Chapter (4)
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TECHNICAL FEASIBILITY STUDY
Lecturer.Ahmed El Rawas
chapter content
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What is technical study?
Transformation process
Classification of products
materials and utilities
Costs of raw materials and supplies
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Lecturer.Ahmed El Rawas
(1)What is a Technical Feasibility Study?
 The Technical Feasibility Study assesses the details
of how you will deliver a product or service (i.e.,
materials, labor, transportation, where your business
will be located, technology needed, etc.). Think of the
technical feasibility study as the logistical or tactical
plan of how your business will produce, store,
deliver, and track its products or services.
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Lecturer.Ahmed El Rawas
Technical study includes
1-Technology and operational
 This involves questions such as whether the
technology needed for the system exists, how
difficult it will be to build, and whether the firm has
enough experience using that technology. The
assessment is based on an outline design of system
requirements in terms of Input, Processes, Output,
Fields, Programs, and Procedures. This can be
quantified in terms of volumes of data, trends,
frequency of updating, etc in order to estimate if the
new system will perform adequately or not.
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Lecturer.Ahmed El Rawas
Technical study
2- location analysis.
 Location analysis typically involves testing
geographic locations for a real estate development
project, and usually involves real estate land. Market
Feasibility take into account the importance of the
business in the selected area.
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Lecturer.Ahmed El Rawas
Technical study includes
3-Resource availability
 This involves questions such as how much time is
available to build the new system, when it can be
built, whether it interferes with normal business
operations, type and amount of resources required,
dependencies, etc.
4-Culture
 In this stage, the project's alternatives are evaluated
for their impact on the local and general. an
enterprise's own culture can clash with the results of
the project.
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Lecturer.Ahmed El Rawas
Supply & Demand
Operations &
Supply Chains
Supply
Supply
Supply
Sales & Marketing
>
Demand
Wasteful
Costly
<
Demand
Opportunity Loss
Customer
Dissatisfaction
=
Demand
Ideal
Basic Functions of the Business Organization
Organization
Marketing
Operations
Finance
The Transformation Process
Value-Added
Inputs
•Land
•Labor
•Capital
•Information
Transformation/
Conversion
Process
Outputs
•Goods
•Services
Feedback
Feedback
Control
Feedback
Feedback = measurements taken at various points in the transformation process
Control = The comparison of feedback against previously established
standards to determine if corrective action is needed.
Classification of products
Agricultural products
Livestock and forest products
Marine products
Mineral products
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Lecturer.Ahmed El Rawas
materials and utilities
Electricity
Fuel
Water
Packaging materials
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Lecturer.Ahmed El Rawas
Spare parts
all machinery and equipment will finally
break down after a certain lifetime. Various spare parts
will be required to keep a plant in operation.
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Lecturer.Ahmed El Rawas
Availability and supply
A feasibility study must show how the materials and
inputs required will be provided. General
availability, data about materials, potential users and
supply sources and programs will have to be
analyzed and described.
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Lecturer.Ahmed El Rawas
(5)Costs of raw materials and
supplies
Unit costs (the unit cost of basic materials)
Overhead costs of supplies
Total cost = ( Q*V + f )
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Lecturer.Ahmed El Rawas
Tech study main points ( project)
 Material inputs
 Spare parts
 Cost of raw materials ( unit cost, annual cost,
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overhead cost)
Finished product ( output )
Sources of supplies.
Detailed assessment of the utilities required
( electricity, water, fuel )
Packaging materials.
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Lecturer.Ahmed El Rawas
Technical study main points ( project)
 Location analysis (location choice )
 Accessibility.
 Infrastructural conditions ( transport,
communications )
 Ecological conditions ( soil, site hazards, climate )
 Cost of land, construction requirement
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Lecturer.Ahmed El Rawas