PLASTIC TILE

A Business Proposal
Presented to
Engr. Joseph Lester Galindo
College of Engineering
Mindanao State University
Marawi City

In Partial Fulfillment
Of the Requirements of the Course
ES-92 (Engineering Economics)

Wilvin O. Siasico
October, 2013

I. INTRODUCTION

Business

is

particular

trade

or

profession.

Industrial

Management, in business, term used to describe the techniques and

expertise of efficient organization, planning, direction, and control of
the operations of a business. Planning in industrial management has
three principal aspects. One is the establishment of broad basic
policies with respect to production; sales; the purchase of equipment,
materials, and supplies; and accounting. The second aspect relates to
the implementation of these policies by departments. The third
relates to the establishment of standards of work in all departments.
We, people, also want to experiment and engaged somehow in
simple kind of business. We, as a nature lover students, we come up
a good idea what kind of product to produce. Since the materials that
we used to our product is one of the causes of pollution to our
environment in order to minimize the pollution we used this materials
to produce a good and usable product. Our product to produce it can
be decorated in such as hotels, restaurant, houses, etc. And despite
of the affordability of our product it is pleasing to everyones eyes.

II. DESCRIPTION OF A BUSINESS

Plastic tiles will be the preferred name that will describe the
proponents business. In this business we produce a new product
from the waste materials.

The business establishment will be in the form of partnership.

The partnership will be composed of ten members. It will be engaged
in material production business. We decided to offer this product for
the home developers today who are seeking for cheaper, eco friendly
and long lasting options for building their houses.

We establish this business to help the environment by reducing

the plastic garbage or plastic that already used and from these raw
materials we produce a new product that will be use to beautify their
own house. The operation will take place at Tubod, Iligan city.

III. MARKETING PLAN

A. TARGET MARKET
Target market of the business shall consist of construction
supply owners, individual buyers, and all possible buyers within
Mindanao.
B. PRODUCT
Home developers today are seeking for cheaper, eco friendly
and long lasting options for building their houses. And now we
introduce our product which is the plastic tile that eco friendly
option made entirely from plastic waste material mixed with

cement. The new plastic tiles are light, long lasting and are cost
effective.
Specifications:

Tile dimensions (L x W x H): 30.5 cm x 30.5 cm x .635

cm;
(12 in. x 12 in. x .25 in.)
Tile weight: .5 kg (1.102 lb.)

C. PRICE
The partners will use the cost plus pricing method to
determine the retail price of the product. The computation
is on follows:

TABLE 1
Table of Raw Materials for One Month Operation
Quantity

Unit

Description

Unit Cost

Total

165000

Kg

Plastic

P 15

P 2,475,000

3400

Sack

cement

P 400

P 1,360,000

TOTAL

Total production cost

3,835,000
Divided by: No
500000

P 3,835,000

Production cost/unit
P 7.67
Multiplied by: mark-up
50%
Mark-up
3.835

Production cost/unit
P 7.67
Add: Mark-up
P 3.835
Retail Price
P 12.00

11.505

IV. OPERATIONAL PLAN

A. SALES TARGET
The proposed product can be sold at any time. In first
month of the operation of the business the proponents will make
500,000 plastic tiles. In the following month the productions of
the plastic tiles increase 3% every month of production.

B. PRODUCTION SCHEDULE
The production is done daily except Sunday as well as the
product distribution or selling and the purchasing period is done
monthly.

C. PRODUCTION PROCESS
Raw Materials

Crusher

Plastic pellet
making
Molding

Dryer
machine

Mixture chamber

Finished
Product
Procedure in making plastic tile
1. Make the plastic into pellets.
2. Make it pulverize the plastic pellets through the crusher.
3. Mix the pulverized plastic, cement, and water into
mixture chamber.
4. Put it into the molding.
5. Lastly, let it dry to have the finished product
V) ORGANIZATION PLAN
A. ORGANIZATIONAL CHART

PRESIDENT
Tagubase, Ariel

GENERAL MANAGER
Siasico, Wilvin

SECRETAR
Y

TREASURE
R

SALES IN
CHARGE

PURCHASE
R

Dimal,
Yasser P.

Muammar
,
Abdulnass

Bazeron,
Jalal

Nassef,
Ryan

OPERATORS
ASSISTANCE
MANAGER
Mamainte, Johary B.

1.
2.
3.
4.

Nassef, Ryan
Nalla, Jann Clyde
Mamainte, Johari
Cabangahan,
Romnick

Factory
The presidentAnd
will be the highest ranking position of the
Utility
organization. The Workers
secretary, treasurer, purchaser, assistance manager,
and sales in charge will report to the general manager as required
which the second highest ranking position of the organization. The
operators will be report to the assistance manager.
B. FUNCTIONS
President

Responsible for the decision making.

General Manager
Supervises and manages the entire business operation.
Manager
Organizes the policies, rules, regulation to keep work
efficiently.
Supervise the subordinate to accomplish the given task
to achieve business goals and objectives.
Secretary
Records the needed raw materials to purchased.
Records the business transactions.

Makes purchase inventory report.

Treasurer
Computes and receives the overall payments.
Submits weekly sales, cash flows and financial report to
the manager.
Responsible for keeping any monetary concerns in the
operation.
Purchaser
Involved in purchasing activities.
Accountable for the procurement of the raw materials.
Sales in Charge
Responsible
consumers.

for

entertaining

the

needs

of

VI) FINANCIAL PLAN

A. BUDGET ASSUMPTIONS
1) The product will have a retail price of P 12 each.
2) 500,000 plastic tiles will be produced monthly.
3) Every month the plastic tiles produce .5% defects.
4) Lot and building budget is assumed P 50 million.
5) Machinery and equipment budget is assumed P 6 million.

the

6) Delivery equipment budget is assumed P 7 million.

7) Raw materials budget within one month is P 3,835,000.
8) Sales will increase 3% per month
9) Prices of raw materials will increase 2% monthly.
10) Furniture and fixtures budget is P 300,000.
11) Office equipment budget is P 100,000.
13) Current bill and water bill monthly is assumed P 100,000.
14) Transportation budget is assumed P 10,000.
15) For the monthly wages of employee
POSITION
Manager
Secretary
Treasurer
Sales in
Charge
Purchaser
Operators
Factory
workers
Utility workers
TOTAL

B. FINANCE

No. OF
WORKERS
2
1
1
1

WAGES
(monthly)
P 20,000
P 9,000
P 9,000
P 7,500

1
8
15

P 6,900
P 10,500
P 6,000

P 6,000
P 202,900

There are six members in the business. They will be called

industrialist-capitalist for they will be sharing the profits and
losses of the business operation equally. Each partner of the
group will contribute P 6.75 million each for the initial capital of
the business.
C. TOTAL PROJECTED COST
The estimated projected cost is P 67,345,000. Show below
is the estimated cost for each category.

Fixed Asset:
Machine expenses

6,000,000

Factory construction
50,000,000
Furniture and fixtures expenses
300,000
Delivery equipment expenses
7,000,000
Working Capital:
Transportation Expense

10,000

Ingredients (see table 1)

3,835,000
Current and water bill (monthly)
100,000
Office Supplies Expense
100,000
TOTAL COST

+
P 67,345,000

D. BUSINESS INCOME RETURNS

In three years operation of the business the income return is:
* Monthly operation
Tiles produce

500,000

Retail Price

P 12.00
P 6,000,000

* Sales will increase 3% per month

Monthly operation

P 6,000,000

.03
P 180,000

* Prices of raw materials will increase 2% monthly

Raw materials total price

P 3,835,000
x

.02
P 76,700

* Monthly tiles defects produce is .5%

Monthly operation

P 6,000,000
x

.005
P 30,000

In three years operation

Monthly operation
increase P 180,000

P 6,000,000

No. of months in one year

x (12-1)

12

Monthly operation

P 72,000,000

P 1,980,000
P 73,980,000

Yearly operation
Multiplied by 3

P 73,980,000
x

In three years operation

3
P 221,940,000

* Losses in three years operation

Monthly cost defect

30,000

No. of months in one year

12

P 360,000
x
Cost defect in three years

P 1,080,000

Monthly price increase

P 76,700

No. of months in one year

x (12-1)
P 843,700
x

Price increase in three years

P 2,531,100

Monthly wages of employee

P 202,900

No. of months in one year

12

P 2,434,800
x
Employees wages in three years

P 7,304,400

Monthly water and current bills

P 100,000

No. of months in one year

12
P 1,200,000
x
3
Water and current bills in three year

P 3,600,000

The loss in three years operation is:

Cost defect in three years

P 1,080,000

Price increase in three years

P 2,531,100

Employees wages in three years

P 7,304,400

Water and current bills in three years

3,600,000
TOTAL LOSS

In three years operation

Total loss in three years

P 14,515,500

P 221,940,000
- 14,515,500
P 207,424,500

The net income within three year is P 207,424,500.

The total income within three years

207,424,500
Divided by the no. of members
10

P
/
P 20,742,450

In three years operation, every member of the

business will receive P 20,742,450.

E. CONCLUSION
In this partnership, with a product of plastic tiles, is now a
feasible business for there is a demand of the product in the
industry. Ten partners will compose the business who will contribute
P 6.75 million each for a total of P 67.5 million. The money will then
be used to cover the projected cost of the business with the amount
of P 67,345,000. This will lead to a net income of P 207,424,500 with
in three years and the every year the net income is P 69,141,500.
The initial investment of every members of the business will be
recovered after one year.