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Feasibility Study - Provide Institutional Support Service

Paper type: Essay
Pages: 17 (4248 words)
Categories: Business, Case Study, Finance, Project Management
Downloads: 34
Views: 81

The aim of the project is to provide institutional support service through the installation of photocopying machine units to two strategic locations inside the campus of ZCSPC that will cater student needs of photocopy materials. Project Benefits:The students of ZCSPC will primarily benefit from the project as well as the institution itself from additional revenue they can generate through commission. Project Cost:The project requires initial cost of P 100,000 for it to be operational.

Project Funding: The funds necessary to start the project will emanate from the personal investment of an interested proprietor, who is a businessman. Contingency Plan:In the event the project fails because funding run short, the proponents will use debt financing to supplement the project cost. Another potential market (WMSU-CSM students) had also been identified by the group in case the project turned to be unsuccessful for the studied market.

INTRODUCTION Nature of the business

Photocopying is widely known good business venture to engage especially when it is situated near or at an educational institution where massive information are dealt and needed.

With the presence of photocopying machines, learning is facilitated and able to cope with the demand of time, providing the much needed services of reproducing reading materials for both students and faculty. The ZCSPC is offering several academic and vocational course and it is constantly expanding through the years. Photocopying has been very difficult for the students of this institution.

They have to go downtown or at WMSU to have their materials photocopied. This is because the only service available inside the campus provides poor service and performing inefficiently. The institutional support photocopying service is to be established to address this need. Students will not anymore be bothered of the difficulty in reading their materials and walking a long distance just to avail of the service. B. Background of the study For many years, the students of ZCSPC experience difficulty in photocopying the reading materials. There is only one available photocopy machine in the campus.

For this reason, the study is made to fill a niche that seems to exist in this particular segment of the market. The proponents find it necessary to address the need to establish an institutional support photocopying service to bridge that gap which can be beneficial to those students who will be availing the services through this study. The study is manageable, and for certain, profitable. As long as the situation of the existing market remain, where school’s policy will not change on regards to private operator of photocopy machines and competition will be of level that can be managed.

The study will not only focus on its viability and profitability but also on factors which has socio-economic impact. The market for which purpose this study was created should be the one to benefit.

Significance of the study

The existence of market demand for photocopying service has brought about the idea of establishing an institutional support photocopying service. The purpose is to provide the students of ZCSPC accessible, quality and inexpensive photocopy service.

Objective of the study

The development of this feasibility study aims in showing a potential business from establishing an institutional support photocopying service, specifically, the proponent would like: To service the market for which the study was created. Establish the business potentiality of the study from the actual response of the identified market. In relation to the above items, to overall determine the feasibility of putting up institutional support service, initially photocopy service.

Scope and limitations of the study

The study will be initially limited to the operation of two units of ordinary photocopy machines at two different strategic location inside the campus of ZCPSC. It intends to show the expected returns of the project after two years of operation, together with the financial requirement necessary in operating the said business. The project will be owned and operated by a private individual under the guidelines of school administration in association with the Committee of Income-Generating project.

Identification of SWOT (Strength, Weaknesses, Opportunities and Threats

At a different dated observation and services of surveys conducted by the group, the following are identified. Strengths: 1. The quality service that can provide by the procurement of brand-new photocopy machine will certainly give an edge to the existing old machine which is performing inefficiently. Weaknesses 1. The unprecedented increase in demand of photocopying service for just two (2) available machines might fail to serve the market considering the declining utility of machines despite expected regular maintenance.

Opportunities

The chosen location are considered strategic and accessible.

The proponents ensure proper distribution of service so as not to get congested at peak transaction hour. No existing photocopy center situated at the college area of the campus. This indicates that most of college student can be a potential market. Threats: The unexpected increase of the cost of service due o increase in prices of consumables might force the price of the photocopy to increase posing a threat in the decline in market demand. 2 The unexpected response of existing competitor to the situation like additional installation of photocopy machines by them. . The increase in the member of competitors can be a very potential threat which can decrease the expected market share of this study. G. Methodology In determining the feasibility of establishing an institutional support service, the proponent conducted a random interview and distributed survey sheet to include the unit operators of the existing competitor, students of ZCPSC and school’s administration for information bearing to the studies. The group made also an actual observation of the location and determined the best site where the machines are to be installed.

A canvass on the cost of equipment and prices of related supplies necessary in the operation were undertaken. Possible source of raw materials that offers the cheapest cost were taken into consideration

THE FEASIBILITY STUDY

Marketing Aspect

Market Description The target market for the study will be high school and college students. It account for over 90% of the entire population of students in the campus. The data of the market was obtained from the available population data of the institution presented to the group by the school administration the past five years and current year date as presented below.

In pursuit of clear identification of market, 300 designed survey sheet, which in the judgment of the group can provide a sufficient sample for study were distributed. The distribution were made to randomly selected 30 high school and 210 college students, taken proportionately based on recent population ratios. These 300 students have chances of being selected equally from a little over 3,000 student population. In other words, a hundred (100) students per one thousand (1000) population. Since the sample has probability of being selected equally, the group is confident that the results of stratifying the sample can best represent the population. Of the 300 survey sheets distributed, only 293 have responded. The survey results suggest that 84. 98% of the identified population represents the target market.

As shown above, after careful assessment and stratification, the group conclude that those students that photocopy inside but unsatisfied with the service and those who photocopy outside the campus would what constitute the possible market. b. Nature of Demand Photocopying has been really a problem for most students of ZCSPC. Some endure the very poor service of a single operator inside the campus, others go to WMSU or downtown just to photocopy. Such situation was the underlying factor of the idea of establishing an institutional support photocopying service. For those who photocopy inside and unsatisfied with the service, express their concerns that the machines produce blurred photocopied materials which gives difficulty to decipher the text, thus contributing to eye constraint and poor reading.

This has been proven by the group after examining materials photocopied from that machine. It was also confirmed by the operator that the machine is experiencing breakdowns and is frequently being repaired. Those who patiently walk the stretch of ZCPSC to WMSU just to photocopy and those who result in going downtown to avoid walking express their full desire to avail of the service, these students which comprised of high school and college are willing and able to spend for photocopy. This is demonstrated from the responses they give on the survey sheets distributed. At least, the average they spend is P22 a month (computed from a weekly basis, refer to Annex C.

From the random interview, aside from the survey sheet, the group found out that majority of students in high school, don’t have textbooks. Some share in one textbook, others really don’t have. As a result, they photocopy the materials. Others, photocopy notes, references and other source materials from the library. As this is a technical and vocational school, most students also use numerous worksheets for their course activities which are photocopied in numbers. College students represent the biggest share in the market. The services offered by the institutional support is really of help in meeting their needs. In addition, majority of the respondents, indicate in the survey sheet that the frequent source materials they photocopy are manuals and worksheets.

This is often a requirement and they have to photocopy. The group believes from the nature of the demand that a need to establish photocopy machines inside the campus must be given consideration. c. Projected Demand (Table 4) Projected Demand (in copies) |School Year |2005-2006 |2006-2007 |2007-2008 |2008-2009 |2009-2010 | |Projected Demand | | | | | | | |1,099,200 |1,118,400 |1,120,880 |1,123,600 |1,126,400 | Refer to Annex D for computations.

The above projected demand were obtained from series of computation applied initially on the projected population. The stratification process was the basis of 93. 86% potential market probability. Using the average number of photocopies per student in a year, which is 440 copies, the projected demand in unit or copy for the next five years were derived. d. Demand Analysis The demand was established from the initial observation and subsequent surveys and interviews supporting such observation. It is demonstrated from the fact that more student of ZCPSC are looking forward to have their materials photocopied at the campus.

Of the respondents who photocopy, 79. 18% goes out of the campus to avail such service. The most likely photocopy center for this market is the nearest possible location they can fin which is WMSU, otherwise, they go downtown. But the nearest location possible is out of their way which they have to make an effort to reach the place. Moreover, those who photocopy inside and are not satisfied with the service, which accounts for 5. 80% prefer of availing the service as soon as it is made available. The combined percentage of these identified market constitute the target market which has potential market of 84. 98% creating a basis of establishing the viability of the study. Refer to Table 3 for shown percentage). e. Nature of Supply As per verification, the campus of ZCSPC has only one available photocopy machine. This is situated near the high school building and is not immediately visible.

Through interviews, it shows that most of its customers are high school students and rarely do college students go and have their materials photocopied. The operator also related that on average they have a gross receipts of P350. 00 a day. This indicate that at P0. 50/copy, they are able to reproduce on average 700 copies daily yielding 16800 copies per month or 168,000 copies in one school year or 10 months. f. Projected Supply Table 5 Projected Supply School Year |2005-2006 |2006-2007 |2007-2008 |2008-2009 |2009-2010 | |Projected Supply | | | | | | | |104,000 |105,600 |106,000 |106,400 |106,800 | Refer to Annex E. The projected supply for the next 5 years were determined using the probability rate from the stratification of the sample data. The 8. 87% referring to those who photocopy inside and stratified with the service was used in the projection. (See Annex D and refer to Table 3) g. Supply Analysis

The supply data provided by the operator of the photocopy machine is not that accurate that it can be approximately used in projection. It is more appropriate if the projection is made on the basis of statistical data. The survey provide a better measure of the supply because the respondents are the customer itself of the photocopying service in the campus. The 8. 87% rate was used instead of the 14. 68% rate (refer to Table 3). This is because the assumption of the group is that to get the true target market, it is important to consider the willingness of the market to avail of service and part of the served market are those who are not satisfied with the service of the existing competitor.

The existence of a demand-supply gap as shown in the table above indicated a potentiality of business. The fact that demand exceeds over supply clearly indicates that there are unserved market. These unserved market did what the group anted to target. They are considered the entry point of establishing the imstitutional support photocopying service. h. Pie Chart The two photocopy machines to be procured which are ordinary has photocopying capacity of 16 ppm (pages per min. )The pie chart below represents the captured market of the study over the total market demand of those who photocopy versus the market of the competitors. Of the total population, only 93. 86% avail of photocopy services, this constitute the total market demand. The market of the competitors comprises 8. 87% of the total population or 9% of the total market demand. Our market comprise of 84. 98% of the total population or 91% of the total market demand. ( See Table 3) [pic] J. Competitive Position

The market share can be sustain for the reason that the photocopy machines are strategically located inside the campus where the market is captured. The college students which are the bulk of the target market are readily accessible to these services. Moreover, newly acquired machines will guarantee better performance than a machine that seems to look fully depreciated and frequently experiencing breakdown. k. Marketing Program Price The price per photocopy is only P 0. 50 regardless of the size of the bondpaper used. (long or short). The price set is reasonable enough as this is the prevailing market and competitive rate for photocopy services. It will be increased by 10% annually in anticipation of inflation. Place

The place where the service facility will be established is right inside the campus of Zamboanga City State Polytechnic College. As a result, the students being target market will not have difficulty in accessing the services offered. The location is considered to be strategic for the target market will no longer look outside the campus for an available photocopying machine. The machines are also srategically placed near the college and high school buildings, so that students will have easier access to avail such photocopy services. Promotion The manner of advertising the services offered will be through posting a sign which says “XEROX-P0. 50” on the walls where the business will operate.

Bold enough and so that passersby including the target market will easily locate the service facility. Word-of-mouth is another way of promoting the business established. Product As a service-oriented business, the product involved is a service-related one. Photocopying is a fast and economical method of printing lectures/lessons especially for academic institutions like the ZCSPC. It is therefore the aim of the business to provide quality services. Quality service of the product would be defined as fast and available service, quality or clear copy, and service with a smile.

Recruitment Programs Spreading of information on job hiring will be made through word of mouth. A wanted sign stating the vacant positions & qualifications required will be posted on the location of the business itself. Interviews of applicants will be headed by the owner himself. e. Training Program Training on the operation of the machine for newly-hired machine operators will be conducted by the supplier of the photocopying machine. They will be taught on how to operate the machines. Opportunity such as this will be grabbed by the company. f. Compensation Package For newly-hired machine operators, they will be given an initial salary of P 80. 0/day or P 920/month (P80 x 24 days), which is the average wage regardless of the # of copies printed. However, this amount will be increased by P10 annually. g. Fringe Benefits A P15 transportation allowance will also be granted to the machine operators, regardless on the distance of the business from their residence.

This will also be increased by P5 annually. h. Working Hours/Office Hours The working hours start at 8:00 in the morning till 5:00 in the afternoon. The operation will be 6 days a week- Mondays to Saturdays. Lunchbreak of each operator differs in a way that one operator starts her break at 11 a. m. to 12 noon while the other one starts at 12:00 noon – to 1:00 p. m. o that at least one machine will be available all throughout the day. j. Business Policies 1. Machine operators should always keep their working area clean. 2. They are held accountable for the payments received from customers. 3. All receipts should be turned over to the owner at the end of the day. A meter reading will be done at the end of the day to match the receipts accumulated for the day. Any discrepancies without valid reason will be charged to the operator in charge. 4. The photocopying services are offered on a cash basis. C. Technical Aspect a. Product Description The institutional photocopying support service is a service oriented business. The product offered is photocopying service.

It is known as xenography which is a printing method used especially by educational institution, offices and other areas where fast and economical way of printing materials are involved. Nowadays, as the world moves around information, photocopying service plays an important part. Through this advancement, ideas and information will easily be spread not only in schools but also to many other places in the world. b. Machinery and Equipment Photocopying machines are the type of machinery that will be mainly and solely used in providing the service. The machine brand name is SAVIN. It is an orinary photocopying machine that uses liquid ink and it has a printing speed capacity of 16 ppm. Together with these machines are consumables.

Seline Drum and the Toner are the main consumables attached to these machines. It has a life of 50,000 copies and 6,000 copies respectivley. The machine itself has life of 7-8 years under normal conditions. There are also minor replaceable spare parts which accordingly included normally on the cost per copy. The group haven’t identified yet which spare parts those are and decided to charged it as period cost under Repairs and Maintenance. Since it does not increase the useful life nor improve performance output exceeding original defined performance. If major parts are to be replaced and the need to capitalize such cost arise, then that will form part of the cost of the machine in later years.

The power consumption of the machine has estimated cost of P0. 50 per copy. The power consumption cost will be treated as product cost, since prevailing treatment of such cost is product cost. The machines can be bought at P30,000-P35,000 depending on the brand and quality (the capacity and other factors). These are to be acquired at either CJ Enterprises or Fuji XEROX Phils. Inc. located at San Jose Road and Veterans Avenue, respectively. Initially, the group wanted to start the business with two (2) machines on operations. From the given capacity of 16 ppm (pages per min. ). It can meet the yearly requirement more than enough at an 8 hour ran for both machines.

Desk with built in cabinet is where the photocopying machine will be set upon. A built-in cabinet will be used by the operator in storing the consumables and supplies such as the bondpaper, toner (ink), stapler and staple wire, calculator, etc. A portion of the cabinet will also be used to store the cash from the sale of photocopy service. The compartments must have key locks to safeguard the assets. c. Business Location The service facility will be situated along R. T. Lim Boulevard, Z. C. inside the campus of Zamboanga City State Polytechnic College. The canteen specifically is the actual place where the photocopy business will be installed.

One of the machineries will be placed in the canteen near the college area while the other one is on the other canteen near the high school area and education department. The target market can now be easily accessed which makes the location a strategic one for service operations like the photocopying business. The location may pose a problem for the delivery of consumables from the suppliers, however, this may be solved by stocking up on materials consumables ensuring that there would be continuous operations all throughout and avoid delay brought about by unavailable supplies. As a small-scale business, the owner himself will be responsible on the purchase of the needed consumables. d. Plant Location [pic] e. Location Map [pic] f. Building and Facilities

In the canteen where the photocopy business will be situated, a vacant space is available wherein the school specifically the Income Generating Project Committee is willing to let it occupy by interested parties who plan/want to do business. A rental fee will not be charged but rather the school will only get a commission from the revenue of the business. The canteen is only a one-story building. Part of the place is already occupied by the food-related business. The vacant space that will be provided for us will account for 1/4 of the entire space. No further improvement will be needed. The place is ready to be occupied anytime. g. Supplies & Consumables

The cost of services involve the cost of consumables that are use in the performance of photocopying service. Bondpaper, Toner which consists of Dispersant and Concentrate, and Seline Drum Bondpaper is one of the supplies needed in producing a printed copy. Both long and short bondpaper are used, which largely depend on the needs of the customers. The dimension of the long bondpaper is 8 ? x 13 inches while the dimension of the short one is 81/2 x 11 inches. These will be purchased from United Paper House Sachi brand with a substance of 16 is preferred. One ream of bondpaper cost P 93. 50 per 500 pieces for short bondpaper and P 104. 50 per 500 pieces for long bondpaper.

Toner which is the liquid ink comes in two forms. It has what is called dispersant and concentrate. These are mix in a 3:1 ratio to come up with the ink to be use in the machine. The dispersant is the black substance bought in liters at a cost of P 125. 00 per liter. This is mix with the gel like substance called the concentrate which can be bought in box at P125. 00 per box. This toner is use for 5-6 thousand (‘000) printed copies depending in the adjustment of the operator to the toner. However, since the business looks forward of delivering quality service, the operators are advised to have the toner adjusted in a level that will produce clear and quality print on the Xeroxed materials.

Another consumable is the Seline Drum. It is the structure that looks like a film metal below the roller steel that comes back and forth while photocopying is done. It has a life of 50,000 copies on average and is replaced afterwards. It can be bought at P3,500 per drum. These consumables can be obtained from FUJI Phils. , Inc. or CJ Enterprises which are copy centers and distributor of clear and ordinary photocopy machines. It is estimated that prices of these consumables will increase in the near future given our present economic condition. United Paper House, as the main source of bondpaper guarantees that supply will be on a regular basis.

However, when unforeseen events occur, wherein the supply of bondpaper from the mentioned supplier is not possible, another source will be sought so as not to affect the operation of the business. h. Utilities Based on the interview conducted by the group, the electricity consumption is treated as product cost where the estimated experience rate is P0. 02/copy. This information on rate from the operators of ordinary photocopy machines was obtained from this monthly electric bill statement which was divided by their monthly photocopied copies produced based on meter readings that accumulates the number of copies that had been photocopied. The electricity will only be utilized when somebody from the market photocopies and only on that time the machine will be operated.

It is fro this reason, hat electricity consumption is based on the number of photocopies. i. Waste Disposal A photocopying business does not have much waste/garbage to dispose. Waste comprise only of bondpapers with defective printing, the plastic ream of bondpapers, container of the dispersant, and seline drum. Waste papers may be reused as scratch paper, or to test if the photocopy machine is working. It can also be used by the canteen for whatever purpose it may serve them. Ink must not be wasted. The container of the ink must be drained before it is being disposed of. The seline drum may be turned over to the copy center or be disposed.

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Feasibility Study – Provide Institutional Support Service. (2018, Sep 08). Retrieved from https://studymoose.com/feasibility-study-provide-institutional-support-service-essay

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