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4. technical feasibility

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4. technical feasibility

  1. 1. TECHNICAL FEASIBILITY
  2. 2.  A business is considered technically andoperationally feasible if it has the necessaryexpertise, infrastructure and capital to develop,install, operate and maintain the proposedsystem, and that by establishing such a system, thebusiness will be able to deliver goods or servicesat a profit. When considering a new business, it is important toconsider if there is sufficient access to resources. Oneof the primary reasons that new business fails isunder-capitalisation - not enough money to keepthe business going from startup until it starts to makea profit. This can lead to a lack of resources.
  3. 3. WHAT SHOULD BE DONE?
  4. 4. 1. SELECT THE PRODUCT (S) &/OR SERVICE (S) THE MANUFACTURING/PRODUCTION PROCESS THE CAPACITY & DESIGN THE SUPPLIES THE LOCATION THE LAY OUT THE STRUCTURES SPECIFICATIONS THE RAW MATERIALS & THEIR SOURCES
  5. 5. 2. DETERMINE THE QUANTITY & QUALITY OF THE PRODUCT (S)& SERVICE (S) TO BE PRODUCED THE LABOR NEEDED, BOTH SKILLED &UNSKILLED THE UTILITIES REQUIRED THE WASTE DISPOSAL METHOD THE TRANSPORTATION NECESSARY
  6. 6. 3. PROVIDE ESTIMATES OF THE TOTAL PROJECT COST, &ENUMERATE THE MAJOR ITEMS OF CAPITALCOST
  7. 7. 4. LIST DOWN IN DETAIL THE ESTIMATED PRODUCTION & OVER HEADCOSTS THAT WILL GO INTO OPERATING THEPROPOSED PROJECT
  8. 8. 5. TAKE INTO CONSIDERATION THE MAJOR TECHNOLOGICAL DEVELOPMENT INTHE INDUSTRY WHICH MAY AFFECT THECOMMERCIAL OR TECHNICAL SOUNDNESS OFTHE PROJECT.
  9. 9. THE TECHNICAL STUDY IS PRESENTED BYDESCRIBING & MAKING NECESSARYCALCULATIONS FOR THE FOLLOWING:
  10. 10. A. THE PRODUCT(S)/SERVICE(S) THIS PORTION DESCRIBES THE PRODUCTS ORSERVICES TO BE PRODUCED/PROVIDED & SOLD. WHICH SPECIFIES THE PRODUCTS’ PHYSICAL, MECHANICAL, &CHEMICAL PROPERTIES THEIR VARIOUS USES, BOTH AS FINISHED GOODS& INDUSTRIAL INPUTS.
  11. 11. B. MANUFACTURING/ PRODUCTIONPROCESS THE SELECTED MANUFACTURING/PRODUCTIONPROCESS MUST BE DESCRIBED SIMPLY & CLEARLY,PREFERABLY WITH THE AID OF FLOW CHARTS ANDDIAGRAMS. THE ALTERNATIVE PROCESSES & THE WAY THEYCOMPARE WITH THE CHOSEN PROCESS MUST BEMENTIONED. THE ANALYSIS SHOULD FURTHER TOUCH ON THEMANUFACTURING/PRODUCTION PROCESSES USED INEXISTING BUSINESSES WITH THE SAME OR SIMILARACTIVITY, BOTH DOMESTIC & FOREIGN. LICENSING AGREEMENTS & PATENTS SHOULD ALSOBE REVIEWED.
  12. 12. C. SIZE OF THE BUSINESS & PRODUCTIONSCHEDULES MINIMUM & MAXIMUM RATED CAPACITY FIXED COSTS ACTUAL CAPACITY UTILIZATION THE NUMBER OF SHIFTS PER DAY NUMBER OF OPERATING DAYS PER YEAR
  13. 13. D.PRODUCTION SCHEDULES THE EXPECTED GROWTH IN MARKET SHARE THE AVAILABILITY OF FINANCING FOR POSSIBLEEXPANSION THE AVAILABILITY OF MORE RAW MATERIALS THE LEVEL OF UTILIZATION OF PLANT CAPACITY
  14. 14. E. MACHINERY & EQUIPMENT IDENTIFIED & INDIVIDUALLY LISTED ACCDG TOTYPE & USE SPECIFICATIONS, CAPACITIES & COSTS MUST BEDESCRIBED IN DETAIL THE ORIGIN OF THE MACHINERY & EQUIPMENT,WHETHER LOCAL OR IMPORTED THE MANNER OF & COST OF TRANSPORTINGTHEM MUST BE INDICATED
  15. 15. E. MACHINERY & EQUIPMENT What type of equipment and technology will the businessneed to produce its product/service? What costs are involved to purchase and set up theequipment? What are the costs involved in the ongoingrunning of the equipment? EQUIPMENT SUPPLIERS: Who are the potential suppliers of the equipment? Where are they located? What sort of service and warranties do they provide? How long will it take to acquire the equipment and beginoperations?
  16. 16. F. LOCATION A THOROUGH & COMPARATIVE ANALYSIS FOR EACHPOTENTIAL LOCATION SHOULD BE MADE TO DETERMINETHE MOST IDEAL SITE. IT HAS TO CONSIDER THE FOLLOWING FACTORS: THE ACCESSIBILITY TO, & AVAILABILITY OF, RAW MATERIALSOURCES THE AVAILABILITY OF CHEAP OR MODERATELY-PRICEDUTILITIES SUCH AS POWER, WATER, OR FUEL THE COMBINED COST OF TRANSPORTING RAW MATERIALS &FUEL TO THE SITE THE PROXIMITY TO DISTRIBUTING OUTLETS THE AVAILABILITY OF SKILLED & UNSKILLED LABOR MAPS & CHARTS OF THE PROPOSED SITE MUST BEINCLUDED
  17. 17. G. LAYOUT THE LAYOUT SHOULD BE CLEARLY DEPICTEDTHROUGH DIAGRAMS & DESCRIPTIONS. A GOOD LAYOUT IS CHARACTERIZED BY MINIMUM MATERIAL HANDLING EFFECTIVE SPACE UTILIZATION SMOOTH WORK FLOW SAFE & CONDUCIVE WORKING AREA FOR THEWORKERS SAFETY AND SANITATION FACILITIES, & FLEXIBILITY OF ARRANGEMENTS
  18. 18. H. BUILDING & FACILITIES What are possible locations for the facility (office/manufacturingplant)? What size facility is needed? What are the costs involved in the building? Do you need to fit itout? How much will it cost to get all necessary utilitiesconnected? Does the proposed location have adequate access toinfrastructure and services such as highways, railway andutilities? Will you need to build your own facility, or purchase an existingone? Where will the facility be located in relation to your customers? Who will be responsibile for transport of goods between thefacility and the market? What are the costs involved?
  19. 19. H. BUILDING & FACILITIES THE SITE, TYPE, & COSTS OF THE BUILDING ANDLAND, AS ENVISIONED IN THE PROJECT, SHOULDACCURATELY BE PRESENTED. THE CONSTRUCTION COST OF THE BUILDING &FACILITIES SHOULD BE PRESENTED AS ADAPTEDTO THE MACHINERY & EQUIPMENT THAT WILLBE USED IN THE PROJECT. LAND IMPROVEMENTS SUCH AS ROADS,DRAINAGE FACILITIES, ETC. & THEIR RESPECTIVECOSTS SHOULD BE COMPUTED & INCLUDED.
  20. 20. I. RAW MATERIALS & SUPPLIES THE REQUIRED RAW MATERIALS SHOULD BE LISTEDDOWN AND THE BASIS FOR THEIR SELECTION MUSTPRESENTED. DESCRIPTIONS AND SPECIFICATIONS ON THEIRPHYSICAL, MECHANICAL, AND CHEMICALPROPERTIES MUST ALSO BE GIVEN. CURRENT AND PROSPECTIVE COST OF RAWMATERIALS, THE AVAILABILITY AND CONTINUITY OFSUPPLY, AND THE CURRENT PROSPECTIVE SOURCESSHOULD ALSO BE INCLUDED. THE VOLUME REQUIRED AT VARIOUS PHASES OFOPERATIONS MUST BE CLEARLY PRESENTED.
  21. 21. J. UTILITIES THIS PORTION DESCRIBES THE AMOUNT, COST,AND SOURCES OF ELECTRICITY, FUEL, WATER,AND/OR STEAM REQUIRED. THIS MUST BE DETERMINED IN RELATION TOTHE PRODUCTION SCHEDULE AND CAPACITYUTILIZATION DEFINED. ALTERNATIVE SOURCESOF THESE UTILITIES AND THE FEASIBILITY OFTHEIR USE MUST ALSO BE DESCRIBED.
  22. 22. K. WASTE DISPOSAL A DESCRIPTION OF THE QUANTITY, MANNER OFDISPOSAL, AND THE COST INVOLVED IN DOINGAWAY WITH EXPECTED WASTE FROMPRODUCTION IS NECESSARY. THE ANALYSIS MUST BE EXPANDED TOCONSIDER THE POSSIBILITIES OF FURTHERUSING THESE WASTES.
  23. 23. L. PRODUCTION COST THE MONETARY ASPECT OF ALL THEPRODUCTION PLANS IS PUT INTO PERSPECTIVE. HOW MUCH DOES IT COST TO PRODUCE ONEUNIT OF OUTPUT? TO ARRIVE AT THIS, THE FF MUST BEDETERMINED: RAW MATERIAL COSTS LABOR COST OVERHEAD COST( FIXED COST), OPERATING COSTS(VARIABLE COSTS) OTHER PERTINENT COSTS
  24. 24. M. LABOR REQUIREMENT THE VARIOUS JOBS AND FUNCTIONS NECESSARY FOR THEOPERATIONAL STAGE MUST BE DESCRIBED. FOR COSTING, LABOR IS GENERALLY CLASSIFIED INTOTHREE TYPES: DIRECT INDIRECT ADMINISTRATIVE THE NUMBER OF WORKERS TO BE EMPLOYED FOR EACHJOB CLASSIFICATION THE PAY SCALES EMPLOYEES DEVELOPMENT PROGRAMS THE ORGANIZATION SET-UP THE AGGREGATE LABOR COSTS
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  30. 30. STILL NOT CONVINCED?
  31. 31. THAT’S ALL!!! THANKS AND GOD BLESS YOU!!!

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