Please make introduction and background of the study only.

ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN:9780190931919
Author:NEWNAN
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Chapter1: Making Economics Decisions
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Please make introduction and background of the study only.

Case 11. BUGTAG CHEMICAL CORPORATION: Help
Samuel Bugarin and Antonio Tagorda were class-
mates at the Chemical Engineering Department of De la
Salle University. After passing the board examinations
in 1981, Engineer Bugarin applied for a job in a chemical
manufacturing company. He first worked as an assis-
tant in the quality control unit. Later, he became chief
of the unit. He handled various jobs in the production
department. Because of his good performance, he was
promoted to production manager in 1993.
Engineer Tagorda got a job in 1982 as production
planner of Reliance Chemical Company. In 1990, he was
assigned as assistant production manager. When the
company's marketing manager resigned in 1991, he was
transferred to the marketing department and was named
as the new marketing manager. His main function was
to market the company's products consisting of synthetic
resins, aluminum paste, adhesives, plasticizers, calcium
sulfate, etc. When he assumed his post as marketing
manager, the company is already serving a group of loyal
customers. The increasing requirements of these cus-
tomers also meant additional orders for the company's
products. The company's sales increased even if the
number of its customers did not.
In a class reunion held in April 1997, Samuel and
Antonio met and they conversed for more than three hours.
Samuel mentioned that he had started organizing his
own chemical manufacturing firm and he wanted Antonio
to join him. Antonio agreed and in a subsequent meet-
ing decided to divide the work between the two of them.
Samuel was to take care of production and Antonio would
handle marketing. They decided to invite an experienced
finance officer and a high school classmate, Edgardo
Abuan. He became the company's finance manager.
The company was registered as a stock corporation
and the capital contribution of the stockholders
follows:
Name of the Stockholder Amount of Capital Contribution
1. Samuel Bugarin
2. Antonio Tagorda
3. Edgardo Abuan
4. Jesus Uala
5. Rosario Mariano
& Ausberto Taguinod
7. Francisco Bundoc
8. Amparo Paragas
3. Andres Nicolas
Total
P30,000,000
15,000,000
3,000,000
1,000,000
1,000,000
1,000,000
1,000,000
1,000,000
1,000,000
P54,000,000
The three agreed to produce caustic soda liquid,
hydrochloric acid, soda ash, sodium sulphate, sodium
tripolyphospate, and sulfuric acid. The construction of the
company's plant has already begun in Dasmariñas, Cavite.
The compay has been named the Bugtag Chemical Cor-
poration.
Samuel has already started organizing the product-
ion department by hiring a production planner. Antonio
is still considering what steps to take in organizing his
department. One of his problems is the lack of informa-
tion regarding the nature of the market the company must
tap. Also, Antonio is aware of the utmost importance of
providing the production department with a demand fore-
cast for the company's products.
Transcribed Image Text:Case 11. BUGTAG CHEMICAL CORPORATION: Help Samuel Bugarin and Antonio Tagorda were class- mates at the Chemical Engineering Department of De la Salle University. After passing the board examinations in 1981, Engineer Bugarin applied for a job in a chemical manufacturing company. He first worked as an assis- tant in the quality control unit. Later, he became chief of the unit. He handled various jobs in the production department. Because of his good performance, he was promoted to production manager in 1993. Engineer Tagorda got a job in 1982 as production planner of Reliance Chemical Company. In 1990, he was assigned as assistant production manager. When the company's marketing manager resigned in 1991, he was transferred to the marketing department and was named as the new marketing manager. His main function was to market the company's products consisting of synthetic resins, aluminum paste, adhesives, plasticizers, calcium sulfate, etc. When he assumed his post as marketing manager, the company is already serving a group of loyal customers. The increasing requirements of these cus- tomers also meant additional orders for the company's products. The company's sales increased even if the number of its customers did not. In a class reunion held in April 1997, Samuel and Antonio met and they conversed for more than three hours. Samuel mentioned that he had started organizing his own chemical manufacturing firm and he wanted Antonio to join him. Antonio agreed and in a subsequent meet- ing decided to divide the work between the two of them. Samuel was to take care of production and Antonio would handle marketing. They decided to invite an experienced finance officer and a high school classmate, Edgardo Abuan. He became the company's finance manager. The company was registered as a stock corporation and the capital contribution of the stockholders follows: Name of the Stockholder Amount of Capital Contribution 1. Samuel Bugarin 2. Antonio Tagorda 3. Edgardo Abuan 4. Jesus Uala 5. Rosario Mariano & Ausberto Taguinod 7. Francisco Bundoc 8. Amparo Paragas 3. Andres Nicolas Total P30,000,000 15,000,000 3,000,000 1,000,000 1,000,000 1,000,000 1,000,000 1,000,000 1,000,000 P54,000,000 The three agreed to produce caustic soda liquid, hydrochloric acid, soda ash, sodium sulphate, sodium tripolyphospate, and sulfuric acid. The construction of the company's plant has already begun in Dasmariñas, Cavite. The compay has been named the Bugtag Chemical Cor- poration. Samuel has already started organizing the product- ion department by hiring a production planner. Antonio is still considering what steps to take in organizing his department. One of his problems is the lack of informa- tion regarding the nature of the market the company must tap. Also, Antonio is aware of the utmost importance of providing the production department with a demand fore- cast for the company's products.
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