Feasibility Study In Project Management

Project identification is the first phase in the strategic development process. Project manager should be capable in recognizing the real standing and prospect of project success before investing important time and capitals on a project. Problem study is a critical approach for identifying projects.

One of the main elements of Project Identification Brief (PIB) is project introduction. In project introduction section, the project’s background has to pen down with details of project history and contextual that set the section and support required for the project. Other than project background, project’s goals and result will be listed along with success criteria such as project success measurement.

Project definition will be the next element

Operational feasibility study focused on whether the business needs can be fulfilled by recommended resolution. Measurement will be done on viability of the proposed solutions and takes gains of the prospects recognized at scope description. It also studies on the project plan whether it fulfills the criteria recognized in the criteria analysis stage. Anticipated operational result should ensure in guiding the design and development. These incorporate parameters, for example, unwavering quality, viability, supportability, convenience, disposability, manageability and reasonableness. The most critical area for success of a project depends on scheduling feasibility. Project which is not complete within dateline will be failed. Estimation of completion timing is important based on resources available and forecasting

As a result of the time value of the money, NPV considers the compounding of the discount rate over the span of the project. The NPV of a project mirrors how much cash inflow or outflow and it measures up to or surpasses the amount of project capital required to reserve it. An organization utilize NPV as a method for contrasting their relative profitability with assurance that exclusive the most lucrative endeavors are sought while evaluating numerous projects. A higher NPV shows that the project is more fruitful. The forecasted cash outflow and inflow for every period must be recognized and additionally the expected discount rate in order to compute NPV. In spite of the fact that the correct value can be identified after project completion but reasonable appraisals can be made by taking a gander at the execution of comparable projects. NPV formula as below where Ct is net cash inflow, Co is total investment, r is discount rate and t is no. of years. The NPV technique empowers companies to change in accordance with the difficulties of working with constrained financial resources. NPV can be utilized to rank fundamentally unrelated or competing investment to decide the ones that fall inside the planned furthest reaches of the business. For instance, a business element may have a practical project that falls beyond