Feasibility study is an in-depth scientific enquiry into the viability, practicality and sustainability of an intended project or product development. The aim is to determine how practicable, suitable and viable the project is.
1. Practicality of a project : Practicality looks at whether the technology exists to translate the product from an idea stage into tangible or physical stage. If the technology does not yet exist we would like to know whether it can be developed.
Practicality also involves the availability of raw materials and market.
Does the market exist for the product?
Does it have enough demand to involve the company in a higher expenditure?
Can the cost be recovered?
We also consider legal practicality. In this case, does the law permits such a project to be undertaken? Sometimes a project may not be legally practicable.
2. Sustainability of a project : sustainability refers to whether or not the project meets the needs or tempo of the nation or people. Is it a project that is desired at that time because it will help the nation to develop and enhance standard of living? The government sometimes may be pursuing a policy that seeks to deemphasize projects in a particular area. Any project that is contrary to public policy is not a suitable project.
A project maybe in consonance with public policy but may still not be suitable with regards to the location. For instance, sitting a beer factory in muslim territory is not suitable and therefore will be resisted.
A project must also satisfy the social cultural values of people for it to be suitable. For example, setting up a contraceptive factory in an area may not agree with the value of the people.
3.Viability of a project : if a project is suitable and practicable, we should still want to know whether it is viable. Viability relate to attainment of financial objectives. A project is viable to the extent that it is able to meet its financial objectives. If it does not lead to profit making, it is not viable. Viability of a project considers its profitability and return on investment.
