App.

1
Feasibility Study
 Introduction
 Types of Feasibility
 Steps of Feasibility Study
 An Example

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 Introduction

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 What is Feasibility Study:
• A feasibility study or assessment is an analysis of
the viability of an idea.
• It focuses on helping answer the essential
question of:-
"should we proceed with the proposed project
idea?"
• All activities of the study are directed toward
helping answer this question.

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 • During the feasibility process you may
investigate a variety of ways of organizing the
business and positioning your product in the
marketplace.
• The conclusions of the feasibility study should
outline in depth the various alternatives
examined and the strengths and weaknesses
of each.
• The study will help you assess the tradeoff
between the risks and rewards of moving
forward with the business project.
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 • The feasibility study will be a major
information source in making this decision.
• This indicates the importance of a properly
developed feasibility study.
• The inputs of the feasibility study are: the
proposed idea, the desired goals and the
available capabilities (financial, technical, and
managerial).
• The output of the feasibility study is: an
advisory answer to proceed or not, but the
final decision (yes or no) is left to the owners.
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 Types of Feasibility

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 1. Market Feasibility
• The market needs analysis to view the potential
impacts of market demand, competitive
activities, etc. and market share available.
• Possible competitive activities by competitors,
whether local, regional, national or
international, must also be analyzed for early
contingency funding

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 2. Technical Feasibility
• This area reviews the engineering feasibility of
the project, including :
– Available technologies and infrastructure
support
– Labor availability and technical capability
– Technology transfer and training
– Procurement plans for production lines and
equipment

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 3. Managerial Feasibility
• The are key elements required to ascertain
managerial feasibility include:
– Well suited organizational structure to the
type of the undertaken Project.
– Demonstrated management capability and
availability
– Employee involvement and commitment

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 4. Economic Feasibility
• This involves the feasibility of the proposed
project to generate economic benefits.
• A benefit-cost analysis, and a breakeven analysis
are required aspects of evaluating the economic
feasibility of a project.
• The tangible and intangible outcomes of a
project should be translated into economic
terms for consistent basis of evaluation.
• Even when a project is non-profit in nature,
economic feasibility is critical.
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 5. Financial Feasibility
• Financial feasibility involves the capability of the
project organization to raise (expand) the
appropriate funds needed to implement the
proposed project.
• In many instances, project proponents (supporter)
choose to have additional investors or other
sources of funds, including loans, for their projects.
• In these cases, the soundness (payback ability) of
these project funds can be an obstacle.

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 6. Position Feasibility
• The location of the production facility should
be close to the raw materials sources,
market, and labors.
• In the same time the price of the land should
be reasonable.

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 7. Cultural Feasibility
• Cultural feasibility deals with the compatibility
of the proposed project with the cultural
environment of the project.
• In labor-intensive projects, planned activities
must be integrated with the local cultural
practices and beliefs.
• For example, religious beliefs may influence
what an individual is willing to do or not do.

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 8. Social Feasibility
• Social feasibility addresses the influences that a
proposed project may have on the social system
in the project environment.
• The ambient social structure may be such that
certain categories of workers may be in short
supply or nonexistent.
• The effect of the project on the social status of
the project participants must be assessed to
ensure compatibility.

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 9. Safety Feasibility
• Safety feasibility refers to an analysis of whether
the project is capable of being implemented and
operated safely with minimal adverse effects
on the environment.
• Unfortunately, environmental impact
assessment is often not adequately addressed in
complex projects.

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 10. Political Feasibility
• Political considerations often dictate directions
for a proposed project.
• This is particularly true for large projects with
significant visibility that may have significant
government inputs and political implications.
• Political feasibility analysis requires an evaluation
of the compatibility of project goals with the
prevailing goals of the political system.

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 11. Environmental Feasibility
• This is an aspect worthy of real attention in the
very early stages of a project.
• Concern must be shown and action must be
taken to address any and all environmental
concerns raised or anticipated.
• This component also addresses the ability of the
project to timely obtain and at a reasonable
cost, needed permits, licenses and approvals.

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 Sections of Feasibility Study###

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 As a conventional way of writing the feasibility
study, it is categorized and arranged in four
sections as shown below:

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 1. Market Study
• The market study should cover the following
items:
– Demand of the market (local and international) →
The target Volume of the produced items.
– Specification, quality, and market price of the
required items → The target Specification, quality,
and price of the produced items.
– The market sales systems and regulations → The
target sale policy.

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 2. Technical (organizational, and Position) Study
• The technical study should cover the following
items:
– Position and Layout of the production facility
– Available technologies and infrastructure support
– Labor availability and technical capability
– Technology transfer and training
– Procurement plans for production lines and
equipment

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 3. Financial and Economical Study
• The financial and economical study should cover
the following items:
– Budged estimate, and cash flow rate.
– Final product price.
– Cost-Benefit analysis of the project.
– Payback period of the project.

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 4. Environmental (Social, Culture, Political, and Safety)
Study
• The environmental study should cover the following
items:
– The bad impact of the proposed project on the
environment should be eliminated or at least minimized.
– The culture and safety of the working personnel should be
considered.
– The working opportunities which are created and offered
to the society are considered as benefit of the project.
– Compatibility of the project and the political system goals

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 An Example
www.ProjectManagementDocs.com

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