 737,371.90 842,295.75 953,705.10
Source: Appendix 15, 23 & 24
Figure 7 shows the

movement of income for year
1 up to year 5.
Figure 7
7Movement of Income
Projected Cash Flow Statement. A cash flow statement is a basic component of
the financial statements summarizing the operating activities, investing activities, and
financing activities of the proposed business. It provides information about the cash
receipts and cash disbursement of an entity during a period.
89
Operating Activities include the transactions and events that enter into the
determination of net income. It is derived from the principal revenue producing activities
of the entity.
Investing Activities refer to the purchase of non-current assets to be used by the
business.
Financing Activities includes transactions and events undertaken by the entity in
achieving economic objectives. The year-end balance of cash is increasing as reflected in
Table 26.
Table 26
26Statement of Cash Flow

Net Income 559,841.86 639,785.58 737,371.90 842,295.75 953,705.10
Depreciation 40,242.70 39,060.70 39,060.70 39,060.70 39,060.70
Increase/Decrease in Change
(5,400.00)
Fund
Increase/Decrease in Inventory (10,040.87) (1,341.56) (1,418.48) (1,522.10) (1,614.29)
Increase/Decrease Liability - - - - -
Net Cash Inflow/Outflow from
584,643.69 677,504.72 775,014.12 879,834.35 991,151.52
Operating Activities
Purchase of Equipment 391,789.00 0 0 0 0
(391,789.00) - - - -
Investing Activities
Initial Capital 1,125,598.81 0 0 0 0
1,125,598.81 - - - -
Financing Activities
Net Increase/Decrease in Cash 1,318,453.49 677,504.72 775,014.12 879,834.35 991,151.52
Cash Balance Beginning 0 1,318,453.49 1,995,958.22 2,770,972.34 3,650,806.69
Cash Balance Ending 1,318,453.49 1,995,958.22 2,770,972.34 3,650,806.69 4,641,958.20
Refer to Table 11, 23, 24, 25,
Figure 8 shows the
movement of cash from
year 1 up to year 5.
Figure 8
90
8Movement of Cash
Projected Balance Sheet. This shows the assets of the project and the
corresponding liabilities and capital. It is an overall picture of the firm’s financial
condition at a certain point in time. Table 27 shows the projected statement of financial
position for five years and reveals that the proposed business is capable in generating
profits.
Table 27
27Balance Sheet
Cash 1,318,453.49 1,995,958.22 2,770,972.34 3,650,806.69 4,641,958.20
Change Fund 5,400.00 5,400.00 5,400.00 5,400.00 5,400.00
Inventory 10,040.87 11,382.43 12,800.91 14,323.01 15,937.29
Machinery 391,789.00 391,789.00 391,789.00 391,789.00 391,789.00
Accumulated
(40,242.70) (79,303.40) (118,364.10) (157,424.80) (196,485.50)
Depreciation
Total Assets 1,685,440.67 2,325,226.25 3,062,598.15 3,904,893.89 4,858,599.00
Tax Payable - - - - -
Total Liabillities - - - - -
Beginning Capital 1,125,598.81 1,685,440.67 2,325,226.25 3,062,598.15 3,904,893.89
Net Income 559,841.86 639,785.58 737,371.90 842,295.75 953,705.10
Total Equity 1,685,440.67 2,325,226.25 3,062,598.15 3,904,893.89 4,858,599.00
Total Liabillities and Equity 1,685,440.67 2,325,226.25 3,062,598.15 3,904,893.89 4,858,599.00
Refer to Table 11, 23, 24, 25 & 26
The Statement of Financial Position or Balance Sheet shows that the condition of
the Assets, Liabilities, and Owner’s Equity of the projected five years of operation is
flexible and has the ability to generate profits.
91
Financial Analysis
To accept or reject the project is determined through financial analysis. The
general purpose of financial statements contains the historical information about the
firm’s financial condition, operating results, and other business activities. This study
determines the profitability of the proposed business. It assessed and evaluated the
statement of the firm’s past performance, present condition, and future business potential.
Profitability Ratio. This is to indicate how well the business performs in terms of
its ability to generate profit. It is used to compare if the profit earned by the business is
enough compared to its assets.
Table 28
28Return on Sales
Year Net Income Sales ROS
Year 1 559,841.86 3,477,392.92 16%
Year 2 639,785.58 3,942,037.79 16%
Year 3 737,371.90 4,433,346.69 17%
Year 4 842,295.75 4,960,568.62 17%
Year 5 953,705.10 5,519,745.39 17%
Average 17%
Refer to Table 25
Return on Investment. It measures the profitability whether or not the business
is using its resources in an efficient manner. Table 30 shows the return on investment.
Table 29
29Return on Investment
Total
Year Net Income ROI
Investment
Year 1 559,841.86 1,125,598.81 50%
Year 2 639,785.58 1,685,440.67 38%
Year 3 737,371.90 2,325,226.25 32%
Year 4 842,295.75 3,062,598.15 28%
Year 5 953,705.10 3,904,893.89 24%
92
Average 34%
Refer to Table 25 & 27
Gross Profit Ratio. Gross profit ratio indicates the high profitability of the
proposed business. It is to examine the ability of a business to create sellable products in
an effective manner. Table 30 shows the Gross Profit ratio.
Table 30
30Gross Profit Ratio

Gross Profit
Year Gross Profit Net Sales
Ratio
Year 1 672,830.01 3,477,392.92 19%
Year 2 750,573.82 3,942,037.79 19%
Year 3 851,423.79 4,433,346.69 19%
Year 4 959,709.19 4,960,568.62 19%
Year 5 1,074,580.95 5,519,745.39 19%
Refer to Table 25
Liquidity Ratio. This is the ability of a business to pay its short-term debts. Since
the venture has not incurred any liabilities, there is no need to compute for this ratio.
Test of Return on Capital Investment. The payback period is a measure of the
expected number of years needed to recover the total cash investment on the project.
Table 31 shows the payback period.
Table 31
31Payback Period
Initial Investment Time needed for
Year Cash Flow
Running Balance Payback
₱1,122,598.81
Year 1 540,995.12 ₱584,643.69 1
Year 2 -0- 677,504.72 0.80% of 12 months
Year 3 775,014.12
Year 4 879,834.35
Payback Period 1 Year & 10 months
93
Net Present Value. The net present value gives a measurement of the excess of
the present value of cash returns discounted over the total amount of investment on the
project. A positive net present value means a better return, and a negative net present
value means a worse return, than the return from zero net present value.
The 6% discount rate used by the researchers from Bangko Sentral ng Pilipinas
Published rates as of September yields a positive Net Present Value for the business
(Appendix 21). This means that the present value of all future cash flows expected to
enter the business in the next 5 years is more than sufficient to cover for the initial
investment.
Table 32
32Net Present Value

Year (Investment) / Net Cash Flows Present Values @ 6%)
Year 0 (₱1,122,598.81) (₱1,122,598.81)
Year 1 ₱584,643.69 551,633.91
Year 2 677,504.72 603,158.86
Year 3 775,014.12 651,011.56
Year 4 879,834.35 697,332.14
Year 5 991,151.52 741,205.30
Net Present Value ₱2,118,742.97
The initial cost of investment is only ₱1,122,598.81. The result shows a positive
difference; thus, the project is considered acceptable by the researchers.
Internal Rate of Return. The internal rate of return is the average annual return
earned through the life of an investment and is computed in several ways. If the IRR is
higher than the desired rate of return on investment, so the project is a desirable one.
However, it is a mechanical method and not a consistent principle.
94
Table 33
33Internal Rate of Return

Year (Investment) / Net Cash Flows
Year 0 (₱1,122,598.81)
Year 1 551,633.91
Year 2 603,158.86
Year 3 651,011.56
Year 4 697,332.14
Year 5 741,205.30
Internal Rate of Return 47%
Computed using Microsoft Excel IRR Function
95
CHAPTER 6
SOCIO-ECONOMIC DESIRABILTY
As part of business world, we care not only in maximizing profit, but we have
identified other necessities that we can offer not only to our target market but also to the
society and economy as a whole. Many types of personalities exist like community,
customers, suppliers of products, working students, church and competitors, which have
different views that businesses can also facilitate.
This chapter talks about the impact of the proposed business socio-economically.
The researchers will prove that the intended project will be socially and economically
desirable as it contributes to the improvement of the various sectors of its society and
environment.
Consumers/community/society
In a business, consumers are the most important factors for any organization.
They are the resource upon which the success of the business depends. The proposed
services are advantage to the students, faculty and staff members, and community
because this would be convenient and promote healthy lifestyle in a sense that the
products in the vending machine are mostly and relatively healthy drinks.
The business will also assure a good and fair service to them. Honesty in the
quality and quantity of the offered products will be emphasized in the business. The
consumers will be given the opportunity to give their feedbacks and suggestions about
96
the products and services and the business will do its best to listen and to respond to their
suggestions and concerns immediately and accurately.
Employees
The business will employ one (1) manager, and one (2) maintenance personnel to
check and to refill the products in the vending machines.
The welfare of the employees is given considerations since they are ones who
would be helping the business in many ways. This will motivate them to work hard, give
their best effort, be honest, and be loyal in the business.
Creditors/Suppliers
The benefit of the business and supplier is congruent as they must establish and
maintain a good relationship. The suppliers and creditors can provide the business with
initial stocks for production and as the business will operate, they need supplies that they
could acquire from different resources and be a good client to them. Being honest and
fair with each other will be a key of efficient fulfillment of obligation between the two
parties. The business will also make sure to pay its obligations to its creditors/suppliers
promptly.
Owner
The proposed project will be an additional source of income to the school South
Philippine Adventist College. Through efficient operation of the project, the school will
definitely recover its investment. In the selection process it is important to select people
that will become more active and will show their true commitment to the proposed
business and would be able to do their duties and responsibilities.
97
Aside from generating income and recovering the capital, they can also attain a
level of improved social standing, credibility, and technology. This business will bring
satisfaction, happiness and contentment because aside from gaining income they can also
help others by providing drinks convenient 24 hours for at least 6 days.
98
CHAPTER 7
FINDINGS, CONCLUSION AND RECOMMENDATION
This chapter discusses the whole study on “The Feasibility and Viability of
Putting-up Vending Machines at South Philippine Adventist College - campus”. This
chapter aims to restate findings, state conclusion and present the recommendation as
evaluated.
Findings
This business, if organized and managed well, will come a long way to
nurture the skills and talents of the younger generation by providing them bright
opportunities that lies ahead. These findings are the answer to the central problem of the
study. The study was carefully constructed and investigated by gathering enough
resources to strengthen the stated objectives. All areas were considered, the marketing,
technical, organization, management, and the financial aspects of the project. Below are
the findings and the result of the study.
Marketing. The SPAC Vendo will offer vending machine services for specific
drink products which are soya milk, dutch mill, calamansi juice, chuckie and QD water.
The management will give satisfaction to their customers by giving them 100% quality
services with a good quality product at a friendly and affordable price.
99
To determine the demand, the researchers conducted surveys and interviews with
the target market. It was based on the willingness, capability and patronage of the
customers who will patronize the product being offered. It was found out that ninety five
and forty-six percent (95.46%) of the faculty and staff respondents, ninety six and sixty-
three percent (96.63%) of the junior high department respondents, ninety eight and
seventy percent (98.70%) of the senior high department respondents, eighty nine and
nineteen percent (89.19%) of the college department respondents, and in overall ninety
four and thirty-one percent (94.31%) respondents interviewed are willing to patronize the
services being offered.
Production/Technical. It deals on the process of the business operation. This
includes the equipment, furniture and fixtures, materials to be used, other technical
information such as the location where the business will be put up, the building layout
and floor plan, utilities, and other operation costs that are necessary in the operation of
the business.
The proposed business will be located at South Philippine Adventist College
campus, Km. 68 Camanchiles, Matanao Davao del Sur. The business will spend
P390,607.00 to purchase and install the needed machines.
Organization and Management. After analyzing the advantages and
disadvantages of certain type of business organizations, the researchers determined that
being under the operations of SPAC is suited for this kind of venture. The organization is
composed of store supervisor who takes charge and supervise the venture, and 2 vendo
workers.
100
The primary manpower needed would require two employees including the
manager for the daily business activities. All qualification standards have been purposely
considered for the workers to be fitted to the position in this type of business.
Finance. Based on the capital budgeting techniques and financial analysis tools
used, the proposed business is proven to be financially acceptable for its profitability,
liquidity, and stability. An initial capitalization of P1,125,598.81 is required to realize the
project and this would cover the entire investment.
The financial study of the business proved that the business would be profitable
for the next five (5) years. The income statement shows its profitability. A good current
ratio signifies that the current asset will be adequate to sustain currently maturing
liabilities. Based on the financial analysis, the proposed business is financially
acceptable.
Socio-Economic Desirability. The proposed business will not only focus on
gaining profit but would also greatly help the social economics benefits to the community
itself, the customer, the government, the creditors, and the society in which the business
is to operate. It will open job opportunities for the working student and the taxes paid to
the government and the net income for the owner are some factors that shows that this
business is socially and economically desirable.
Conclusion
With all the considerations studied and analyzed in terms of marketing, technical,
organization and management, and financial aspects of the proposed business, the SPAC
Vendo business will make itself abreast by taking disadvantage of its opportunities and
strengths. The business is not only concerned with profit maximization, but also in terms
101
of economic and social benefits that can be offered to the community and government as
a whole.
The researchers have full confidence and highly endorses the establishment of the
SPAC Vendo business.
Based on the study conducted, the researchers concluded that the proposed
venture, establishing a vending machine at SPAC campus is feasible and viable in the
market.
Recommendation
After bearing in mind the significant factors in the study that the researchers
conducted such as marketing, financial, technical and management, and socio-economic
study, it is therefore recommended that SPAC Vendo will be pursued, and the business be
established at South Philippine Adventist College campus.
The feasible findings of this study enabled the researcher to recommend the
prospective investor the establishment of SPAC Vendo as soon as possible from the time
accomplishment of this study minimize the changes on the data that will occur in the
future time.
The researchers would also recommend that for this kind of business, it may be more
advantageous to purchase the products by bulk for a higher gross profit rate.
102
References
Alminar-Mutya, R. (2015). Elements of Marketing (Fifth Edition). Mandaluyong City: National Book Store.
Avila-Bato, M., Malveda, L., & Marcelino, R. (2015). Micro Econonomics Simplified. Mandaluyong City: National Book Store.
Baker, M. J. (2003). The Marketing Book Fifth Edition. Burlington MA 0183: Butterworth-Heinemann.
Children's Hospital Colorado. (2019). 10 Benefits of Drinking Chocolate Milk for Nutrition Recovery. Retrieved from Children's Hospital
Colorado: https://www.childrenscolorado.org/conditions-and-advice/sports-articles/sports-nutrition/10-benefits-of-drinking-
chocolate-milk-for-nutrition-recovery/
Coinadrink Ltd. (2014, January 10). The Many Benefits of Having a Vending Machine in your Workplace. Retrieved from https://coin-a-
drink.co.uk/2014/01/the-many-benefits-of-having-a-vending-machine-in-your-workplace/
Durden, O. (2019, February 6). Step-by-Step Process of How a Vending Machine Works. Retrieved from
https://smallbusiness.chron.com/step-by-step-process-vending-machines-works-5180.html
Easley, T. (2019). Vend: Notes on the Silent World of Tokyo’s Vending Machines.
Figueroa, T. (2015). Vending Business: Profitable Business in the Philippines. Retrieved from
https://franchisemanila.com/2015/10/vending-business-profitable-business-in-the-philippines/
General Conference Nutrition Council. (2019). FactSheet: Nondairy Beverages. Retrieved from General Conference Adventist Health
Minitries: http://healthministries.com/articles/gc-nutrition-council/factsheet-nondairy-beverages
Hoover's, Inc. (2015). Vending Machine Operators Industry Profile. Retrieved from dun & bradstreet:
http://www.firstresearch.com/Industry-Research/Vending-Machine-Operators.htm
Krismariani, F. (2018, November 26). 12 Wonderful Health Benefits of Drinking Dutch Mill Yoghurt Milk. Retrieved from Dr. Heben:
.https://drhealthbenefits.com/food-bevarages/beverages/health-benefits-of-drinking-dutch-mill
Mayo Clinic Staff. (2017, September 7). Water: How Much should you Drink Every Day? Retrieved from Mayo Clinic:
https://www.mayoclinic.org/healthy-lifestyle/nutrition-and-healthy-eating/in-depth/water/art-20044256
Mowen, M., Hansen, D., & Heitger, D. (2017). In Managerial Accounting 6th Edition. Taguig City: Cengage Learning Asia Pte Ltd.
MyAccountingCourse.com. (2019). Gross Profit Margin. Retrieved from https://www.myaccountingcourse.com/financial-ratios/gross-
profit-margin
Nakate, S. (2018, May 6). Go Through these Pros and Cons. Retrieved from https:/opinionfront.com/vending-machines-in-schools-pros-
cons.amp
Pilon, A. (2019). How to Start a Vending Machine Business. Retrieved from Small Business Trends:
https://smallbiztrends.com/2019/03/vending-machine-business.html
Rappler.com. (2019, August 1). You Can Get Dehydrated No Matter the Weather. Here's What to do About it. Retrieved from
rappler.com: https://www.rappler.com/brandrap/health-and-self/235524-tips-prevent-dehydration
Tacio, H. (2019, April 11). Health Benefits of Calamansi. Retrieved from BusinessMirror:
https://businessmirror.com.ph/2019/04/11/health-benefits-of-calamansi/
Technavio. (2019). Growing Demand for Retrofitting of Vending Machines to Boost Growth . Retrieved from Business Wire:
https://www.businesswire.com/news/home/20190925005398/en/Global-Vending-Machine-Market-2019-2023-Growing-Demand
Vending.com LLC. (2018). Drink Vending Machines. Retrieved from https:/www.vending.com/vending-machines/drink-machines/
Verma, S. (2012). Invention Story of Vending Machine. Retrieved from https://www.engineersgarage.com/invention-stories/vending-
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Villafuerte, F. (2018, May 16). Tips on How to Start a Business Vending Machine Business. Retrieved from
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Whitehead, G. P. (2019). . Most Profitable Vending Machines. Retrieved from Small Business Trends:
https://smallbiztrends.com/2019/06/most-profitable-vending-machines.htm
104
105
Totals
Calamansi
Year Supply in units Supply in Peso
Year 1 131,431 2,520,101.58
Year 2 144,498 2,765,224.00
Year 3 157,658 3,008,320.62
Year 4 171,116 3,253,443.04
Year 5 184,667 3,496,539.65
Soya
Year 1 63,921.70 1,917,651.14
Year 2 70,358.70 2,110,761.05
Year 3 76,899.59 2,306,987.71
Year 4 83,640.36 2,509,210.76
Year 5 90,485.02 2,714,550.57
Chuckie
Year 1 59,388.37 1,484,709.17
Year 2 65,309.71 1,632,742.87
Year 3 71,285.76 1,782,143.98
Year 4 77,407.51 1,935,187.68
Year 5 83,583.95 2,089,598.79
QD Water
Year 1 172,158.25 1,721,582.54
Year 2 189,242.51 1,892,425.12
Year 3 206,428.13 2,064,281.28
Year 4 223,981.41 2,239,814.15
Year 5 241,636.06 2,416,360.59
Appendix 7
1 Sea Freight Cost

Quotation
109
110
Appendix 9
2 Forecasted Dollar to Peso Rates
10
3 Inflation Rates
111
112
113
114
115
Appendix 19
4 Detailed Computation of Capacity
6 9 9 3 1,458 Machine Capacity
Year 1 Calamansi Soy Milk Dutch Mill Chuckie QD Water
Unmet Demand 9,302 31,173 79,248 39,416 57,565
Daily unmet demand 32 108 275 137 200 752 Expected Daily Sale
5 Days worth 541
Projected in a year 25,978
Annual Capacity 9,302 25,978 79,248 39,416 57,565
Daily Capacity 32 108 275 137 200 752 Planned machine content

Unmet Demand 10,303 34,292 86,981 43,398 63,292
5 Days worth 595
Annual Capacity 10,303 28,577 86,981 43,398 63,292

Unmet Demand 11,364 37,447 94,668 47,453 69,063
5 Days worth 650
Annual Capacity 11,364 31,206 94,668 47,453 69,063

Unmet Demand 12,497 40,685 102,436 51,640 74,967
5 Days worth 706
Annual Capacity 12,497 33,904 102,436 51,640 74,967

Unmet Demand 13,691 43,960 110,158 55,900 80,914
Daily unmet demand 48 153 382 194 281 1,058 Expected Daily Sale
5 Days worth 763
Annual Capacity 13,691 36,633 110,158 55,900 80,914
Daily Capacity 48 153 382 194 281 1,058 Planned machine content
116
Appendix 21
5BSP Interest Rates
117
118

Feasibility Study For Samal Housing Project

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Title Page

THE FEASIBILITY AND VIABILITY OF PUTTING-UP HOUSING PROJECT

A Feasibility Study Presented by Anthropos Realty INC.

In Partial Fulfillment of the Requirements for the Reclassification of land area

financial aspect of the project.

Technical Study. This study focused on business operation. It included

will be located at South Philippine Adventist College – campus.

Organization and Management Study. The proposed business will operate

proposed project will earn a profit.

will offer opportunity to help customers, church, and employees.

on the Feasibility and Viability of Putting-Up Vending Machines at South Philippine

Adventist College - campus is feasible and viable.

Viability of Putting-Up Vending Machines at South Philippine Adventist College -

Brief History of the Project

concentrating (Rappler.com, 2019).

of the SPAC store in distributing drinks to the consumers.

To relate, this research is constructed to determine the feasibility and viability of

Statement of the problem

machines inside South Philippine Adventist College campus.

Objectives of the Study

following points of view:

vending machines through the different products it dispenses;

2. To formulate marketing strategies necessary for the success of the proposed

3. To investigate the future potential of the business concerned;

4. To create the SWOT analysis for the business.

3. To determine the operational/technical requirements in the establishment of a

vending machine business;

4. To know the overall capacity of the proposed vending machine business.

Organization and Management

1. To determine the most appropriate form of business organization suited for

2. To determine the required number of people to manage and operate the

proposed project successfully;

3. To determine qualifications of personnel that manage the business;

4. To measure short term and long-term solvency position of the business

1. To determine the amount of capital needed to put up vending machines in

2. To estimate the financial returns of the business for 5 years;

3. To examine and determine profitability and efficiency of the proposed

Significance of the Study

research about putting-up vending machines.

Working Students. This will give another working opportunity.

Scope and Limitations

five-year projection, from 2020-2024.

the researchers conducted a preliminary survey with a total of 100 respondents to

gathered through internet, related articles and books.

Research Design. A descriptive method was employed in this research study to

Philippine Adventist College campus.

separately, as the population of the target market.

The proponents were required to use a 5% margin of error in determining the

March), the researchers computed the sample size as presented.

Where: n= sample size

e = margin of error (expressed in percentage)

1Number of Questionnaires to be distributed – For Semestral Data

the academic levels as presented in the table above.

sample size as presented.

Where: n= sample size

e = margin of error (expressed in percentage)

2Number of Questionnaires to be Distributed - For Summer data

Treatment of Data. The researchers used manual or personal method of

business venture such as:

efficiently or not (Mowen, Hansen, & Heitger, 2017).

assets. (Mowen et al, 2017).

ROI = Operating Income / Total Investment

expenses is subtracted (Mowen et al, 2017).