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CHAPTER III
TECHNICAL STUDY
After analyzing the market feasibility of the proposed product, the

technical aspects of the production are then taken into consideration. The

technical study aims to properly determine the most efficient way of allocating

resources taking into consideration the cost-benefit principle, which is the benefit

that will be derived from producing the desired quality product must be more than

the cost that they will incur to produce it.

This study primarily considers basic issues pertaining to the proposed

product’s quality, resource availability and accessibility and the optimization of

the use of resources to produce a quality product at lowest possible cost. If these

significant matters can be probably attained, technical soundness is deemed

possible.

Objectives

1. To establish a standard regarding the quality of the product taking into

consideration the resources and the processes needed in the

production.
2. To ascertain the availability and accessibility of the resources needed

in the production.
3. To determine the possible means on how to optimize the use of

available resources to produce the highest quality product at lowest

possible cost.

Description of the Product

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The proposed product would be a set of four wooden chairs. These chairs

having only two pairs of legs each would stand leaning on each other

consecutively. The height of every chair would be 5 inches less than that of its

preceding chair making them appears like a staircase of four steps when

connected. Every chair will have an inverted L-shaped block of wood at the back

which will form the backside of the chairs and will seem to be the handle of the

staircase.

Another setup of this product will be stacking each chair one on top of the

other to form a clever multi-shelved cupboard with a coat rack formed from the

upright portions of each chair.

The seats of every chair would be made of ¾ inch plywood; the first seat

will have a width of 14 inches and length of 19 ¾ inches, the second seat with a

width of 14 inches and length of 18 ½ inches, the third seat with a width of 15 ¾

inches and length of 17 ½ inches, and the fourth seat with a width of 17 ½ inches

and length of 16 ½ inches. The back support will be made of wood block with the

measurements of 25 ½ inches in length from the chair’s apex down to the chair’s

seat. The blocks of wood (1 ½ “ x 2”) which will constitute the back legs up to the

chair’s seat will have a length that ranges between 10 1/4 inches up to 20 1/2

inches.

Table 3
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Measurements of Chair Parts

Chair Seat Back support Back Chair seat’s Chair

(from the support side support seat’s
apex up to (from seat back
the chair up to the support
seat) chair’s
base)
First 19 ¾ “ x 14” 25 ¼” 20 ½ “ 10 ½” x 4 ½” 17 3/4” x
4 ½’
Second 18 ½” x 14” 25 ¼” 15 ¼” 12 ¼” x 4 ½” 17 ¼” x 4
½”
Third 17 ½” x 15 ¾” 25 ¼” 10 ¼” 14” x 4 ½” 16 1/2'” x
4 ½”
Fourth 16 ½” x 17 ½ “ 25 ¼” 13 ½” 15 ¾” x 4 ½” 15 ¼” x 4
½’

Uses of the Product

The N. Y. O. collapsible chair is of three functions. At default, it will be a

set of four chairs where people of differing and decreasing height may seat upon.

This may be used in the living room and in any other area that the user may

prefer to place it. Its another setup of being a cupboard will make it useful as a

place for your files and other domestic items in the bedroom or in the living room.

The upper portion will serve as a rack where coats may be hung.

The user may change the set up of the product whenever he wants to

hence providing a new look for his living room or wherever he desires to place it.

On the other hand, other things such as umbrella, hats, mini towels, ID lace,

scarf and the like may be hang on the rack when the product is in its cupboard

setup.
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Manufacturing Process

The manufacturing process indicates how the stages in a process are

linked together; identify any bottlenecks in the process and where quality

assurance procedure should be used.

The manufacturing process of the collapsible chair will include the

inspection of raw materials, measuring and cutting of the plywood and wood

blocks, polishing of the wood surfaces, assembly of the fixed chair parts,

covering the chair parts with decorative vinyl with adhesive, affixing the barrel for

the chairs’ locks, and final inspection.

Inspection and Preparation of Raw Materials and Tools and Equipment

The venture will be avoiding producing poor quality final products caused

by poor quality raw materials. When the raw materials (plywood, wood blocks,

nail, screw, decorative vinyl, wood parquet flooring glue) arrives at the plant, they

will be inspected for patent defects by knowledgeable workers to ensure if the

product quality required is achieved and to save time and money later in the

process. In this phase, inspection of tools to be used will also be done to avoid

danger and serious problems caused by faulty tools while manufacturing the

product.

Measuring and Cutting of raw materials

Under this process, wood blocks and plywood will be cut into their

prescribed lengths intended for their use. The wood blocks will be ordered at a

size of ½” x 2” and at a length of 10 ft while the plywood will be ordered at a size

of 4” x 8” and at a thickness of ¾”.

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Polishing of the wood surfaces

After cutting the wood blocks and plywood, all the cut woods will be

polished through the use of electric grinder to remove the rough surface and

make it smooth for covering. This process will be done at approximately 1 hour

by two different workers within same time bracket.

Assembly of chair parts

All parts of the chair will be first assembled before they are covered. This

includes the back support of the chair, the chair’s legs, and the chair seat. Two

workers will do this process within 2 hour and 45 minutes.

Varnishing

Needless to say, the workers will first polish or clean the chair using the

grinder to avoid dust, dirt and smoothen the surfaces. After cleaning, they will be

varnished as a finishing touch to give it a protective gloss..

Affixing of Barrels and Hooks

After the chairs are varnished, barrels and hooks will now be put on their

respective positions which will serve as the chairs’ locks when used as a chair or

as a cabinet to avoid the chance to fall down.

Final Inspection of the Finished Product

As stated in the inspection phase, the venture will be avoiding producing

poor quality finished products. Hence, final inspection of the finished product will

be conducted before they are stored or delivered to ensure that the chair is in

accordance with the standard set by the business venture. The manager who will

inspect the product is expected to assess: (1) if the furniture is free from any
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unnecessary scratches (2) if the measurements of all the parts are strictly

followed (3) any other defects which could affect its marketability and durability

(4) and if it has the quality that is within the standard set by the firm.

Packaging

Since the firm is within the furniture industry, product’s packaging will be

unnecessary. Upon receiving purchase orders, the product will be delivered to

the retailers by the manager by renting a delivery service vehicle.

Table 4
Employees Activity Schedule

Time Worker 1 Time Worker 2

08:00-08:15 Preparation and 08:00-08:15 Preparation and
Inspection of tools and Inspection of tools and
raw materials raw materials
08:15-09:30 Measuring and cutting 08:15-09:30 Measuring and cutting
of raw materials of raw materials
09:30-10:00 Polishing of cut woods 09:30-10:00 Polishing of cut woods
10:00-10:15 Breaktime 10:00-10:15 Breaktime
10:15-12:00 Assembly of the chair 10:15-12:00 Assembly of the chair
parts parts
12:00-01:00 Lunchbreak 12:00-01:00 Lunchbreak
01:00-02:00 Assembly of chair parts 01:00-02:00 Assembly of chair parts
02:00-02:15 Cleaning of working 02:00-02:15 Cleaning of working
area area
02:15-02:45 Varnishing (1st coating) 02:15-02:45 Varnishing (1st coating)
02:45-03:00 Breaktime 02:45-03:00 Breaktime
03:00-03:30 Varnishing (2nd coating) 03:00-03:30 Varnishing (2nd coating)
03:30-03:45 Cleaning of working 03:30-03:45 Cleaning of working
area area
03:45-04:15 Affixing of barrels and 03:45-04:15 Affixing of barrels and
hooks hooks
04:15-04:45 Inspection of finished 04:15-04:45 Inspection of finished
product and rework if product and rework if
necessary necessary
04:45-05:00 Storing of tools and 04:45-05:00 Storing of tools and
finished products finished products

Production Schedule
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There will be 22 working days in a month, 264 days in a year according to

the standard number of working days prescribed in the governmental agencies.

Employees will work eight (8) hours a day. It normally starts at 8:00am and ends

at 5:00pm. There is one hour lunch break from 12 noon and short time offs will be

allowed; 10:00-10:15 and 2:45 -3:00. Regular and special holidays in the year

mean no production operation.

The venture anticipates 2 units of finished product daily in the preliminary

year of operation.

Operation is expected to increase depending on the over all demand for

the product and expected increase in manual labor.

Table 5
PRODUCTION SCHEDULE

YEAR MONTHLY PROJECTED ANNUAL PROJECTED

PRODUCTION (in units) PRODUCTION (in units)
2009 44 528
2010 50 600
2011 58 696
2012 67 804
2013 77 924

Factory Tools and Equipment

Tools and equipment are vital in manufacturing type of business. These

help the worker to perform their respective tasks in a more efficient and effective

way. The following table shows the tools and equipment that will be necessary in

the manufacturing operation of the firm with their corresponding amounts and

quantity.

Table 6
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Factory Tools and Equipment

Name of equipment Unit Cost Quantity Total Cost

Master Maktec Circular Saw P 4,650.00 1 P 4,650.00
Eagle Super Cut saw 179.75 2 359.50
Tool Master Angle Grinder 1,999.00 2 3,998.00
with Polisher
Screw Drill 1,395.00 1 1,395.00
Toolbox 599.00 1 599.00
Measuring Tapes 59.00 2 118.00
Hammer 250.00 2 500.00
Generator Set 22,500.00 1 22,500.00
Gloves 39.75 2 79.50
Safety goggles 30.00 2 60.00
Eagle Professional masks 39.75 2 79.50
Circular Lamp 92.00 6 552.00
Pencil 2.00 3 6.00
Paint brush 20.00 3 60.00
Stanley chalk line 349.75 2 699.50
Eagle tri square 49.75 2 99.50
TOTAL 35,695.50
Sources: Citi Hardware - Lipa; Makro - Batangas

Circular Saw. This will be used to easily cut the ply woods into their

appropriate measurements.

Saw- This will be used to cut wood blocks and small portions of plywoods.

Angle Grinder with Polisher. This will be used to polish the cut woods and

remove the rough surfaces and make it smooth for covering.

Screw Drill. This will be used in driving screws to the parts of the chair that

will be detachable.

Toolbox. This is where the equipments and tools will be stored.

Measuring Tapes. This will be used to measure the pipes that will aide in

cutting them.

Hammer. This will be used in driving finishing nails.

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Generator Set. This will be used as a source of electrical energy when

there are any power interruptions which could impair the daily production.

Gloves. This will be used by the workers as primary protective equipment

while they are in working area.

Safety Goggles. This will be used as protection of worker’s eyes from

sawdust and dirt.

Protective mask. This will be used for the workers to prevent from inhaling

the sawdust and dirt inside the working area.

Circular Lamp. This will be used to provide sufficient lighting in the working

area.

Pencil. This will be used by the workers to mark the measurements of ply

wood and wood blocks.

Paint Brush. This will be used in applying the adhesive liquid.

Chalk line. This will be used as a mark when measuring the woods.

Tri-square. This will be used as a measuring tool for woods.

Paint Brush. This will be used in applying the adhesive liquid.

Factory Furniture

The venture will also need furniture in running its operation. The following

table shows the furniture that will be purchased by the business with their

corresponding amount and quantity.

Table 7
Factory Furniture
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Name Unit Cost Quantity Total Cost

Working table P 4,000.00 1 P 4,000.00
Plastic Chair 750.00 2 1,500.00
Circular Lamp 92.00 6 552.00
Garbage bags 139.00 1 139.00
Lamps 79.00 1 79.00
Fire Extinguisher 550.00 1 1,999.00
Total P 8,269.00
Sources: Makro

Working table. This is where the procedures will be done such as cutting,

flaring, assembling and packaging. It will be made from wood and will be made to

order.

Plastic Chair. The venture will need two plastic chairs for each worker.

These are also made to order to correspond to the working table’s size.

Circular Lamp. This will be used to provide sufficient lighting in the working

area.

Garbage Bags. This will be used to contain the waste and dust of

manufacturing the product in the working area.

Lamps. This will be used for lighting the comfort room..

Fire Extinguisher. This will aid for emergency cases like fire. This cost

P1,999.00

Office Equipment

The following equipments will be considered essential in the

administration of the firm.

Computer set. This will be used by the venture’s manager. This will be

contributed by one of the partners.

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Stand Fan. This will help provide proper ventilation in the executive’s

room. This costs P895.00.

Water Dispenser. This will aid for the water needs of the manager

suppliers and retailers negotiating with the manager in the office. One unit costs

Php 650.00.

Office Furniture

Working table set. This will be used by the manager and will serve as his

desk and will profess all clerical uses it may give to the manager.

Office Chair. This will be used by the manager to seat upon.

Plastic chairs. This will be used to accommodate those people who are

about to negotiate and personally transact with the manager.

Plant Location

The plant should be located in the residential areas or the so called built

up areas keeping in view the marketing outlet. Established at Barangay Marauoy,

Lipa City, the plant site includes production area, offices, and warehouse area.

The total land area is 120 square meters just enough for the needed plant area.

The proponents chose the site because of its accessibility or availability of

transportation facilities, and utilities needed and infrastructure facilities needed.

The venture will pay Php 7000.00 for the rental of the said warehouse.
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Plant Layout

The plant layout is the physical arrangement of equipment and facilities

within a plant. It can be indicated on a floor plan showing distances between the

features of a plant. Unnecessary efforts in the manufacturing process can be

avoided if the plant layout is suitable. Processing operations require a workplace

with adequate space to improve productivity, safety and quality of products.

The manager’s office will have an area of 12 square meters (3x4 sq.

meters), stockroom will have an area of 21 square meters (6x3.5 sq. meters), the

restroom is of 9 square meters (3x3 sq. meters), working area 33 square meters

(6.5x8 sq. meters), and the remaining space will serve as receiving area for

suppliers and prospective customers.

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Raw Materials

These are the materials which become tangible part of finished goods and

services.

Table 8
Direct Materials
(per unit of production)

Items Unit Cost Quantity Total Cost

Wood block P 1.042 per inch 247.63 inches P 258.03
Plywood 0.1417 per sq. 1,869.56 sq. 263.80
inch inches
Wood Varnish P200 per Liter 1 Liter 200.00
Finishing Nails (#1 60.00 pero kilo 1/8 kilo 7.50
½)
Finishing Nails (#1 58.00 per kilo 1/8 kilo 14.50
1/2 , #2)
Screw (#1 ½) 1.5 per pc. 10 pcs. 15.00
Screw (#2) 6.00 per pc. 10 pcs 60.00
Hook 2.00 per pc. 6 pcs. 12.00
Barrel 4.65 per pc. 9 pcs. 41.85
TOTAL 872.68
Sources: Golden Top Steel Construction Supply, 21 Century Construction Supply, Citi Hardware –
Lipa
The major raw materials needed are wood blocks and plywood that will be

cut into their prescribed lengths intended for their use.

Wood Blocks. These will be purchased at a size of ½” x 2”, at a length of

10 ft and already skin dried. The wood blocks will be cut into 11 sizes (45.25”,

40.25”, 35.5”, 30.5”, 8”, 15.25”, 14.5”, 13.5””, 12.5”, 25.5”, 6.25”) forming the legs

and the upper portion for the coat rack.

Plywood. The plywood will be purchased at a size of 4” x 8” and at a

thickness of ¾”. This will be cut into sizes (19.75” x 14”, 18.5” x 14”, 17.5” x

15.75”, 16.5” x 17.5”, 10.5” x 4.5”, 12.5” x 4.5”, 14” x 4.5”, 15.75” x 4.5”, 17.75” x
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4.5”, 17.25” x 4.25”, 16.5” x 4.5”, 15.25” x 4.5”) forming the chair seats, back and

side supports.

Finishing nails. Nails of lengths 1 ½ and 2 inches will be used to join wood

blocks and plywood.

Screw. Screws (#1 and #3) will also be used for better joint of wood blocks

and plywood.

Varnish. This will be covering the assembled product for enhanced

exterior.

Barrels and Hooks. This will be used for a better hold when the furniture is

in its chair setup and cupboard setup.

Indirect Materials

These include materials and supplies used in the manufacturing operation

that do not become part of the product.

Table 9
Indirect Materials

Items Unit Cost Quantity Total Cost

Sand Paper 0.4379 per sq. inch 3 sq. inches P 1.31
Pencil 2 2 6
Total P 7.31
Source: Citi Hatrdware - Lipa

Sand Paper. This will be used to even the wood surfaces.

Pencil. This will be used by the workers to mark the measurements of ply

wood and wood blocks.

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Office Supplies

The venture will need the following items in recordkeeping purposes. This

will be bought at Makro.

Record book - The firm will need one record book per month.

Journal book - To be used for recording daily business transactions.

Folders - For filing purposes of the month-end reports.

Ball pen - Three ball pens per month will be needed.

Calculator - This will be use for calculation.

Stapler - For fastening purposes, one stapler is needed

Receipts - One booklet will call for one month’s transaction

Cleaning supplies - This will be used to keep the business area clean,

doormat will be used twice a month and forty pieces of rags.

Pencil - Three pencils will be needed.

Puncher - One puncher will be needed for better record filing.

Coupon bond – This will be used for printing report, two hundred sheets

will be used.

Scissors - Two scissors are needed.

Glue - One bottle of glue at a minimum size.

Liquid Eraser - This will be used in correcting errors.

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Table 10
Office Supplies
(monthly)

Items Unit Cost Quantity Total Cost

Record Book 73 1 73
Journal Book 22 2 44
Folders 3.28 25 82
Ball pen 3.75 3 11.25
Calculator 215 1 215
Stapler 109 1 109
Receipts 22 2 44
Cleaning Supplies
Doormat 33 2 66
rags 1 40 40
Pencil 2 3 6
Puncher 109 1 109
Coupon Bond
Short 0.22 500 110
Long 0.23 500 115
Scissors 31 2 62
Glue 29 1 29
Liquid Eraser 11.9 1 11.9
Total 1,127.15
Sources: Makro

Utilities

Continuous success in manufacturing operation will be influenced by

utilities needed in the production. Such utilities are evidently available in the

chosen plant location.

Table 11
Utilities Expense
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Utilities Amount Total Cost

Electricity P 1,900 P22,800.00
Water 250 3,000.00
Telephone 995 11,940.00
TOTAL P41,340.00
Sources: BATELEC II (Lipa City), Lipa Water District, Globelines Telecom - SM

Electricity - Electricity will be supplied by Batangas Electric Corporation

(BATELEC II) and is expected to cost Php 1,900.00 per month.

Water - Lipa City Water District will provide the water supply in the area.

Water bill is expected to cost Php 250.00 a month

Telephone Service - The Globe Telecom will provide the telephone service

to the firm. Installation is free of charge.

Leasehold improvement - The venture estimated that it will cost them Php

15,000.00 to renovate the leased building to suit into the production operation of

the firm.

Lease

Instead of constructing a new building, the business has decided to lease

a business unit that will cost them P 5,000.00 per month for 120 square meters.

Such business unit is located in Barangay Marauoy, Lipa Batangas. It shall be

considered as an operating lease, which will account for rent expense on a

regular basis. The lease agreement shall last for five years and will be renewed

depending on the agreement of the partners with the lessor. All leasehold

improvements are already installed on the rented building. The partners decided

to spend for painting the installed improvements which will cost them Php

12,400.00 for the materials and labor.

Waste Disposal
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Too much waste can cause inefficiency. Effective waste disposal can give

an opportunity to reduce cost caused by wastes. It can also increase productivity,

safeguard the environment and strengthen the firm’s economic base. Effective

waste disposal as making the environment clean and safe is a social

responsibility of the firm.

The proponents are obliged to comply with the community’s waste

disposal directive. There will be segregation of wastes into biodegradable, non-

biodegradable, and recyclable wastes. These would be put on trash bin or trash

bags to be collected by the city government collection truck.

Direct Labor Requirement

Direct labor is composed of wages and salaries of workers who are

engaged in the direct generation of goods and services. This typically does not

include wages and salaries of support or office personnel.

In deciding the numbers and types of workers that are required to operate

the proposed business, breaking down the production into different stages and

deciding the number of people who will be needed for each stage of the process

is needed. Store management, quality assurance, and book-keeping should also

be taken into consideration when planning employment levels.

The proponents agreed that they will employ two workers for their

preliminary operation. They will work eight (8) hours a day, five (5) days a week.

Workers are expected to understand the nature of the business and to actively

work towards success. Workers will be required to routinely monitor product

quality.
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The proponents are aware of some of the most common aspects people

wish to have in their job. These are reasonable wage, security of employment, a

feeling of belonging to the company, respect for their skills and knowledge, good

relationships with other staff and opportunity to develop new capabilities through

reasonable working conditions.