eeco jeep rent to own
Content
Engineering economics
Rent to Own Jeepney
Submitted by: Arcay, Michael John Roland M.
Submitted to: engr. Mark Villanueva
Introduction Most people, either Filipinos or foreigners, engage themselves in a jeepney business since this business can provide them regular streams of income. The usual business model for most people who have enough money is to buy jeepneys and then rent them out to drivers. Basically, Rent to Own Jeepney, came from the concept of the usual buying-renting of jeepneys. This manufacturing company will be producing jeepneys using materials that could be cheaper than those being used by imported ones but is assure to be strong and durable and is much more efficient. Also, once produced, these jeepneys will be available for rent and can be owned by the client in 2 years.
Selection of Materials In these innovating years, people are craving for a more efficient machine. Since it is said that crude oil are getting scarce, oil price are getting higher through the years. Making all the commodities high also because of the mode of transportation is expensive. Therefore, by innovating and patterning to modern cars using fiber glass, we can make a light weight jeepney design thus making it more fuel efficient so that people who will buy this vehicle will not suffer from high oil price and thus help the community by causing less pollution.
Selection of Design For the selection of design, a well-maintained and comfortable jeepney with dashing cultural design will attract more passengers and could probably serve as a tourist attraction which could be a plus on the feedback of the company. In addition, jeepneys that will be produced are durable and fuel-efficient which can serve the client for a longer time. Also, the company is not just concerned on the design but on how it could be of help to the people. So, so a design of lower foothold which can be more convenient for elderly and children will be included. With this, there is a win to win situation, the company will earn from producing client’s choice jeepneys and the client for renting the jeepney. Also, the company is not just concerned on the jeepney’s physical appearance but on how it could be of help to the people. So, a design of lower foothold which can be more convenient to children and elderly will also be considered in the design. One can choose options for the jeepney. A design with higher capacity of people but more heavier and expensive and a design which is smaller, lightweight and a bit cheaper shall be considered. The larger jeepney is more convenient in busy places and longer route which he can gain much capacity thus making more income. The smaller jeepney is more suitable in shorter routes with low capacity but less expense in terms of oil, thus can make more rides than the larger one without much consideration in terms of fuel expense.
Site of Selection In entering in this kind of business, its overall success depends primarily on three factors: the vehicle, personnel and route. The company will take place near España street, Manila. Since it is one of the busiest road in metro manila, this would be the perfect site setting a site for jeepney business. With regards to site selection, it is best
to implement the business in busier areas, near universities, malls and other landmarks since more passengers are expected looking for transport.
Economy of Tool and Equipment Maintenance In a jeepney business, the company is expected to put budget on the repair and maintenance of the manufactured product. Since jeepneys will be purchased on the company, it is assured that we shall provide everything from oil changes to engine repairs.
Economy in the Utilization of Personnel For a starting company, there will be departments designated such as marketing, production, and technical department. The company should be hiring people capable of producing jeepneys. People who have knowledge on maintaining and repairing jeepneys would be a basis for hiring personnel. Applicants who have a great sense of business are greatly considered.
Two Options for the following: 1. Selection of Material In the production of jeepneys, there is a battle between the price of the materials and how they perform. Thus, two options are: efficiency cost
in this kind of business, price is not only the thing to be considered. It is also about how each material contributes to the efficiency of the product.
2. Selection of Method When things became worst, the company could choose between these methods: To continue production To buy and improve second hand jeepneys
Producing new jeepneys would probably be good for the company since it aims to manufacture jeepneys and rent it sooner or later. However, it is much easier to just buy second hand jeepneys and customize it the way the client wanted it to be. 3. Selection of Design For the design, the company could choose on these two options: Larger unit (high capacity but higher fuel consumption) Smaller unit (less capacity but lower fuel consumption)
4. Site Selection In selection of site, the company could take note of the following options: Busier and longer target areas Busier but shorter target areas
The company would probable chose busier areas since there are more passengers and there is a big need for a mean of transportation. However, in the production of jeepneys, the company should take into consideration the capacity of the produced jeepneys. Longer target areas would have more passengers but a shorter target area would have more competitions.
5. Comparison of Proficiency of Workers The company could have divided workers on two departments: Production Rent to Own Process
There should be workers assigned on the production department to ensure the quality and to follow the time table of the company. On the other hand, there should be assigned people who would do the negotiations when it comes to renting and maintenance of the produced jeepneys.
6. Economy of Tool and Equipment Maintenance For the economy of tool and equipment maintenance, the company could have two options: Part of the agreement or warranty Let the owner maintain the purchased jeepney
7. Economy in the Utilization of Personnel In the utilization of personnel, the departments designated are the following: . Technical department (may consist 5-10 personnel) Production department (may consist 15–25 personnel) Marketing department (may consist 5-10 personnel)
B. AMOTRIZATION Customers may choose their amortization process from the following:
1. No down payment Interest = 10% (compounded monthly) A = ₱700 daily = ₱21000 monthly Future amount = ₱555 385.22 Own in 2 years!!
(IF DP = 0)
F = A [(1+i)mt – 1] / i A = Fi / (1+i)mt A = [555, 385.22 (.10/12)] / (1+.10/12)12(2) A = ₱21000.00
2. With 10% Down payment, and get ₱5385.22 discount cost = ₱550000.00 i = 10% (compounded monthly) A = ₱124.50 DP = 10% = 55000 Own in 1 year!!
Cost = F + DP
; DP = 55000
F = 550,000 – 55,000 = 495,000
A = Fi / (1+i)mt A = [495,000 (.10/12)] / (1+i) A = ₱124.50
12(1)
C. DEPRECIATION
For the depreciation, I would choose Sum-of-year’s digit method. I found it more suitable because the depreciation charges are uniform every year. In that case, the chance of bankruptcy of the company is less.
D1 = (Co – Cn) ( n / Σ years) Where; Σ years = [n (n+1)] / 2 Assume; Cn = 30000 Co = 555385.22
Σ years = [1 (1+1)] / 2 = 1 D1 = (555385.22 – 30000)( 1/1 ) D1 = ₱525,385.22 --- depreciation after 1 year
D2 = ( Co – Cn) ( n / Σ years) Where; Σ years = [ 2(2+1)] /2 Σ years = 3 Assume; Cn = 27000 D2 = (555385.22 – 27000) [(2-1) / 3] D2 = ₱176,128.41
Rent to Own Jeepney
Submitted by: Arcay, Michael John Roland M.
Submitted to: engr. Mark Villanueva
Introduction Most people, either Filipinos or foreigners, engage themselves in a jeepney business since this business can provide them regular streams of income. The usual business model for most people who have enough money is to buy jeepneys and then rent them out to drivers. Basically, Rent to Own Jeepney, came from the concept of the usual buying-renting of jeepneys. This manufacturing company will be producing jeepneys using materials that could be cheaper than those being used by imported ones but is assure to be strong and durable and is much more efficient. Also, once produced, these jeepneys will be available for rent and can be owned by the client in 2 years.
Selection of Materials In these innovating years, people are craving for a more efficient machine. Since it is said that crude oil are getting scarce, oil price are getting higher through the years. Making all the commodities high also because of the mode of transportation is expensive. Therefore, by innovating and patterning to modern cars using fiber glass, we can make a light weight jeepney design thus making it more fuel efficient so that people who will buy this vehicle will not suffer from high oil price and thus help the community by causing less pollution.
Selection of Design For the selection of design, a well-maintained and comfortable jeepney with dashing cultural design will attract more passengers and could probably serve as a tourist attraction which could be a plus on the feedback of the company. In addition, jeepneys that will be produced are durable and fuel-efficient which can serve the client for a longer time. Also, the company is not just concerned on the design but on how it could be of help to the people. So, so a design of lower foothold which can be more convenient for elderly and children will be included. With this, there is a win to win situation, the company will earn from producing client’s choice jeepneys and the client for renting the jeepney. Also, the company is not just concerned on the jeepney’s physical appearance but on how it could be of help to the people. So, a design of lower foothold which can be more convenient to children and elderly will also be considered in the design. One can choose options for the jeepney. A design with higher capacity of people but more heavier and expensive and a design which is smaller, lightweight and a bit cheaper shall be considered. The larger jeepney is more convenient in busy places and longer route which he can gain much capacity thus making more income. The smaller jeepney is more suitable in shorter routes with low capacity but less expense in terms of oil, thus can make more rides than the larger one without much consideration in terms of fuel expense.
Site of Selection In entering in this kind of business, its overall success depends primarily on three factors: the vehicle, personnel and route. The company will take place near España street, Manila. Since it is one of the busiest road in metro manila, this would be the perfect site setting a site for jeepney business. With regards to site selection, it is best
to implement the business in busier areas, near universities, malls and other landmarks since more passengers are expected looking for transport.
Economy of Tool and Equipment Maintenance In a jeepney business, the company is expected to put budget on the repair and maintenance of the manufactured product. Since jeepneys will be purchased on the company, it is assured that we shall provide everything from oil changes to engine repairs.
Economy in the Utilization of Personnel For a starting company, there will be departments designated such as marketing, production, and technical department. The company should be hiring people capable of producing jeepneys. People who have knowledge on maintaining and repairing jeepneys would be a basis for hiring personnel. Applicants who have a great sense of business are greatly considered.
Two Options for the following: 1. Selection of Material In the production of jeepneys, there is a battle between the price of the materials and how they perform. Thus, two options are: efficiency cost
in this kind of business, price is not only the thing to be considered. It is also about how each material contributes to the efficiency of the product.
2. Selection of Method When things became worst, the company could choose between these methods: To continue production To buy and improve second hand jeepneys
Producing new jeepneys would probably be good for the company since it aims to manufacture jeepneys and rent it sooner or later. However, it is much easier to just buy second hand jeepneys and customize it the way the client wanted it to be. 3. Selection of Design For the design, the company could choose on these two options: Larger unit (high capacity but higher fuel consumption) Smaller unit (less capacity but lower fuel consumption)
4. Site Selection In selection of site, the company could take note of the following options: Busier and longer target areas Busier but shorter target areas
The company would probable chose busier areas since there are more passengers and there is a big need for a mean of transportation. However, in the production of jeepneys, the company should take into consideration the capacity of the produced jeepneys. Longer target areas would have more passengers but a shorter target area would have more competitions.
5. Comparison of Proficiency of Workers The company could have divided workers on two departments: Production Rent to Own Process
There should be workers assigned on the production department to ensure the quality and to follow the time table of the company. On the other hand, there should be assigned people who would do the negotiations when it comes to renting and maintenance of the produced jeepneys.
6. Economy of Tool and Equipment Maintenance For the economy of tool and equipment maintenance, the company could have two options: Part of the agreement or warranty Let the owner maintain the purchased jeepney
7. Economy in the Utilization of Personnel In the utilization of personnel, the departments designated are the following: . Technical department (may consist 5-10 personnel) Production department (may consist 15–25 personnel) Marketing department (may consist 5-10 personnel)
B. AMOTRIZATION Customers may choose their amortization process from the following:
1. No down payment Interest = 10% (compounded monthly) A = ₱700 daily = ₱21000 monthly Future amount = ₱555 385.22 Own in 2 years!!
(IF DP = 0)
F = A [(1+i)mt – 1] / i A = Fi / (1+i)mt A = [555, 385.22 (.10/12)] / (1+.10/12)12(2) A = ₱21000.00
2. With 10% Down payment, and get ₱5385.22 discount cost = ₱550000.00 i = 10% (compounded monthly) A = ₱124.50 DP = 10% = 55000 Own in 1 year!!
Cost = F + DP
; DP = 55000
F = 550,000 – 55,000 = 495,000
A = Fi / (1+i)mt A = [495,000 (.10/12)] / (1+i) A = ₱124.50
12(1)
C. DEPRECIATION
For the depreciation, I would choose Sum-of-year’s digit method. I found it more suitable because the depreciation charges are uniform every year. In that case, the chance of bankruptcy of the company is less.
D1 = (Co – Cn) ( n / Σ years) Where; Σ years = [n (n+1)] / 2 Assume; Cn = 30000 Co = 555385.22
Σ years = [1 (1+1)] / 2 = 1 D1 = (555385.22 – 30000)( 1/1 ) D1 = ₱525,385.22 --- depreciation after 1 year
D2 = ( Co – Cn) ( n / Σ years) Where; Σ years = [ 2(2+1)] /2 Σ years = 3 Assume; Cn = 27000 D2 = (555385.22 – 27000) [(2-1) / 3] D2 = ₱176,128.41
