A Project Feasibility Study on Establishing a Petro-Chemical Vending Machine in Brgy. Canlubang Calamba City, Laguna

Hazel Faye  De Guzman,; Julianne Robert  Ordoña,; Ma. Keithlyn  Yap,

A Project Feasibility Study on Establishing a Petro-Chemical Vending Machine in Brgy. Canlubang Calamba City, Laguna

Hazel Faye De Guzman | Julianne Robert Ordoña | Ma. Keithlyn Yap

Abstract:

This study assessed the feasibility and profitability of putting up a gasoline station that uses a fuel vending machine or an automated petrol pump with a pay-at-the-pump system. Initially, the researchers determined the market demand and market acceptability of the business idea in Brgy, Canlubang, Calamba City. Out of 672 population of tricycle drivers in the area, a sample of 250, based on Slovin’s formula, were surveyed to determine the demand, market acceptability, market segments, fuel consumption, preferences and work periods. The researchers found that the total fuel consumption of the tricycle population was 2,067.84 liters daily or 754,761.60 liters annually with a consumption rate of 3.59 liters daily for each tricycle driver. They also identified the market segments with similar characteristics having an inclination on price-sensitivity, location-sensitivity, brand-consciousness, and quality- consciousness. Demand was found at 1,712.17 liters daily or 624,942.60 liters annually with a market acceptability of 82.8%. Following this, the proponents identified the appropriate marketing strategies needed to satisfy the potential target markets. They also determined the needed production output to cater the demand. Given the limitations on resources, the researchers found the service production capacity at a maximum of 62,494.26 liters in the first year, 8.28% of the daily demand. Alongside this, they identified all the necessary elements in establishing the business, covering various legal, physical, technical, and financial requirements to ensure operation. With the project cost of ®1,594,995.61, in the first year, the researchers calculated the net income at ®269,824.32 and it is expected to increase to ®424,264.80 in the fifth year. Accordingly, the researchers measured the payback period at 3.12 years and the return on investment at 22%. The researchers also conducted financial ratio analysis to determine the acceptability of the business. Both benefit-cost ratio and profitability index tallied at 1.29 which is an acceptable result. The researchers, therefore, concluded that the proposed business was feasible and profitable.