Project Feasibility on the Production of a Shoe Insole Deodorizer

Project Feasibility Study on the Production of a Shoe Insole Deodorizer using Activated Carbon and Baking Soda

Proposed Location:
Brgy Anupul, Bamban, Tarlac

Eda S. Castro
Ferdinand D. Constantino
Jane M. Delos Santos
Gian Carlo R. Sotelo
Divine Grace B. Tuazon

Bachelor of Science in Industrial Engineering


Tarlac State University

March 2003

Brief Description of the Project

This project proposes to produce a shoe insole deodorizer using activated carbon and baking soda as the active ingredients.  The product shall be branded as “POWER SOLE”.  It is a flat insole type deodorizer that can neutralize the odor and absorbs moisture on foot caused by sweating.  It can also serve as a shoe pad for loosed shoes.  The product has five (5) sizes (5,6,7,8 and 9) to cater different foot sizes it has also a suggested life span o one (1) month, but this will depend on the lifestyle of the person using it.

Summary of Findings:

1.    Management Aspects

The Power Sole Enterprises shall be a pre-operate for 12 months before its normal operations.  The enterprise shall be a partnership type of business organization.  The business shall employ its personnel, which shall be headed solely by the plant manager who shall supervise the production, administrative/finance, and marketing officers.  Under these officers are the production laborers, warehouse man, product inspector, accounting clerk, security guards and driver respectively.  All personnel shall come from the province of Tarlac.  Giving importance to the nearby towns where there are skilled workers in relation to this kind of work.  The compensation of the personnel shall be based on the existing labor code.  The enterprise shall pay Php 1,291,584.00 for its salaries/wages during the first year of operation.  Benefits such as SSS, EC and PhilHealth shall be given to the employees.  Every year of operation, the enterprise will hire one (1) additional production to meet the increasing demand of the product.

2.    Marketing Aspect

The marketability or salability of the proposed product is anticipated, since this project entails comfort, easy and convenient to use compared to existing foot deodorizer.  The demand of the product shall be based on the past demand of foot deodorant products consumed by each household population of Tarlac City’s urban barangays, and the supply shall be based on the number of foot deodorant purchased from several distributors/suppliers.  The market share of this product is 42.05% of the average yearly demand from 2003-2207, which is equivalent to 178,546 pairs of shoe insole deodorizer but considering the result of the survey conducted by the researchers, the researcher had decided to increase the average capacity of the plant from 178,546 to 1800,000 for the first year of operation.  The proposed selling of the product shall be Php 16.50 which is inclusive of value added tax (VAT).  The project will sell the proposed product in cash discount basis.  And limited its retail price to 20% increase from the set factory price to the retailer (distributor) to achieve the pricing objective of meeting the existing price competition in the market.  The Product shall be introduced and promoted through posters, billboards, banners and radio ads.

The proposed product shall be packed in a vacuum-sealed transparent plastic packaging material with a descriptive label, which contains features and specification of the product, and finally the packaged products are placed in a carbon box for protection in the storage and delivery.  The outer surface of the box is printed with the product name, the description or specifications, and the name and address of the manufacturer  The product shall bear the brand name “POWER SOLE”, which signifies the characteristic and nature of the product.

3.    Technical Aspect

The proposed product is a shoe insole deodorizer using activated carbon and baking soda.  The activated carbon is part of the product because it can absorb odors and volatile organic compounds.  We also have to add the treatment of the foam and cumbelli to help activated carbon to help activated carbon to neutralize the odor.  In this study, we conducted laboratory tests to determine the volatile content of activated carbon before and after used.  We found out in testing activated carbon, with the use of a gravimetric oven, that when it is not treated, only 3.423% of moisture will be absorbed by the carbon and 45.181% was absorbed by the carbon a exposed naked on the humid environment  When the researchers treated the carbon, they did not absorb moisture of 43.5  In conclusion, before the manufacture of the product, see to it that it was treated  An odor test was also conducted to determine the effectiveness and lifespan of the product.  Based on the test, the suggested lifespan of the product is one month.

The manufacturing process is a continuous processing wherein the workers must meet the target output per day.  The capacity depends on the expected market share of 42.05%, which us 278,546 pairs of shoe insole deodorizer  But the researchers decided to product 180,000 pairs in the year of operation due to the consideration of the result conducted by the researchers for the willingness of the respondents to try and buy the proposed product.

The plant will be producing an average of 180,000 pairs a year, that is 15,.000 pairs a month or 750 pairs a day.  Some nearby hardware and electronic suppliers supply machineries and equipment.  But other equipment will be purchased in Manila.  The plant shall be located at Brgy. Anupul, Bamban, Tarlac, the productivity center of the town.  It is located at the back of the Municipal Hall building which is 100 km. from Manila.  The transportation is so easy because it is along the highway.  The availability of manpower will never be a problem; customers will be assured of economical and fast delivery of the products due to the project proximity to the raw materials, suppliers, and to its target market.  The hiring of labor forces will not be a problem since the plant requires a minimal number of employees.  The Tarlac II Electric shall supply electricity and water requirements of the plant.  The productivity center has an area of 1,260 sq.m. half of the area will only be occupied.  The enterprises shall pay the monthly rentals of Php 20.00 per sq.m for the 630 sq.m floor area or at Php 12,600.00 monthly with escalation rate, payable within the first week of each month.

The waste material will be in the form of scraps, which will serve as another source of income for the enterprise.  The proposed project is environment friendly because it will not affect the nature during or after producing it.

4.    Financial Aspect

The financial needs of the project shall be sourced from the partners’ equity.  Each of the five (5) partners shall contribute an initial amount of Php 150,000.00 in cash which is Php 750,000.00 the said amount is estimated to be used in all expenses to be incurred during the pre-operating period and during the first half of the year of normal operations.  All purchases shall be on cash basis and sales are on cash discount basis with term payment of 5/15 net 30.  the projects liquidity ratios are computed to be 6:1, 8:1, 10:1, 12:1, and 15:1, on the first, second, third, fourth and fifth years, respectively, which shows that the project can liquidate its total current liabilities very satisfactorily.  The rates of return on investment for the first five years of normal operations are 16.32%, 30.81% and 39.35% respectively.

5.    Social Desirability Aspect

The project is aimed at helping individuals who have an unpleasant odor and foot moisture.  The business enterprise shall give a great contribution to the government because of the money paid in the form of taxes.  These taxes can be paid in different forms.  Through the introduction of this business, consumers will be given more choices for the same effect.  The producers of the raw materials can increase its profitability.  The competing products can also lower their process because of increased competitors.  Also there will be a decrease of unemployment by giving jobs to individuals when they will be hired, which will improve their lives and the society as a whole.