Lecture 3 Flashcards
what should a feasibility study provide ?(general and detailed)
- it should provide all necessary data for an investment decision
- → the better the quality of the feasibility study the easier will be the appraisal work
- detailed:
- provide a formal document
- be gradually developed
- be properly detailed
what isn’t included in the feasibility study ?
commercial, technical, financial, economic and environmental prequisities for an investemnt are already critically examined on base of alternative solutions in a pre-feasibility study (to costly and tie consuming doing it again)
Typical content of a feasibility study (general, only headigs)
- project strategy
- sales Programm
- maerial inputs
- location, site and envirnoment
- technology, engineering &Layout
- plant organization
- human resources
- project implementation
- financial & economical analyse
Detailed: What is project strategy in feasibility study ?
- = scope and marketing concept → scope must be clearly understood in order to be able to prepare a reliable forecast on investment, production & marketing cost
- summary of project background (organizaional stuff like name adress project promoter, projec background, projec objective, project orientation in he market, industrial and economic policies…)
2 Kind of feasibility studies
- green field plant (compleately new)
- rehabilitation/expansion of existing plant
Detailed : What is included in the sales programm in the feasibility study
- summary of market analysis and marketing concept
- summarize results of marketing research
- list annual data on demand and supplies
- explain and justify the marketing strategies for archieving the project objectives, outline the marketing concept
- indicate projected marketing cost, elements of project sales programm and revenues
- describe impact on: raw materials, supplies, location, envirnoment, production programm…
Detailed:What is included in material inputs in feasibility studies?
- includes raw material & suppliers
- describes availability of : raw materials, processed industrial materials & components, factory suppliers, spare parts, suppliesfor social and external needs
- list annualsupply requirements of material inputs
- summarize availability of critical input and possible strategiess
Detailed: technology, engineering & Layout
what is included?
- →determination of plant capacity -design arrangement
- engineering and technology in gerneral
- main objectives archieved through plant
- determination of plant capacity
- management of bottleneckmachine
- technology choice and description, Project Layout
what is a bottleneck machine and how ?
= one (or more) “critical” machines in terms of technical requirements or cost
Detailed : Location, site and environment: what is included in this part ?
- identidycation and description of location and plant site selcted including:
- ecological and environmental impact
- socio-economic policies, incentives and constraints
- infrastructural conditions and envirnonments
- summarize critical aspects and justify choice of location and site
- outline signifiant cost relating to location and site
Detailed: technology, engineering & Layout general description
- outline production programm and plant capacity
- summarize main plant items like availability and costs (decribe and justify technology selected, reviewing availability, possible advantages and disadvantages, life cycle, transferor absorbtion of technology, training , risk control, costs, legal aspects)
- describe layout and scope of project
- required major civil engineering works
Detailed: technology, engineering, layout, Main objectivves of this chapter
- design functional& physical layout for plant+ necessary to produce defined products
- design plant size and all activities required to deliver both inputs and outputs and to provide the necessary ancillary infrastructure investments
- selection of of an appropriate technology, planning of the aquisitionand absorbtion of this technology and the corresponding know-how
- aquisiton of necessary skills, machinerie and equipment
2 kind of feasibility studies for plants
- feasible normal capacity
- nominal maximum capacity
what is feasible nomal capacity ?
- capacity is archievable under normal conditions
- feasible normal capacity is number of units produced durig one year under following conditions :(in accountance installed equipment, normal stoppages , down time, holidays, tool changes…)
- this capacity should correnspond to sales derived from the outline of the marketing concept
what is nominal maximum capacity
nominal capacity= technically feasible capacity which frequently correspond to installed capacity guranteed by supplier of the plant
nominal maximum capacity is archievable but would entail overtime, exessive consumption of factory supplies, utilities→ disproportinal increase production cost increase
