Titel Candel Prodaction

ALPHA UNIVERSITY COLLEGE SCHOOL OF

Course Title: Quantitative Analysis for Management

Submitted to:
Dr -Kirubell.
January -2023, Addis Ababa, Ethiopia
 Titel Candel Prodaction

TABLE OF CONTENTS

PAGE
II. SUMMARY 1

II. PRODUCT DESCRIPTION & APPLICATION

III. MARKET STUDY AND PLANT CAPACITY

A. MARKET STUDY

B. PLANT CAPACITY & PRODUCTION PROGRAMME

IV. RAW MATERIALS AND INPUTS

A. RAW & AUXILIARY MATERIALS

B. UTILITIES

V. TECHNOLOGY & ENGINEERING

A. TECHNOLOGY

B. ENGINEERING

VI. MANPOWER & TRAINING REQUIREMENT

A. MANPOWER REQUIREMENT

B. TRAINING REQUIREMENT

VII. FINANCIAL ANALYSIS

A. TOTAL INITIAL INVESTMENT COST

B. PRODUCTION COST

C. FINANCIAL EVALUATION

D. ECONOMIC BENEFITS

PROFILE ON PRODUCTION OF CANDLE

1, Cost Estimation
Ma 300,000.00

La 50,000.00

OH 20,000.00

P,M 2%

S,p 720 per kartoon

Cost of _Price of Product

Material + labor + overhead = cost

300,000 + 50,000 + 20,000= 370,000.00

Cost of _ profit margin

Wholesale x markup = retail price

720 x 2% = 14.4

Cost of _ Salle Price

Cost x markup ( profit margin) = wholesale price

370,000 x 2% = 7,400

2,
 Titel Candel Prodaction

3, Introduction
BACKGROUND One of the earliest forms of portable illumination, candles have served vital functions for
humankind throughout history, a fact chronicled through the discovery of candles or candle-like objects in virtually
every society. Historians believe the original candle may have been invented by primitive men who dipped dried
branches in animal fat, thus producing a slow-burning and reliable source of light. Reliefs belonging to the ancient
Egyptians depict the use of candles by writers and philosophers who worked well after sundown. These early
candles were most likely developed from tapers that were made of fibrous materials mixed with wax or tallow (the
white, nearly tasteless fat of cattle or sheep that was also used to make soap, margarine, and lubricants). As far back
as 3000 B.C. , dish-shaped candles were used on the island of Crete.

Candles have also been used for religious purposes. The Bible, for instance, makes numerous references to the use
of candles, including the story of King Solomon who, after building the Temple, used ten candle-sticks to light the
north and south ends of the structure. In the Middle Ages, candle making became a popular occupation, as evidenced
by the creation of many candle makers' guilds throughout Europe. Later, candles were used as a means of keeping
time. At auctions, the bidding time was limited by inserting a pin into a candle and letting the wax melt until the pin
dropped, thus concluding that period of time.

Although the materials that comprise a candle have changed through the years, the art of candle making has
remained surprisingly similar to the original production processes. Candle wicks were, at first, made of reeds or
rushes; eventually, various natural fibers were used. In 1824, Frenchman Jean-Jacques Cambaraceres introduced an
important refinement in wick technology with the plaited wick, which burned more evenly than un plaited wicks.
Twisted or plaited cotton still makes up most wicks today.

Animal or vegetable fats were used for the first candles. As candle making technology progressed, beeswax
became widely used, mainly because of its pleasing odor and the absence of the mess that melting fats produced.

SUMMARY This profile envisages the establishment of a plant for the production candle with a capacity of
100 tones per annum. The present demand for the proposed product is estimated at 2000 tones per annum. The
demand is expected to reach at 2960 tones by the year 2022. The plant will create employment opportunities for 8
persons. The total investment requirement is estimated at about Birr 1.3 million, out of which Birr 0.5 million is
required for plant and machinery. The project is financially viable with an internal rate of return (IRR) of 19 % and
a net present value (NPV) of Birr 578,170 discounted at 8.5%.

PRODUCT DESCRIPTION AND APPLICATION -Candle is an illuminating device made of a fiber wick
enclosed in a cylinder of wax or fatty material. Beeswax candles were used by the Romans, and tallow (animal fat)
candles have been made in Europe since the Middle Ages. In the 18th century, spermaceti, a wax obtained from the
heads of whales, was introduced for candles. Since the mid-19th century, ordinary candles have been made from
mixtures of paraffin wax, stearic acid (a solid fatty acid), and beeswax. Hydrogenated vegetable oils and other
waxes are also used. It is highly desirable in rural areas where there is no electric light. Candles are also used in
traditional and religious ceremonies and also in hotels and restaurants

4,
 Titel Candel Prodaction

 The independent variable  is exactly what it sounds like. It is a variable that stands alone and isn't changed
by the other variables you are trying to measure. For example, someone's age might be an independent
variable. Other factors (such as what they eat, how much they go to school, how much television they
watch) aren't going to change a person's age. In fact, when you are looking for some kind of relationship
between variables you are trying to see if the independent variable causes some kind of change in the other
variables, or dependent variables

 The dependent variable  is the effect. Its value depends on changes in the independent variable. Just like an
independent variable, a dependent variable is exactly what it sounds like. It is something that depends on
other factors. For example, a test score could be a dependent variable because it could change depending on
several factors such as how much you studied, how much sleep you got the night before you took the test,
or even how hungry you were when you took it. Usually when you are looking for a relationship between
two things you are trying to find out what makes the dependent variable change the way it does.

y = 2x + 1 is a linear 

The graph of y = 2x+1 is a straight line

And here is its graph:

2. Demand Projection

One of the uses of candles is for lighting in areas where there is no electricity. In addition, candles are used in
traditional and religious ceremonies, hotels, restaurants and the like for illuminating occasions. Hence, its demand
will exist even if other types of lightings are available whether in rural or urban areas. The past supply trend also
reveals that consumption has been increasing in the past few years. By associating with population and the service
sector on annual average growth rate of 4% is taken to forecast the future demand (See Table 3.2). Table

3.2 FORECASTED DEMAND FOR CANDLES (TON)

Year Import Domestic Total

2008 2080 310 1770

2009 2163 310 1853

2010 2250 310 1940

2011 2340 310 2030

2012 2433 310 2123

2013 2530 310 2220

2014 2632 310 2322

2015 2737 310 2427

2016 2846 310 2536

2017 2960 310 2650

Due to the existence of wide unsatisfied demand a number of small to medium scale plants can be established in the
region

3. Pricing and Distribution

The average producer's price per ton of candle during 2004/05 is Birr 21,275. Allowing for cost increase Birr
20,000 per ton is taken for sales revenue projection. The product will find its market outlet through the existing
general merchandize wholesalers.

B. PLANT CAPACITY AND PRODUCTION PROGRAMME

1. Plant Capacity

The proposed annual processing capacity of the envisaged plant only taking a share of 5.6

% to the forecasted demand of the year 2008 is 100 tones candles, based on 300 working

days a year and a single shift of 8 hours per day. The capacity can be increased by

increasing the number of working hours per day.

2. Production Programme

The production programme is indicated in Table 3.3. Therefore, in the first and second

year of production, the capacity utilization ra te will be 75% and 85%, respectively. In

third year and thereafter, full capacity (100%) production shall be attained.

Table 3.3

PRODUCTION PROGRAMME

Sr. Product Production Year

No. 2008 2009 2010-2017

1. candles (tones) 75 85 100

2. Capacity utilization (%) 75 85 100

IV. MATERIALS AND INPUTS

A. RAW & AUXILIARY MATERIALS

The major raw materials used in candle making are paraffin wax, stearin acid, beeswax and dyes. Except
beeswax, all the other raw materials have to be imported. It is believed that paraffin wax can be easily
obtained from refineries in the neighboring Sudan.

Table 4.1
RAW & AUXILIARY MATERIALS REQUIREMENT AND COST
(AT FULL CAPACITY)
Titel Candel Prodaction