PROJECT

STUDY

Submitted to:
Sir Victorio M. Bongabong

Submitted by:
Bacolcol, Adriane Joshua D.
Cornelia, Berna Hedie A.
Dela Cruz, Ron Edward
Hablo, Elmer Bryan C.
Hernandez, Jean Dian R.
Feasibility Study
Feasibility Study
A feasibility study is an analysis of how successfully a project can be completed,
accounting for factors that affect it such as economic, technological, legal and scheduling factors.
Project managers use feasibility studies to determine the positive and negative outcomes of a
project before investing time and money into it. This study tests the viability of an idea, a project
or even a new business. The goal of a feasibility study is to place emphasis on potential problems
that could occur if a project is pursued and determine if, after all significant factors are
considered, the project should be pursued. Feasibility studies also allow a business to address
where and how it will operate, potential obstacles, competition and the funding needed to get the
business up and running.

Objective

A well-designed feasibility study should provide a historical background of the business

or project, a description of the product or service, accounting statements, details of
the operations and management, marketing research and policies, financial data, legal
requirements and tax obligations. Generally, feasibility studies precede technical development
and project implementation. It aims to objectively and rationally uncover the strengths and
weaknesses of an existing business or proposed venture, opportunities and threats present in
the environment, the resources required to carry through, and ultimately the prospects for
success. In its simplest terms, the two criteria to judge feasibility are cost required and value to
be attained.

Importance

Feasibility studies allow companies to determine and organize all of the necessary details
to make a business work. A feasibility study helps identify logistical problems, and nearly all
business-related problems, along with the solutions to alleviate them. Feasibility studies can also
lead to the development of marketing strategies that convince investors or a bank that investing
in the business is a wise choice. It evaluates the project's potential for success; therefore,
perceived objectivity is an important factor in the credibility of the study for potential investors
and lending institutions. It must therefore be conducted with an objective, unbiased approach to
provide information upon which decisions can be based.

Below are other reasons to conduct a feasibility study.

 Gives focus to the project and outline alternatives.

 Narrows business alternatives
 Identifies new opportunities through the investigative process.
 Identifies reasons not to proceed.
 Enhances the probability of success by addressing and mitigating factors early on
that could affect the project.
  Provides quality information for decision making.
 Provides documentation that the business venture was thoroughly investigated.
 Helps in securing funding from lending institutions and other monetary sources.
 Helps to attract equity investment.

Components of a Feasibility Study

1. Description
– a layout of the business, the products and/or services to be offered and how they
will be delivered.
2. Market feasibility
– describes the industry, the current and future market potential, competition,
sales estimations and prospective buyers.
3. Technical feasibility
– lays out details on how a good or service will be delivered, which includes
transportation, business location, technology needed, materials and labor.
4. Financial feasibility
– a projection of the amount of funding or startup capital needed, what sources of
capital can and will be used, and what kind of return can be expected on the investment.
5. Organizational feasibility
– a definition of the corporate and legal structure of the business; this may include
information about the founders, their professional background and the skills they possess
necessary to get the company off the ground and keep it operational.

There are Common Factors to consider in Feasibility Study

The acronym TELOS refers to the five areas of feasibility:
These are Technical, Economic, Legal, Operational and Scheduling.
Technical feasibility
This assessment is based on an outline design of system requirements, to determine whether
the company has the technical expertise to handle completion of the project. When writing a
feasibility report, the following should be taken to consideration:

 A brief description of the business to assess more possible factors which could affect the
study
 The part of the business being examined
 The human and economic factor
 The possible solutions to the problem
It focuses on gaining an understanding of the present technical resources of the organization
and their applicability to the expected needs of the proposed system. It is an evaluation of the
hardware and software and how it meets the need of the proposed system.
Economic feasibility
The purpose of the economic feasibility assessment is to determine the positive economic
benefits to the organization that the proposed system will provide. It includes quantification and
identification.
Legal feasibility
It determines whether the proposed system conflicts with legal requirements, e.g. a data
processing system must comply with the local data protection regulations and if the proposed
venture is acceptable in accordance to the laws of the land.
Operational feasibility
It is the measure of how well a proposed system solves the problems, and takes advantage
of the opportunities identified during scope definition and how it satisfies the requirements
identified in the requirements analysis phase of system development. It focuses on the degree to
which the proposed development projects fits in with the existing business environment and
objectives with regard to development schedule, delivery date, corporate culture and existing
business processes.
To ensure success, desired operational outcomes must be imparted during design and
development. These include such design-dependent parameters as reliability, maintainability,
supportability, usability, product ability, disposability, sustainability, affordability and others.
These parameters are required to be considered at the early stages of design if desired operational
behaviors are to be realized. A system design and development requires appropriate and timely
application of engineering and management efforts to meet the previously mentioned parameters.
A system may serve its intended purpose most effectively when its technical and operating
characteristics are engineered into the design. Therefore, operational feasibility is a critical
aspect of systems engineering that needs to be an integral part of the early design phases.
Schedule feasibility
A project will fail if it takes too long to be completed before it is useful. Typically this
means estimating how long the system will take to develop, and if it can be completed in a given
time period using some methods like payback period. Schedule feasibility is a measure of how
reasonable the project timetable is. Given our technical expertise, are the project deadlines
reasonable? Some projects are initiated with specific deadlines. It is necessary to determine
whether the deadlines are mandatory or desirable.
Results and Conclusions
The conclusions of the feasibility study should outline in depth the various scenarios
examined and the implications, strengths and weaknesses of each. The project leaders need to
study the feasibility study and challenge its underlying assumptions. This is the time to be
skeptical.

Don’t expect one alternative to “jump off the page” as being the best scenario. Feasibility
studies do not suddenly become positive or negative. As you accumulate information and
investigate alternatives, neither a positive nor negative outcome may emerge. The decision of
whether to proceed is often not clear cut. Major stumbling blocks may emerge that negate the
project. Sometimes these weaknesses can be overcome. Rarely does the analysis come out
overwhelmingly positive. The study will help you assess the tradeoff between the risks and
rewards of moving forward with the business project.

Other Feasibility Factors

Market and real estate feasibility
Market feasibility studies typically involve testing geographic locations for a real estate
development project, and usually involve parcels of real estate land. Developers often conduct
market studies to determine the best location within a jurisdiction, and to test alternative land
uses for given parcels. Jurisdictions often require developers to complete feasibility studies
before they will approve a permit application for retail, commercial, industrial, manufacturing,
housing, office or mixed-use project. Market Feasibility takes into account the importance of the
business in the selected area.
Resource feasibility
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, and developmental procedures with company revenue
prospectus.
Financial feasibility
In case of a new project, financial viability can be judged on the following parameters:

 Total estimated cost of the project

 Financing of the project in terms of its capital structure, debt to equity ratio and
promoter's share of total cost
 Existing investment by the promoter in any other business
 Projected cash flow and profitability
The financial viability of a project should provide the following information:

 Full details of the assets to be financed.

 Rate of conversion to cash-liquidity (i.e. how easily can the various assets be converted to
cash?).
 Project's funding potential and repayment terms.
 Sensitivity in the repayments capability to the following factors:
o Time delays.
o Mild slowing of sales.
o Acute reduction/slowing of sales.
o Small increase in cost.
o Large increase in cost.
o Adverse economic conditions.
Feasibility in Vessel Design
The first phase of concept development is feasibility study where the purpose is to develop the
first vessel design(s) for the ship owner in order to be able to check the required investment and
the feasibility of the intended service. The starting point for the feasibility project is the
customer’s business plan or basic description of the vessel or the service. Basic statistics of built
vessels are applied. Comparisons to existing designs are essential to achieve a good result.
At the end of the feasibility phase, the customer is in a position to discuss further with other
parties involved, and to decide whether to go ahead with the concept.

Outline Project
The purpose of an outline project is to develop the available vessel concept to a level where the
inquiry material can be sent to shipyards for tendering purposes. The main focus in this phase is
to create reliable design material describing the design to a sufficiently detailed level for the
shipyard’s pricing purposes. An interactive 3D model can also be developed for the customer’s
own use.

With a prototype vessel, it is essential that the project is well defined before approaching yards.
All yards can then start with the same basis, the owner receives comparable proposals and gets
the desired design at an affordable price. Not all yards have the capacity or the experience to
produce the necessary design by themselves. In China, for example, an owner’s outline project is
practically always required to receive a proposal from the yard.
At this stage, the preliminarily selected classification society, which also works as a
representative of the national authority, should be called in. This is especially the case when
there are new rules to be applied. Major suppliers should also be approached to receive both
commercial and technical proposals. At the end of the outline project, the owner can send yards
invitations to tender.

Project Development
The purpose of the project development phase is to utilise the time period between the tender
request and contract negotiations. The vessel concept will be developed to a more defined level,
thus minimizing the technical and commercial risks of the project. The main focus in this phase
is to further refine and verify the developed design principles with more detailed calculations and
design. Typically the general arrangement (GA) drawing, structural analysis and hull
form/stability are further developed. Preliminary model tests can also be carried out to ensure the
performance of the project.

Optimisations are applied as much as possible in the development of the above features. If opted
for, the general arrangement (GA) with the aid of a 3D product model will act as a coordination
model for all design activities. The model will be developed to a level where most of the separate
spaces are identified and defined. The design will be updated until it can be seen that the design
criteria and targets have been reached. Specific studies are conducted when needed, and the
outline project documentation is finalised.
Contract Project
The purpose of the contract project phase is to provide technical assistance and consultation
during the evaluation of different yard proposals, to further develop the design material, to
participate in technical and commercial contract negotiations and to assist the owner in finalising
the contractual technical specification. The main aim of this phase is to reach a confirmed
technical specification and supporting documents.

The work starts with the review of the proposals received from the bidding yards. The customer
should decide which of the proposals seem interesting and should be included in the first round
of the evaluation process. The first evaluation round will be performed at most for 10 yard
proposals and will concentrate on finding deviations in the tender material (i.e. the outline
specification developed in an earlier project phase). The deviations of each proposal will be
listed and their impacts assessed, and a summary of all proposals will be prepared.
After this, a short listing of the most interesting proposals should be carried out and feedback
given to the shortlisted yards. The yards should be given time to develop and update their
proposals before arranging a technical clarification meeting where the customer, yard and
discuss all different aspects of the yard proposal and especially the items deviating from the
outline specification. After this, the yard will continue developing its own material will perform
a more detailed assessment of the technical specification.

After this round, a preliminary selection of the building yard should be made, and discussions
with this yard continued. Then continue updating and preparing proposals for final contractual
material based on the final technical negotiations. Once the final technical details are agreed, will
prepare the final contractual documentation that can be confirmed and signed, and will then work
as the final technical specification and supporting documents to the shipbuilding contract. In
China, for instance, an owner’s contract project is practically always required as not all yards
have the ability to develop it.
As a result of this phase, the shipbuilding contract is signed.

Basic Design
The purpose of the basic design is to develop the project in order to achieve approvals from the
classification society, national authority and other related authorities as well as to define the
project to meet the owner’s requirements. This means that an efficient basic design class and flag
should be decided upon. At the same time, the project will be technically defined to allow the
procurement of the main equipment. The basic design process cannot proceed without the
selection of manufacturers for the main systems, as makers’ data is required for the design to
proceed.

Basic design is typically ordered/carried out by the yard, but can be carried out on behalf of the
owner as well, even before signing the shipbuilding contract. This, however, means that the
owner may have to make the classification agreement as well as select the main makers, subject
to the shipbuilding contract.
Basic and detail design schedules often overlap. The basic design is finished once all approvals
have been received. Typically carry out 4-6 basic design projects a year, including technical
procurement handling.

Model Testing
Hull form optimisation and model testing is normally carried out in two steps:
First step with computer calculations, CFD and simulations, pre-optimisation of the hull form
before model testing

Model testing and use of relevant references in finalising the hull form design
We carry out 10-15 model test series a year at different European model basins. The successful
execution requires experience and knowledge in developing the hull form, and the model tests
should be carried out until all parties agree that the design has been improved as far as possible.
We have very good experience in managing this process to a successful end result.

Detail Design
To ensure a uniform basis for detail engineering and interface agreement between the yard,
owner, and different suppliers and as designer, preordination design is carried out. This
coordination phase is important as the last check concerning system redundancy and availability.
This phase may also be called integration design.

Space reservations will be checked and necessary definitions for the location of various main
items will be accomplished. The ship-wide routing of piping, ducting and cabling will be made
to prevent any discontinuity in design at areas of interface.
The basic design diagrams for piping, the main cable trays and ventilation ducts will be brought
on top of the space arrangements and layouts, taking into consideration the structural
arrangement as well.

Detail design and engineering are carried out in accordance with the selected building method.
Normally hull, machinery and piping are taken care of by the yard, and the rest by the area and
system suppliers. However, this depends on the selected shipyard. Detail/production design is
typically carried out by the yard alone and/or together with the designers. In China, the practice
is different as, in detail design, only the final vendor data is implemented and the production
design is carried out by the yards with their own 3D programmes.
Basic and detail design schedules often overlap. The detail design ends in production start-up.

Construction and Commissioning

During the construction, supervise the project as well as work in close cooperation with the yard
to ensure successful project execution.

New building supervision is typically subdivided into three phases:

 Yard and supplier meetings
 Document control/approval/special studies
  Supervision

Depending on the owner’s involvement, we are in a position to take responsibility of all three
phases if needed.
Document approval is handled mainly through our main office, where we have required
specialists available concerning, for example, safety, noise and vibration, structural finite
element method (FEM) analysis, naval architectural calculations, weight, etc.

Yard meetings are handled by the supervisors and/or by required specialists. Supervisors are
mainly our own experienced people. Local capacity can be used when necessary. We have
partners in different countries and locations, which enables us to respond locally, sometimes very
quickly.

Training should be started as early as the model testing phase concerning, for example,
maneuverability, crabbing and harbor approach, and continued with system simulations, etc.
while the basic design proceeds.
System redundancy and availability should be simulated during the design phase and not be left
for the commissioning phase only.