E-Commerce Project
Fifth Lecture
Mohammed Antour
t_mantour@svuonline.org
Lecture outline

The feasibility study

The component of the feasibility study

The break-even analysis

Suggested links
The feasibility study
It is a study for the use of any business idea, with an emphasis on the
expected problems. Here we answer on one main question, is our
proposed idea is effective and worth to go forward with it.
Before starting with it we have to specify when, where, and to whom the
products or services is for. We must also identify our competitors and
how much the investment amount to start the project, with the detailed
working mechanism to guarantee the success of the project.
The importance of this study is from

Identify the needed tasks to do the work

Identify the needed logistic
tasks to do with the obstacles and its
suggested solutions

Identify ways to develop the market to convince stake holders to invest

Set working foundation for future development
The component of the feasibility study

Describe the business where we describe the product and how
it will be delivered to customers

Economic feasibility study for the market where we describe
the
current
and
possible
markets
with
competitors
and
customers

Technical feasibility study where we describe the working steps
on the product starting with the row material, workers,
transportation, and the working place

The financial study and the amount of the starting finance
amount with its source and ROI …

Organizational study with the legal and organizational frame

The conclusion with the success factors to the project
The break-even analysis
It is a technique vastly used by production and finance administrations. It is
depending on how we allocate the costs to fixed (not related to the
amount of production) and variable costs (related to the amount of
production), then compare expansion amount with the sells income to
identify the amount of sells and production where the business reached a
point of equilibrium with no lost or profit.
Types of costs

Fixed costs which is not related directly to the amount of production
rent, administration costs…

Variable costs which is related to the amount of production


Direct costs which is directly related to the amount of production like row material
non-direct costs which is not related directly with the production amount like production
tools maintenance

The semi-variable product which is related with the production but not
directly like renting additional where house for storing
Break-even analysis
Here we have the line OA the
alteration of the income
during the production
phases, while OB shows the
fixed costs. With the
production increase the
variable expenses
increases. When the
production amount isn’t big
then the expenses are
bigger than the income.
The point P is where the
amount of expenses are
equal to the income and
there is no profit or loss.
Suggested Links

http://connection.cwru.edu/mbac424/breakeven/BreakEven.ht
ml

http://en.wikipedia.org/wiki/Break_even_analysis

http://tutor2u.net/business/production/break_even.htm

http://en.wikipedia.org/wiki/Feasibility_study

http://www.extension.iastate.edu/agdm/wholefarm/html/c
5-65.html

http://womeninbusiness.about.com/od/businessplans/a/fea
sibilitystud.htm
Thanks For Listening
Questions