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Lakshitha Senarathne
BSc (Hons), AMIE(SL)
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
Operational feasibility
◦ Useful for identifying operational problems to be solved, and their
urgency
◦ The “PIECES” framework
P-Performance ,I-Information, E-economy , C-control E-efficiency ,I-
Information, S-services
Environmental feasibility
◦ Environmental impact and their assessment
TYPES OF FEASIBILITY
Market Feasibility
◦ Determine facility needs.
◦ Suitability of production technology.
◦ Availability and suitable of site.
◦ Raw materials.
◦ Other inputs
Organizational/Managerial Feasibility
◦ Business Structure
◦ Business Founders
TYPES OF FEASIBILITY
Financial/Economic Feasibility
◦ Estimate the total capital requirements.
◦ Estimate equity and credit needs.
◦ Budget expected costs and returns
Legal Feasibility
◦ Is the project legally feasible?
◦ Legal requirements.
Feasibility study in a construction project
1. Planning permission.
1. Activity on Arrow
2. Activity on Node
3. Critical Path Method (CPM)
4. PERT (Programme Evaluation and Review Technique)
Activity On Arrow Method
Activity On Arrow
Activity
Excavation
1 2
Nodes
Link bar chart shows the relationship between activities in a particular project.
Predecessor
An Activity that is required to start or finish before the next activity(s) can
proceed.
Successor
An Activity that must start or finish after the previous activity can finish
Predecessor
Successor
Example
A Product design -
B Market research -
C Production analysis A
D Product model A
E Sales brochure A
F Cost analysis C
G Product testing D
H Sales training B, E
I Pricing H
J Project report F, G, I
4
C
F
2
D
A
G J
5 7 8
1 E
I
B
H
3 6
Dummy activity
An artificial activity with zero time duration that only shows a
precedence relationship among activities (usually drawn in
broken arrows)
B D E
1 2 4 5 6
A
C
3
Activity on Node (Precedence
Diagrams)
Activity On Node
ES Activity EF
LS Duration LF
Activity Description Predecessor Duration / month
A Product design - 5
B Market research - 1
C Production analysis A 2
D Product model A 3
E Sales brochure A 2
F Cost analysis C 3
G Product testing D 4
H Sales training B, E 2
I Pricing H 1
J Project report F, G, I 1
Activity and Duration
C F Activity
2 3
A D G J
5 3 4 1
E I
2 1 Duration
B H
1 2
Early start and Finish, Forward Pass
5 C 7 7 F 10 Early Start
2 3
0 A 5 5 D 8 8 G 12 12 J 13
5 3 4 1
5 E 7 9 I 10
2 1 Early Finish
0 B 1 7 H 9
1 2
Forward Pass
Early Start (ES)
Earliest possible start of an activity
ES + Activity Duration = EF
Forward Pass
Calculates an activity’s early dates
Late start and Finish, Backward Pass
5 C 7 7 F 10 Late Start
7 2 9 9 3 12
0 A 5 5 D 8 8 G 12 12 J 13
0 5 5 5 3 8 8 4 12 12 1 13
5 E 7 9 I 10
7 2 9 11 1 12
Late Finish
0 B 1 7 H 9
8 1 9 9 2 11
Backward Pass
Late Start (LS)
Latest possible start of an activity
LS = LF – Activity Duration
Backward Pass
Calculates an activity’s late dates
Total Float
TF = LF – ES – Duration
Free Float
FF = ES of Sucessor activities – EF of the activity
5 C 7 7 F 10
7 2 9 9 3 12
0 A 5 5 D 8 8 G 12 12 J 13
0 5 5 5 3 8 8 4 12 12 1 13
5 E 7 9 I 10
7 2 9 11 1 12
0 B 1 7 H 9
8 1 9 9 2 11
Critical Path
0 A 5 5 D 8 8 G 12 12 J 13
0 5 5 5 3 8 8 4 12 12 1 13
5 E 7 9 I 10
7 2 9 11 1 12
0 B 1 7 H 9
8 1 9 9 2 11
Critical activity