feasibility study
What is feasibility study?
• A feasibility study is an analysis of the viability of an idea through a
disciplined and documented process of thinking through the idea from
its logical beginning to its logical end.
• Feasibility study is carried out in order to assess the viability of a new
project
• It is primary and most important thing in development of a project
Reasons to Do a Study
• Gives focus to the project.
• Narrows the business alternatives.
• Identifies new opportunities.
• Identifies reasons not to proceed.
• Provides valuable information for “go/no go” decision.
• Increases probability of business success by identifying weaknesses
early.
• Provides documentation that the idea was thoroughly investigated.
Types of Feasibility
1. Technical Feasibility
2. Managerial Feasibility
3. Economic Feasibility
4. Financial Feasibility
5. Cultural Feasibility
6. Social Feasibility
7. Safety Feasibility
8. Political Feasibility
9. Environmental Feasibility
10. Market Feasibility
Types of feasibility
1. Technical Feasibility
• First systematic investigation of Project Design Viability.
• Foundation of all other Feasibilities.
• Assessment of a Project Capabilities.
• Investigation of Technical & Physical Parameters.
Types of feasibility
2. Administrative / Managerial Study (Feasibility)
• External linkages,
• Internal organization “Organizational Structure”,
• Personnel,
• Management plan,
• Salary & Reward System.
Types of feasibility
3. Economic Study (Feasibility)
Examines a Proposed Project in terms of:
1. Net Contribution to Industry /Economy
2. Society & environment
Address Four Related Questions:
1. Project Responsive to “Urgent Present or Anticipated Econ/Social” need?
2. Project Planned Economic operation Serve Intended Purpose?
3. Services Proposed to be Performed by Project
4. Benefits vs Cost? Justify of project economy.
Types of feasibility
4. Financial Feasibility
Capability of Project organizer to raise funds to implement proposed project.
Debts Vs ownership of the project
Liquidity Vs profitability
Types of feasibility
5. Cultural Feasibility
Compatibility of Proposed Project Vs cultural setup of Project environment
Local trends, habits, Traditions, Norms
Religious Vs Ethnic Requirements
Common and accepted Vs unwanted activities
Types of feasibility
6. Social Feasibility
Addresses influences of Project on Social System in Project Environment
Can this project solve some social problems?
What is the project’s contribution to reduce social problems?
7. Safety Feasibility
Considered in Project Planning.
Analysis if Project Capable of Implementation & Operated Safely
Minimal Adverse effects on masses.
Types of feasibility
8. Environmental Feasibility
Concern must be shown
Action must be taken to address any & all environmental concerns raised or
anticipated
Mega issues (systematic risk)
Pollution & Contamination of the Air, Water, Lands….
Future health concerns & negative effects
Types of feasibility
9. Political Feasibility
Political considerations often dictate direction for a proposed project
More common in LDC & MENA Area.
Corruption index & politically-project linkages
10. Market Feasibility
Market Variability & impact on Project
Not confused with Economic
Feasibility report
• A feasibility report is the results of a feasibility study. This report
details whether or not a project should be undertaken and the reasons
for that decision.
• Report Content
1. Introduction/Executive Summary
2. Background
3. outline of project
4. Methodology/method of analysis
5. Overview of alternatives
6. Conclusion
7. Recommendation