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PROJECT PROJECT FEASIBILITYFEASIBILITY
By Dr. Ali Sajid
By Dr. Ali Sajid
Education & Training "A person who
graduated, yesterday and stops
studying today is uneducated tomorrow."
Fear & Wisdom
"To conquer fear is the
beginning of wisdom."
(Bertrand Russell)
Feasibility 1.Viability of Idea
2. Analyzing Feasibility ( Possibility) of Proj- Possibility of Completion ? Will it be Successful 3.Reasonable likelihood - constraints Will Not prevent a proj from meeting key obj 4.Synonym: Achievability
5.“Plng & Orgzg Procedure”-To Ensure Proj is Effective -It will work”.
FeasibilityReasonable likelihood that
Constraints on “Time” & Other “Resources”
will not Prevent a Project from
meeting its Key Objectives
What is Feasibility?Capable of being done,
with means at Hand &
Circumstances, as they are.
Purpose of a FS – To help assess
“Viability of a business idea-
Technically, Operationally & Economically”
Feasibility Assessment?
Is the disciplined & documented process of thinking through
an idea from its “Logical beginning to its Logical End”.
This is to determine its Potential to be a viable business
given realities of the Economic & Social environment in which it will operate
Provide Client with a solid foundation upon which a project is built.
FS Provides
– Concept identification, – Estimates of supportable market, – Design parameters, – Estimates, – Revenue projections– Net warranted investment.
Essentially Road map of proj
Process of Analysis
Identify problem oropportunity
Set up feasibility
study
Define scope and
objectives
Carry out different aspects
of the study
Recommend –proceed/shelve
Evaluatealternatives –develop/buy
Scope StatementScope Statement
A written statement includes:
• Project Justification
• Project Objectives
• Major Deliverables
• Criteria: Project/ or Phase Successfully Completed
A written statement includes:
• Project Justification
• Project Objectives
• Major Deliverables
• Criteria: Project/ or Phase Successfully Completed
Project CharterProject Charter
• Formally Recognizes Existence of a Proj
• Gives PMgr Authy to Apply Resources to Proj, Univ Charter
• Product to be Delivered ?
• Refers to Business Need Proj is Addressings
Types of FeasibilityTechnical FeasibilityManagerial FeasibilityEconomic FeasibilityFinancial FeasibilityCultural FeasibilitySocial FeasibilitySafety FeasibilityPolitical FeasibilityEnvironmental FeasibilityMarket Feasibility
…Tech Feasibility- First systematic
investigation of Proj Design Viability.Foundation of all other FS .
- Assessment of a Proj Capabilities.-Investigation of Technical & Physical Para/mtrTF Reviews:
-Technical Capability of HR -Capability of Available at Technical side
Foreign consultants Role -LDCs-Too rigid, & Advanced Tech Spec - Cannot be met by Country.
Question is “Can it be built?”
Technical Feasibility (TF)Anticipate Broader Problems with Questions:
1. Adequate “Choice of Available Technologies for Alternative Design” purposes, considering:
a. Physical layout
b. Engineering design
c. Availability of raw materials?
2. Costs of Constructing & Operating P-Facilities - Svc
a) Machinery, b ) Equipment, c) Spare Parts?
3. Manpower Req:
a) From professional to labor
b) locally available?
c) Responses vary – sector to sector
Technical Feasibility (TF) Contd..Primary task of TF is Blueprinting:
a) Manpower Needs
b) Resources, and Design
c) Provide Design Alternatives
d) A Choice of Available Technologies,
& Cost estimates for each alternative.
Admin/Managerial Study (AM S) Evaluates Strategy of company in C/ Out Proj Activities.
Providing info & Guidelines-
Used to improve overall Proj Admn.
Project mgr in investigating team.
Examines 4 Components:
A. External linkages,
b. Internal organization,
c. Personnel, and
d. Mgt plan
Economic Study (Econ S)
Examines a Proposed P-in terms of:
Net Contribution to Industry /Economy & To society”.
Address 3 Related Questions:
P-Responsive to “Urgent Present or Anticipated Econ/Social” need?
2. P-Planned Econ o/p Serve Intended Purpose?
3. Svc Proposed to be Performed by P-
4. Benefits - Justify P - Cost?
Economic Study (Ec S) Reqs: Study of all of Econ Implications of P:
a) Demand & Supply of All P- O/P.
b) P- Ability to Inc employment
c)P- “Multiplier" Effects (-Inc Purchase of goods Effect
d) Effect on inc PS Revenue (income tax, sales),
e) use of Locally Available resources.
Assess P- Net Contribution to Econ/social welfare of community.
Comparison of Econ & Social Benefits-genrtd
From P-Vs Costs of Construction & Ops.
B > C Proj- Economically feasible. Profitability analysis is conducted.
Economic Feasibility (Econ F)
1. Summary of Economic B/C of Proj
2. Extent to which savings Passed on
4. Optimum timing of Proj
5. Sensitivity Analysis1. Considering influence of variations of critical P/M
2. discount rates,renergy cost, Construction costs, Tfc forecasts.
6. Conclusions as to Econ F or not
…
Financial Feasibility- Capability of Proj Org -Raise Funds to implement
proposed proj(different from economic feasibilityCultural Feasibility- Compatibility of Proposed Proj vs cultural setup
of Proj environmentSocial Feasibility- Addresses influences – of P-on Social System in
Proj Environment Safety Feasibility Considered in Proj Plang. Analysis if Proj Capable of Implementation & Oprtd Safely -Minimal Adverse effects on
masses.
Environmental Feasibility- -Concern must be shown -Action must be taken to address any & all environmental concerns raised or anticipated-Mega Dams issues (Aswan Dam)- New Murree Proj
Political Feasibility
Referred - “Politically Correct Proj." Political considerations often dictate direction for a proposed proj More common in LDC
Proj Feasibility …
Market Feasibility-
Market Variability & impact on Proj.
Not confused with Econ/ FMket needs analysis to view:
a) Potential Impacts of Market DemandB) Competitive Activities, etc. c) “Divertible" Mkt Share -Available