project feasibility bydr. ali sajid. education & training " a person who graduated,...

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