BUS TRANSPORTATION SERVICE GROUP 5 QUEENNIE MAE T. ELLAM JERALD J. SANTA – ANA JOHN CARLO S. QUINLOG TTH/ 4:00 – 5:30 PM I. Service Description A. Service Name BUS TRANSPORTATION SERVICE Bus Transportation Service will help the tourists, students, professionals, senior citizens and local Zanortehanons ease their daily routine through taking a bus and also helping the environment by keeping the carbon footprints reduce and traffic jams. A bus that will bring them to their final destination with the fastest, safest and cheapest way. B. Service Picture C. Location of the Service II. Cost Classification a. Supplies Item Price Php 1,000.00 Supplier Young Printing Press Php 24,750.00 Petron Gasoline Station TICKETS/RECEIPTS (Full tank of 5 buses) GASOLINE Php 5,000.00 OFFICE SUPPLIES Sebio Educational Supply B. Labor POSITIONS Manager DUTIES & RESPONSIBILITIES Implements management policies and procedures WAGE/SALARY Php 800.00 per day Responsible for hiring new employees Imposes policy rules and regulations Administers and control the business Bookkeeper Creates financial reports and transactions Php 400.00 per day Serves as a retainer of the business Keep an official track of the company spending Cashier Accurately brings on register and maintain all cash registers Php 355.00 per day In-charge in keeping the money through a bank designated by the management Act as custodian of daily sales of the establishment Prepares the payroll of the employees Inspector Responsible for ensuring safety standards are met on buses and other Php 400.00 per day public transport vehicles They inspect vehicles to check they are in good condition and that they meet legal requirements Dispatcher Act as a time keeper Deploy all the bus Php 351.00 per day Drives the bus and carry all the Drivers Php 500.00 passengers safely Conductor per day Receive the payments and give Php 355.00 tickets/receipts for some of the per day passengers Assess the passengers Repair and maintain the bus Mechanic Php 351.00 Performs weekly diagnostic to keep per day the bus condition on track Makes a report for any bus damages and changes Keeps the bus and office clean Janitor Php 147.00 Per day C. Equipment/Machineries Item Supplier Hyundai Unit 5 Unit Price 3,200,000 Sub total 16,000,000 1 2,860 2,860 Company BUS More to Store Shop (online) BANDY CLOCK Yeahgood.ph 1 20,000 20,000 1 30,000 30,000 1 5,204 5,204 (online) AIR COMPRESSOR Octagon Computer Shop COMPUTER SET Dipolog Multi Builder Supplier TOOLS d. Service Cost per passenger PARTICULARS AMOUNT Fixed Costs Depreciation (Bus) Php 10,556.00 Salaries Php 1,606.00 Total Fixed Cost Php 12,162.00 Variable Costs Gasoline Php 5,830.00 Total Variable Cost Php 5,830.00 Total Fixed and Variable Costs Php 17,992.00 Divide: Number of Passengers per day Total Service Cost per passenger 750 Php 24.00 e. Selling and Administrative costs Salaries Php 2,053.00 Depreciation for Equipment Php 36.00 Supplies Php 200.00 Total Selling and Administrative costs Php 2,289.00 d. Depreciation Schedules ASSET INFORMATION Initial Cost of the Asset Php 16,000,000.00 Salvage Value Php 800,000.00 Useful Life 15 years Depreciation Accumulated Depreciated Asset Expense Depreciation Value 2023 - - 16,000,000.00 2024 1,013,333.33 1,013,333.33 14,986,666.67 2025 1,013,333.33 2,026,666.66 13,973,333.34 2026 1,013,333.33 3,039,999.99 12,960,000.01 2027 1,013,333.33 4,053,333.32 11,946,666.68 2028 1,013,333.33 5,066,666.65 10,933,333.35 2029 1,013,333.33 6,079,999.98 9,920,000.00 2030 1,013,333.33 7,093,333.31 8,906,666.69 2031 1,013,333.33 8,106,666.64 7,893,333.36 2032 1,013,333.33 9,119,999.97 6,880,000.00 2033 1,013,333.33 10,133,333.33 5,866,666.70 2034 1,013,333.33 11,146,666.63 4,853,333.37 2035 1,013,333.33 12,159,999.96 3,840,000.04 2036 1,013,333.33 13,173,333.29 2,826,666.71 2037 1,013,333.33 14,186,666.62 1,813,333.38 2038 1,013,333.33 16,000,000.00 800,000.00 Date III. Pricing Strategy Competitive pricing will be the strategic pricing of our business since our price setting is based on our competitor’s prices which is Evergood Transit and we have a legal pricing from the LTFRB. Total Income Per Route INCOME FROM DAPITAN TO DIPOLOG Passengers Rate Total Dapitan – Dipolog 11 35 385 Polo – Dipolog 5 25 125 San Pedro – Dipolog 3 20 60 Owaon – Dipolog 2 20 40 Larayan – Dipolog 2 20 40 Sicayab – Dipolog 4 15 60 Minaog – Dipolog 3 15 45 Total 30 Destination Php 755.00 The table shows how many passengers will ride in each bus in just one route. According to our observation, the total income in every bus is Php 755.00 per trip multiply by total trip in a day which is 5 trips, the result is Php 3,775.00 per bus a day. The total income in one day will be multiplied to the 5 buses and that will result to Php 18,875.00. Therefore, our monthly income is Php 566,250.00 and the annual income is 6,795,000. Public transportation benefits road pricing by absorbing commuters who shift their travel from automobile to bus or rail. By replacing traffic with free – flowing conditions on major routes, congestion, pricing the speed and productivity can improve current express bus services, making them more attractive to commuters while reducing operating costs. Reducing congestion can also facilitate rapid deployment of innovative, high – performance bus – rapid – transit (BRT) operations in major corridors, which require only modest investments in new vehicles and passenger facilities. Improving the performance and variety of peak – period public transportation through a combination of congestion pricing and limited capital investment can provide significant benefits to current public transportation users. It can improve public transportation’s effectiveness in reducing peak – period auto travel and can provide the expanded passenger – carrying capacity necessary to accommodate shifts in public transportation commuter use induced by the imposition of congestion pricing. Blue Skies Express transportation based their bus fares to their competitors. Pricing is the reflection of everything we do in business, from the product development. In order to have a good pricing it must be start a simple, a fixed recurring price plan. Your price should almost never be lower that your costs or higher that what consumers consider “fair” Feeder Bus Destination Dapitan Proper to Airport/ Duration Price 1 way trip Php 1,050.00 Sea Port/Dipolog City Any trip from Dapitan City to Airport/ Sea Port / Dipolog City will only cost Php 1,050.00. In one bus, it can fit up 30 passengers with a regular fee of Php 35.00 per head. Bus Advertisement Rental Full rear wrap Side Wall wrap Duration Rate Monthly Php 50, 000.00 Monthly Php 70,000.00 Costing Service Php 40,000.00 Sticker Php 10,000.00 Service Php 48,000.00 Sticker Php 22,000.00 IV. Sales Forecast PROJECTED INCOME Service Daily Income Monthly Income Annual Income Bus Transportation Php 18,875.00 Php 566,250.00 Php 6,795,000.00 Feeder Bus Php 1,050.00 Php 31,500.00 Php 378,000.00 Php 50,000.00 Php 600,000.00 Bus Advertisement Total Php 7,773,000.00 PROJECTED ANNUAL INCOME 2024 2025 2026 2027 2028 P 7,773,000.00 P 8,550,300.00 P 9,405,330.00 P 10,345,863.00 P 11,380,449.30 Based on our service pricing, the total income in every bus is Php 755.00 per trip multiplied by the total trip in a day which is 5 trips, the result is Php 3,755.00 per bus a day. The total income in one day will be multiplied to the 5 buses, the result is Php 18,875.00. Our monthly income will become Php 566,250.00 and the total annual income for Bus Transportation is Php 6,795,000.00. The projected annual service income for our Feeder Bus will be Php 378,000.00 because in one month we estimated to have 4 trips with the total of 48 trips every year. On the Bus Advertisement we estimated to have 5 advertisements in one year for special locations such as Christmas Day, New Year, Valentines Day and some advertisement by school or new businesses that’s why we come up with Php 600,000.00 for our annual income. To get the projected annual income, we multiplied 10% annual increase based on our financial study. In the next (5) five years the demand for transportation will be higher than before because of the following of the increasing expansion of tourism and commerce. ASEAN integration will also bring more jobs and tourists therefore the population of employees and tourists will increase, and the toddlers will grow into elementary students; elementary students will be in high school; high school students will be in college and college students will become employees and so forth and so on. Therefore, our target market will expand. However, because of the increasing demand for transportation, new competitors will arise. Thus, our company will be doing research to level up or innovate our services in order to cope up with their need and continue our service. V. Breakeven Analysis a. BEP in units Break Even Point = Fixed Costs / Selling price – Variable costs Break Even Point Per Passenger Rate Average Selling price 629.25 100% Less: Average Variable costs 535.50 85% Average Contribution Margin 93.75 15% Fixed Cost Php 12,162.00 Divided by: Average Contribution Margin 93.75 Break even point in passenger 130 b. BEP in pesos Break Even Point = Fixed Costs / Selling price – Variable costs Break Even Point Per Passenger Rate Average Selling price 629.25 100% Less: Average Variable costs 535.50 85% Average Contribution Margin 93.75 15% Fixed Cost Divided by: Contribution Margin Rate Break even point in Peso Php 12,162.00 15% Php 81,080.00