Project Feasibility Study
A project feasibility study is a process that must be undertaken after the stakeholders conceive of the idea for a deliverable, but before any serious planning is started. This is basically the economics of the project and its deliverable on whether it will make the company money and for whom the deliverable will be sold to.
There are many different areas a project feasibility study must uncover, such as specific information so an informed decision on proceeding can be made by the stakeholders. The technology and systems that will be needed to take the deliverable from its initiation to a successful conclusion must be readily available. This is to say the production facilities of a company can handle or be modified to accommodate the needs necessary for the production of the deliverable.
After it has been determined that a company can produce the deliverable for a profit with little to no deviation for the company’s core business practices, the next step in a project feasibility study will involve the consumer. This is the part that requires extensive field work.
The field work part of a project feasibility study examines the target audience in depth. Part of this is the cost-based study that examines the exact costs of manufacturing the deliverable and what will be the benefit or profits that the deliverable provides the stakeholders and the company.
The cost that needed to be examined in the project feasibility study should include not only the manufacturing of the deliverable, but also the advertising of the product and the transportation costs of supplying the deliverable to the target audience. An example of this would be transporting the deliverable to Alaska. If the profit per unit was $10 and the transportation cost per unit was $9.50, it is not very economical to conduct the business deal. It the transportation cost was over $10 then it would be disastrous and the company would lose money on this business venture.
A project feasibility study is designed to take all the guess work out of who the deliverable will be sold to and how much it will cost to do so. It can also be called the economics of the project.