Week 7 - The Advantages of Conducting a Project Feasibility Study

Question 1

examines a number of variables and can reveal whether a new venture might be profitable and worthwhile now or in the future.

Answer 1

A project feasibility study

Question 2

Benefits of feasibility analysis include

Answer 2

an objective estimate of your likelihood of success and under what circumstances.

Question 3

Just because you can undertake and finish a project doesn’t mean you should pursue it. A profitable project might drain your resources in other areas or limit your ability to pursue another project that would provide a larger return on your investment.

Answer 3

Benefit Analysis

Question 4

show you the risk/reward benefit, opportunity costs and overall return, as explained by Project Manager.

Answer 4

Project feasibility studies

Question 5

A project that is easy to do in the spring might cause significant stress on your company if you try to do it in the winter. This all depends on your labor, production capacity, supply chain, cash flow and financing options. If a feasibility study doesn’t take into account the time of the year the project will occur, re-evaluate the study to determine if its projected results will change depending on when you undertake the project.

Answer 5

B. Optimal Timing Identification

Question 6

You might need to hold off on undertaking a project until you have enough cash on hand to fund the effort. You might have good sales in January, but if you offer creditors 90-day terms, you won’t be able to use the cash from those sales to start your project until April. Include cash flow considerations in any feasibility study to ensure you can adequately fund a project that, by all other indications, is a go.

Answer 6

C. Cash Flow Projections

Question 7

A project that seems like a no-brainer might put too much stress on one or more areas of your company, causing more damage than good to your overall business.

If your marketing staff is already working at full capacity, you will need to divert their time from other profitable efforts or accept a less-than-optimal effort on your new launch. Making and selling a product and service can also stress your production, billing, sales, warehousing and shipping functions.

Answer 7

D. Supply Chain Management

Question 8

A good feasibility study looks at the quality of your staff rather than just the quantity.

For example, an Internet company’s graphic artists might have plenty of time to help the business launch a print magazine, but these artists might not be trained to create a magazine grid, understand print typography or know how to create sections of a magazine such as departments, columns and feature wells.

A sales force that relies on high-volume cold calling using a sales-oriented approach might not be qualified to sell a new service that requires a consultative selling approach.

Answer 8

E. Labor Analysis

Question 9

The Advantages of Demand Forecasting

Answer 9

1. Increase Supply Chain Efficiency
2. Improve Labor Management
3. Insure Adequate Cash Flow
4. Create Accurate Budgeting

Question 10

Disadvantages of Demand Forecasting

Answer 10

One of the disadvantages of demand forecasting is that not every situation can be predicted.