This document discusses feasibility studies in project management. It defines a feasibility study as analyzing the viability of a proposed project to support investment decisions. There are three main types of feasibility studies: technical, which evaluates resources and competence; operational/behavioral, which assesses practices and legal issues; and economic, which identifies costs and benefits. A feasibility study also examines market demand, financial projections, environmental and social impacts, and management capabilities to determine if a project is worth pursuing. The document outlines the typical contents and process for conducting a feasibility study.

1. Feasibility study in Project Management
Section 1 Group 3 members

2. Introduction
o This presentation focuses on the following major
points;
o The concept of project feasibility
o Types of feasibility study
o Other feasibility studies
o Objectives of feasibility studies
o Content of feasibility studies
o Exploring feasibility

3. 1. What is feasibility study? – (the concept)
o Feasibility study is related to analyze the viability
of the identified project to support decision making
of investment.
o It is a study to decide whether the identified project
is attractive to go for implementation
o It needs inputs from many professional disciplines
for various areas of the study

4. 2. Types of feasibility study
 There are three basic classifications;
a) Technical: Resource, competence, skill and related
important things will be evaluated under this.
b) Operational/behavioral: to find out if there is
resistance, Practicability, Knowledge and related issues.
Legal issues and technology should be assessed here.
c) Economical: important to identify benefits and cost of
operations, training, inputs, equipment and related issues. In
addition time required to achieve return of investment can be
evaluated.

5. 3. Other feasibility studies
 Market feasibility: involves testing the geographic
locations to select the best location.
 Resource feasibility: to determine the time
available to build the new system, type and amount
of resource.
 Cultural feasibility: to evaluate project impacts on
the local and general culture.
 Financial feasibility: financial availability, cash
flow, profitability should be evaluated.

6. 4. Objective feasibility study
o To find if there is adequate demand for the
project’s output.
o To find if there is availability of suitable
technology and inputs
o To find the best options
o To answer if the project meets the environmental
regulations and priority of the nations
o To examine the project’s financial and economic
viability

7. 5. What are the contents of feasibility study
a) Demand and Market Analysis
b) Technical Analysis
c) Management Analysis
d) Financial Analysis
e) Economic Analysis
f) Environmental Analysis
g) Social Analysis

8. a) Market & Demand analysis
o Market & demand analysis look at the need of the project
& help to estimate demand
o It is the key activity for determining the scope of an
investment, the possible production programs, the technology
required and the choice of location.
o Focuses on:
 Aggregate demand for the product/service
 The share of unfulfilled demand
 Demand forecasting
 Market price of product/service
 Analysis of competitors, their strength weakness
 Distribution mechanism

9. b) Technical analysis
 Every project must be technically feasible.
 Technical analysis is related to examine whether the
project under study is technically feasible to setup
and operate to produce service/product.
 For example, in agriculture project of a single item
needs analyzing farming, types of field, soil test,
temperature required in selected location, location
selection, plantation distance of between plants,
variety … needs to be analyzed.

10. Technical cont…
o Investment cost and operational cost of different
technology/process
o Environmental aspects of different technology
o Location aspects of the project and availability of
infrastructural facilities with probable alternative
locations
o Inputs: Availability of electricity, water, fuel, raw
materials
o Size and scale of operations: based on the
demand, capital requirement, and technology,
inputs available

11. c) Management analysis
o If the management is incompetent, even a good
project may fail. So it looks at:
o Types of organization
o Academic qualification, and experience of key
persons
o Availability of personnel required for project
execution.
o Assessment of other specific skills required for the
project
o User’s role in case of development projects etc.

12. d) Financial analysis
o The scope of financial appraisal varies
considerably with the nature of project and
whether it is revenue producing (e.g. industry,
agriculture) or not (e.g. roads, public schools).
o Financial analysis covers:
 Investment Cost Estimation
 Operating Cost Estimation
 Benefits Estimation
 Cost Benefits Comparison
 Project Selection Decision

13. e) Economic analysis
o Economic analysis estimate and analyze the
project’s net contribution to the whole economy of
the region or country.
o It helps determine whether the project increases the
net wealth of a region or country as a whole or not.
o Estimation of Economic Costs of Projects
o Estimation of Economic Benefits of Projects
o Comparing Costs and Benefits

14. f) Environmental analysis
o A project may causes environmental impacts in
many ways
o Identification and analysis of adverse effects on the
environment
o Identification of positive impacts
o Required Mitigation measures
o Designing environmental management plan
o Provision of fund for environment management plan

15. g) Social analysis
o A project may causes social impacts in many ways
o Will the project have any adverse effects on the
society?
o What are positive and negative impacts
o Viable measures to address negative impacts
o Estimating cost for addressing social impacts

16. 6. Exploring feasibility study – How to initiate
the feasibility study?
o Appointment of an experienced manager and
Selection of study team members
o Scope of the study
o External Advisers to support study team
o Plan and Schedule the Study
o Starting study as per plan and schedule
o Controlling study to complete as per per plan and
schedule