Different Types of Feasibility Studies
Feasibility Analysis is an analytical program through which project manager determines the project success ratio and through feasibility study project manager is able to see either project will useful for us or not and how much time, it will take to get completed.
There are certain important types of a feasibility study which are as follows:
Technical Feasibility Study
Managerial Feasibility Study
Economic Feasibility Study
Financial Feasibility Study
Cultural Feasibility Study
Social Feasibility Study
Safety Feasibility Study
Political Feasibility Study
Environmental Feasibility Study
Market Feasibility Study
Technical Feasibility Study
The engineering feasibility of the project in viewed in the technical feasibility. Certain important engineering aspects are covered which are necessary for the designing of the project like civil, structural and other relevant aspects. The technical capability of the projected technologies and the capabilities of the personnel to be employed in the project are considered.
In certain examples especially when projects are in third world countries, technology transfer between cultures and geographical areas should be analyzed. By doing so productivity gain (or loss) and other implications are understood due to the differences in fuel availability, geography, topography, infrastructure support and other problems.
Managerial Feasibility Study
Managerial feasibility is ascertained by certain key elements like employee involvement, demonstrated management availability & capability and commitment. The managerial and organizational structure of the project is addressed by this feasibility which ensures that the proponent’s structure mentioned in the submittal is feasible to the kind of operation undertaken.
Economic Feasibility Study
Economic feasibility refers to the feasibility of the considered project to produce economic benefits. A benefit-cost analysis is needed. Furthermore, the economic feasibility of a project can also be evaluated by breakeven analysis. In order to facilitate the consistent basis for the evaluation, the tangible and intangible facet of a project must be translated into the economic terms. Economic feasibility is critical even when the project is non-profit in nature.
Financial Feasibility
Financial feasibility must be differentiated from economic feasibility. The ability of the project management to raise sufficient funds required to implement the proposed project is included in the financial feasibility. Additional investors and other sources of funds are considered by the project proponents for their projects in many cases.
In such situations feasibility, sources, soundness and applications of these project funds may be a hindrance. Other aspects of financial feasibility should also be viewed, if appropriate, like creditworthiness, loan availability, equity, and loan schedule. The implications of land purchase, leases and other estates inland are also reviewed in the financial feasibility analysis.
Cultural Feasibility Study
The compatibility of the proposed project with the cultural environment of the project is included in the cultural feasibility. Planned operations should be integrated with the local cultural beliefs and practices in labor-intensive projects. For example, what a person is willing to perform or not perform is influenced by his religious beliefs.
Social Feasibility Study
The effect that a proposed project may have on the social system in the project environment is addressed in the social feasibility. It may happen that a particular category of employees may be short or not available as a result of ambient social structure.
The influence on the social status of the participants by the project should be evaluated in order to guarantee compatibility. It must be identified that employees in particular industries may have specific status symbols within the society.
Safety Feasibility Study
Another important aspect that must be considered in project planning is safety feasibility. Safety feasibility involves the analysis of the project in order to ascertain its capacity to implement & operate safely with the least unfavorable effects on the environment. Mostly in complex projects, environmental impact assessment is not properly addressed.
Political Feasibility Study
The directions for the proposed project are mostly dictated by political considerations. This is certainly correct for large projects with potential visibility that may have important political implications and government inputs. For example, regardless of the merit of the project, the political necessity may be a source of assistance for a project.
On the other hand, because of political factors, value able projects may face uncontrollable opposition. An evaluation of the objectives of the project with the current objectives of the political system is required in the political feasibility analysis.
Environmental Feasibility Study
The environmental aspect is very crucial in making any potential project successful or failed. In the very early stages of the project, this aspect should be considered. All the environmental concerns raised or forecasted should be addressed in environmental feasibility so that proper actions can be taken to cover relevant issues of the environment.
The ability of the project to timely acquire the required permits, licenses and approvals at a reasonable cost should also be included in this area.
Market Feasibility Study
Market feasibility must not be mixed up with economic feasibility. The potential influence of market demand, competitive activities and available market share should be considered in the market feasibility analysis. During the start-up, ramp-up and commercial start-up phases of the project, possible competitive activities (local, regional, national and international) should be analyzed for early contingency funding and impacts on the operating costs.
