Last Updated 20 Jun 2022

Feasibility Study For Bookstore

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Table of contents

a. Marketing philosophy with target awareness
b. Market Analysis

1. Target Market

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The main target markets of Bookworm Company are the student of every school here in Aklan. That every books that they looking for are in the Bookworm. The bookworm provides the most effective needs of student while they seeking their books.

a. Demographics

We can divide our target market according to age, occupation, civil status, nationality, and gender.

b. Psychographics

The Bookworm focuses on interests of customer, their activities, and also the opinions of every customer so that were going to conduct a marketing survey for our target market. It focuses the attitudes, personality formation, and cultural touchstones.

c. Niche Markets

The bookworm company determine the target audience and find what the customer wants. The bookworm sells retail book items for the consumer.

2. Competition
3. Market Trends

a. Product Life cycle

We introduce our company by launch our product. We make advertising to radio and television so that the customer can know that there is an opening of book store here in Kalibo, Aklan. The bookworm company make a promotion to make consumers aware that the product is now available on the market and what its purposes. Market Growth Demand begins to accelerate and the size of the total market expands rapidly. Maturity demand is the level of Bookworm when the customer are not satisfied and they replacement and new family formation rate and finally the product goes into decline as sales fall.

b. Type of consumer goods

Market Strategy
-Method of Sales & Distribution
- Packaging
When it comes in packaging the Bookworm Company use papers bags

because as of now using plastic materials is not good to our environment. Using paper bags as a material is very environmental friendly and we can reuse it. We attached our company logo and tag line into paper bags so that the costumer will know and to advertise also our products. -Pricing

- Branding
-Database marketing
- Sales Strategy
- Sales Incentive or Promotion

The Bookworm use a strategy like Sales promotion, advertising, and salesmanship because this three are the major techniques used in merchandising products to the public. In Salesmanship the company need to know the customer face-to-face so that the seller convinces the customer that the books on sale are essential to their satisfaction. The bookworms use the sales promotion strategy to persuade the consumer and customer to purchase immediately by providing special incentives such as discount items, promo sale and freebies.

- Advertising Strategy
- Public Relation
- Networking

Cookies Filled with Ice Cream Feasibility Study

Food is very essential for us. It is our need in order for us to live. There are many kinds of food that best suit on our taste buds. One of it is cookies. Cookies is the type of food that most of all like to eat because of its taste. Cookies is the kind of food that kids are attracted to eat. What with cookies that many, like to eat? We as student researchers delved into topic to find out what are the advantages of cookies that is filled with ice cream specifically in Bacolod City. Our study focused on advantages of cookies filled with ice cream.

We choose Bacolod City people as our participants because related indication shows that many business creations are in the place that most people are present. We will present this research paper in order for us to know the taste and effect of cookies that is filled with ice cream in the consumption of people, reasons for eating, effects and the overall impact of eating cookies filled with ice cream in their daily lives. Our findings will be beneficial in both school and establishments’ in better understanding the advantages of cookies filled with ice cream.

And we also offers different flavors of ice cream such as vanilla, mango, chocolate, and ube. Selecta is our choice from where we should get our ice cream to pair with the cookies. Significance of the Study: We conducted this research to find out the consumers’ reaction in the cookies filled with ice cream and the impact of it to different status quo. This will benefit various businesses and establishments on finding out the trend of consumers to better improve and innovate their products with an increase in profit.

Our study can also help establishments that sell cookies to improve their relationship with their customers by satisfying them with irresistible taste and worthy service. Scope and Limitation: 1. Area of locality- Our study will focus on areas in the vicinity of Bacolod city 2. Subject or population- subjects will consist of people within Bacolod City. 3. Duration or Period- the study will be conducted in the months of August to October 2013. Logo: Chapter 2 Management Aspect Study Objectives: The primary reason for this study is to know weather the cookies filled with ice cream will hit the market.

This is also to make a twist between eating a cookies with ice cream. This is also a solution for the hot weather here in the Philippines. Form of Business Organization: This busines is a PARTNERSHIP BUSINESS, consist of 6 partners. These 6 person will help each other to make their customers happy. Rules and Regulations: a. To be truthful and honest in all his/her endeavors particularly in his/her dealings. with a customer and to the business partners. b. To strictly observe all the rules and regulations enforced by the partners and not to violate them. c.

To refrain from directly or indirectly misleading customers or verbally or nonverbally misrepresenting the company. d. To properly behave at all times and not to commit any act which may put his/her dignity and the business reputation. Duties and Responsibilities: a. All the 6 membersof this business is not only the owners of the business. They must also act as an employee and serve the guest well. b. All employess should maintain cleanliness within the area for food sanitation and safety. c. Owners and employees should treat each other regardless of what position the other one has to maintain peace and harmony in the company.

Chapter 3 Product Description: Our signature cookies filled with ice cream is specially made for those who wants to eat cookies and ice cream at the same time. All of our products include a complimentary note card with your personal message whether it's for your parents, friend or even your partner in life. Production Process: First, all the ingredients are fed into a large batch tank. Instead of eggs and milk, dry egg powder and dry milk are most likely used. After everything is well-mixed, the dough is transferred to a machine with two feed rollers.

The feed rollers turn to pull the dough into the machine and push it out through several openings of the proper shape/size (in this case likely a 2 inch diameter circle). As the product is going through the opening, a wire comes across and slices the cookie pieces off so that they land on a tray. The trays are then transferred to a large oven and baked in batches. Alternatively, the cookie pieces might transfer onto metal trays and travel through an oven continuously. After a cooling stage, the cookies are ready to serve with ice cream.

Feasibility Study Proposal Example

Business Proposal for Al Bustan Retail Facility (ARF) Prepared By: Dr. Munir Hourani Introduction Al Bustan Retail Facility (ARF) Business Proposal will define broad city-wide goals for sustainable development into focused, actionable, area-specific strategies to ensure the vitality of the central area of Abu Dhabi city and enable us to achieve our community vision Abu Dhabi 2030. The planning process will place an emphasis on ways to promote and improve mixed uses and quality future concept of a retail facility, service-oriented and affordable, transportation and parking management, and the quality and capacity of public infrastructure.

Our intent is to identify, understand, and address current strengths and barriers to the creation of new futuristic retail facility development. At the same time we need to make the hard decisions necessary to facilitate the continued evolution and maturation of this vital and dynamic mixed use (ARF) facility. We will hire specialized retail consultant to help produce and accomplish this study and put it in force. Feasibility Study Methodology Our Study will serve the objectives by addressing the future retail marketing concepts through utilizing and studying of the following trends: 1.

Successful in international retail trends and retailing trends to attract the ‘new consumer'. 2. Creating new store (Future Stores) designs and concepts to engage consumers and drive profits. 3. Utilizing the latest in-store technology platforms to effectively create, manage and measure the in-store shopper experience. 4. Harnessing the power of innovative multichannel solutions to engage with new customers and increase the shopper experience 5. Maximizing the potential of social media to engage with the new consumer 6.

Future Branding: Connecting your brand with today's consumer 7. Engaging with the regional consumer: Successfully introducing customer loyalty schemes to increase repeat custom, brand visibility and profitability 8. Capitalizing on the soaring growth of the grocery and FMCG market in the Middle East. Retail Feasibility Analysis A retail market analysis will help to determine strengths, gaps and opportunities for retail development and retention of ARF. Bearing in mind the following feasibility understanding: Abu Dhabi downtown is home to one of the most dynamic small downtowns in the UAE. ARF is one of the centerpiece of the community from a retail, dining, and entertainment perspective and widely regarded as one of the most successful mixed-use area. The ARF vicinity provides a variety of office, residential, cultural, retail, and institutional uses and is the undisputed center of new Abu Dhabi. * Over the past several years, the retail climate in Abu Dhabi has evolved. Major retail developments, traditional retail competitors and malls have added worthy competitors to downtown Abu Dhabi. Retail business has benefitted from the climate dominating Abu Dhabi island ( humid and hot ) most of the years round, to create the culture of shopping and entertaining in indoor areas. * Downtown Abu Dhabi is now at a crossroads of development. The community has enjoyed marked success since the boom of 1990s and does not wish to rest on those accomplishments. The recent recession has “complicated” the market forces at work in the country, resulting in store closures, reduced profits, and traditional retail churn.

In Abu Dhabi all of this is happening at the same time that retail and dining destinations have expanded out of the traditional retail business. * As you know Abu Dhabi now is on the cusp of a new downtown master plan process that will provide detailed analysis of downtown and provide the chance to share this planned community expansion. Scope of Work We will be working on the following subjects or tasks to fulfill the Objectives of the study. The Scope of work will be limited to the following: 1. Review and understanding of prior Abu Dhabi retail market. 2.

Overview of local and ARF vicinity retail capacity including: * Market definition * Market segmentation and demographic analysis 3. Analyze the existing retail mix and growth for the ARF, and the assessment of visitor versus local traffic. 4. Identify potential retail voids in the ARF area. 5. Recommendations to capture retail market opportunities, and reinforce customer base. 6. Marketing recommendations: to develop a series of new retail brand allocation (Franchises), marketing, business retention, and recruitment recommendations for ARF. Specific Deliverables: 1. Review of prior Abu Dhabi retail market Report. . Local and ARF vicinity retail capacity Report. 3. The assessment of visitor versus local traffic Report. 4. Identify potential retail voids in the ARF area Report. 5. Marketing Recommendations and new retail brand Recommendation Report. 6. Al Bustan Retail Facility (ARF) Feasibility Study Final Report; detailing the results of the tasks mentioned above, also including an Executive Summary of major findings. 7. An annotated presentation for sharing findings easily with stakeholders. Project Phases Phase 1: Review of prior Abu Dhabi retail market task, and Local and ARF vicinity retail capacity task.

This phase will end with delivery of the mentioned tasks Reports. Phase 2: The assessment of visitor versus local traffic task. Identify potential retail voids in the ARF area task, nd Marketing Recommendations task. This phase will end with delivery of the mentioned tasks Reports. Phase 3: Feasibility Study Final Report; detailing the results of the tasks mentioned above, also including an Executive Summary of major findings. Project Duration This study will need 90 days for the purpose of executing all Business Proposal objectives.

Feasibility Study

What to Include in your Feasibility

In starting a new business venture, it is important to conduct a feasibility study to ensure that your business will be successful. Some things to be included are plan, cost, and sources of funding, manpower and personnel requirements, market and profitability. In the plan section of your feasibility study, State clearly the objectives and description of the project. Duration to complete the project is also included. It is usually answers the questions what, why and how about the project.

Indicate the cost of equipment and facilities needed for the project. The proponents should undertake reliable canvassing using at least two or three supplier and be particulars to models and capacities of equipment as well as the availability of materials. Also, it is important if there is budget for the project. If there is no sufficient budget for the project, a bank loan may be considered. In this case, the loan amount and its interest must be factored into the financial documents of the study. Realistic income targets from the venture should be projected.

As per personnel or manpower, it is important to determine the size and particulars of manpower as well as personnel’s job description, job titles and credential standards. Also, salary rates and allowance should be noted. In addition, the stability of the market determines the viability of the project. A survey should be conducted to know if there are sufficient clients or customers and to whom the commercial venture will cater. Of course, project should know if it is profitable. A ten or twenty percent return of investment (ROI) is usually regarded as profitable enough.

Vital Parts of Feasibility Study

Summary of Project

  • Name of Firm
  • Location – head office and plant site
  • Brief description of the product
  • Highlights of major assumptions such as market projections, share and prices, investment costs, method of funding

Summary of findings and conclusions on the following:

  1. Market feasibility
  2. Technical feasibility
  3. Financial feasibility

General Information

Describe the pre-operating period, during the operating period, labor, and professional firms or consultants to be hired, if any. Also, includes status of timetable of the project and other information such as pending litigations, information regarding intangibles, etc.

Competitive position considering imported and/or substitute products.

  • Marketing Program – description of the present marketing practices of competitors in the exports and domestic market. Projected export and proposed marketing program of the project. It includes the contribution to the economy, plant layout, structure, raw materials, utilities, and waste disposal.
  • Financial Feasibility – Total project cost, initial capital requirements, sources of financing, financial statements, and financial analysis.
  • Social Desirability – specific project contributions to the economy and society and social rate return.

Some Feasibility Study Mistakes

It is imperative to show your idea is feasible to attract investor and fund the project. No matter what is your offering whether a product or service, you need to convince other people to finance your ideas. I provide some feasibility mistakes which serve as guidelines to your feasibility study. Doing feasibility study without doing research. It is a wasting of time and money without preliminary research on validity of the idea. It is necessary to conduct initial research or pre-feasibility study before the start on of a full feasibility study.

  • Incorrect data interpretation. Sometimes, the writer overestimates the market size as well as the opportunity for the new venture. For example, you will observe that the product has a large market place, but not realized the strengths of competitors and their customer’s loyalty.
  • Incorrect cost estimation.
  • Make sure to detailed the cost to avoid over-estimation or under estimation. Also, cost estimates should be studied carefully.
  • Overlook indirect competitors. Make sure to investigate all products and services that deal to customers’ need.
  • Surveys dependence. Don’t over rely to survey because people tend to answer “yes” for new product but when it comes to purchasing, they say “no”.
  • Without expert Assistance. It is important to get expert views regarding the product, idea or services. What to include in your Technical Feasibility Product
  • Description of product
  • Economic uses of the product
  • Manufacturing Process
  • Detailed Flow Chart of the Manufacturing

Process including the material and energy requirement at each step and normal duration of the process

  • Other processes and factors considered to determine the process to be adopted
  • Processes used in existing plants and in similar projects Plant Size and Production Schedule
  • Daily and annual production capacity of the plant
  • Days per year the project operate
  • Factors used in determining plant size
  • Expected attainable annual production volume for the next five years considering start-up and technical factors.
  • Machinery
  • Machinery layout such as the number of specifications, rated capacities of major machineries, prices of equipment, and balancing of capacities of each major and auxiliary equipment and standby units
  • Spare parts and repair service available
  • Quotations from suppliers, machinery guarantees, delivery, terms of payments and other arrangements Plant Location and Layout
  • Location map of the plant
  • Plant Layout Suggested Outline for Feasibility Study
  • One of the important steps in business development is a feasibility study.
  • Feasibility study is used to determine the potential for success of a proposed business venture.

The sample outline below can be used to help you make your study. However, not all feasibility studies are alike because it depends to the type of business venture analyzed and the market.

The success of a feasibility study is based on the careful identification and evaluation of all of the important aspects for business success.

Identify the list of product(s) or services(s) to be marketed and the general business model such as how the business will make money.

Include the technical processes, size, location and kind of inputs. Also know the economic and social impact on local communities as well as environmental impact on the surrounding area.

  • Market Feasibility. Determine the industry description, industry competitiveness, market potential, sale projection and the access to market outlets.
  • Technical Feasibility. Find out the facility needs, suitability of production technology, availability and suitability of site, raw materials and others such as labor availability and qualified management personnel.
  • Financial Feasibility. Include the estimation of total capital requirements, equity and credit needs, budget expected costs and returns of various alternatives Management Feasibility. Identify the business structure and business founders.

Conclusion

Include information that will be used for decision making whether to proceed the proposed business ventures.

Rules in Preparing a Good Project Feasibility

Study A project study or feasibility study contains several chapters. The proposed project must be financially, economically, technically and socially feasible. A consultant or researcher must possess not only the technical expertise on the project involved, but also the right analytical, interpretative and writing skills to be able to produce the desired studies. He must know all banking, institutional, and governmental rules and regulations on the particular projects he is to work on.

Study

Know the nature of the proposed project well. If you are not familiar with the topic or project, you must obtain the technical expertise from qualified experts to help you in researching the basic required technology and other sensitive aspects of the project.

  1. Research well. Explore all resource related to your study. Your project study must be included with statistics, data documents, and all information needed from all available resources.
  2. Must be a good analyst. You must know how to analyze, evaluate, interpret, use and discard unnecessary data.
  3. Data must be accurate. Your estimates and projections must be close to realities. Avoid making guesses and statistical improbabilities.
  4. Organize study. You must know how to put in order your study.
  5. Write it well. You must know how to write it properly.

Sample of Management Study

Excerpt from the proposed telephone industry business. Management study includes the planning, organizing, staffing and directing of the project. Also it includes the external activities in starting the business. The means and procedure are undertaken before the operation of the business. The form of management is indicated identifying each of management and each personnel. The role and duties of each personnel is clearly defined, as well as practice and develop skills learned from this project Management Analysis Our business covers a system of services that can be determined in large scales. A corporation owns the ETHECOM. This kind of business has a very large management. The management and operation of the business are determined and constructed by the joint-forces and capabilities of the corporate members and staffs. Organization Chart ETHELCOM provides its organizational line chart, compose of personnel deployed within the business. Registration of business The registration of business is an act that is provided by the constitution. It is very important and must be implemented in order for the business to be legal and to perform well and freely. The following are the steps for registering a business in the Philippines.

  1. Prepare the article of partnership/corporation.
  2. Registration of the business name with the Bureau of Domestic Trade and Industry.
  3. Apply the registration of the partnership with the Securities and Exchange Commission.
  4. Get the necessary permit from the office of the mayor and license to operate from the treasure of the city of municipality where the business will be located.
  5. Secure a tax identification from the Bureau of Internal Revenue and a file VAT or Not-VAT permit.

Hiring Personnel

The following are the qualification for the interested job seekers. Electronics and Communication Engineer Preferably Male, 22-30 yrs. old - Licensed - At least 5 years of experience Technician - Preferably Male, 22-30 yrs. Old - BSECE or Electronics/ Electrical graduate - At least 3 years of experience in the related field Sales - Male or Female, 21-30 yrs. old

High School Graduate

  • With pleasing personality
  • Job Description and Responsibilities President Responsible in making final decision for every undertaking the business may encounter.
  • Administer over all activities and for sees projects, forecast, and solve problems. Manager (Stockholders) To assist the President and his duties and responsibilities.
  • Must be responsible in assigning different task of each personnel.
  • Responsible for preparing financial statement of the business. Purchasing Personnel
  • Responsible for good quality of purchased products - Responsible for purchasing low cost of product
  • Responsible for scheduling of purchased product Technicians
  • Responsible for repairing, servicing and installation Sales Personnel
  • Responsible for the sales of product, operational reliability of services and provides customer care.

Tags: management study

Category: Feasibility Study

  1. What is the name of the firm?
  2. Where is the location of head office and plant site?
  3. Give a brief description of the project.
  4. What are the assumptions being made including market projections, share and prices, investment costs, and method of financing?
  5. Mention the summary of findings and conclusions regarding the market feasibility, technical feasibility and financial feasibility.
  6. How shall the project be managed during the pre-operating period such as the firms or persons involved or to be involved in studying the different aspects of the project?
  7. How shall the project be managed during the operating period including the type of business organization, organizational chart and function of each unit management personnel, duties and time to be devoted to the project, qualification and compensation?
  8. What skills and corresponding numbers of labor are required such as qualifications, recruitment and training program, compensation, fringe benefits and facilities?

Include the time table of the project.

  1. Indicate the annual volume of the domestic demand for the past 10 year?
  2. Who are the major consumers of the product?
  3. What is the projected annual volume of the domestic demand for the next 5 years? Also indicate the method used and factors considered in preparing the projection.
  4. Who are the current and potential buyers of the product and where are they located?
  5. What is the annual volume of the domestic supply for the past 10 years?
  6. Who are the major producers of the product?
  7. What are the prevailing prices of the product?
  8. What are the present marketing strategies and practices of competitors?
  9. What shall be adopted in the project as to the selling organization, terms of sales, channels of distribution, location of the sales outlets, transportation and storing facilities?

Tags: Feasibility Study

Category: Feasibility Study | Comments Off Financial Study

It is important if the proposed project is financially feasible, meaning the project cost is afford by the board or the company. Also, it involves the thorough coverage of all the monetary information.

It covers the detailed information on the total project cost, initial capital requirements, sources of financing, financial statements and financial analysis. The profitability level of the project is also defined such as the net income after taxes to the total investment. The identification of sources of financing is an essential element of feasibility study including the currency, security, repayment period, interest, and other features. In addition, the financial health of the business is also assessed in the financial statements as well as the analysis showing the income, cash flow and balance sheets.

Other information such as break-even outputs, sales and prices, amount of sales required to earn a certain amount of profit and the cash payback period are also provided. Tags: Feasibility Study, financial study

Category: Feasibility Study | Comments Off Management Study

Management study involves the appropriate business organization such as the people who will be in-charge both before and after the operating periods of the enterprise as well as the function.

Factors to be determined in management study:

  • pointing out the firms or personnel who will be involved in the operation of the project or enterprise
  • type of business organization
  • organizational chart
  • functions of each unit management personnel
  • skills and numbers of labor required as well the duties and time to be devoted in the project
  • qualifications, compensations, and fringe benefits of the personnel involved
  • facilities to be used
  • recruitment and training programs of the personnel
  • status and timetable of the project

The Economic Feasibility Study

The economic feasibility study of a project is an estimate of the potential profitability of that project, or a study that measures the expected benefits from a certain project relative to its cost (Johnson and McCarthy, 2001; Wong et al., 1999). Examples of construction projects include highways, tunnels, bridges, water mains, dams, sewage systems, water treatment plants, power generation plants and pipeline networks.

Infrastructure projects can be classified as large construction projects that utilize vast amount of resources in terms of money, materials, labor, equipment and time (Salman et al., 2007; Kulkarni et al., 2004; Morley, 2002). Economic feasibility studies need to be conducted prior to the construction of infrastructure facilities due to the ponderous disbursement on infrastructure projects which needs to be weighed against the expected benefits resulting from these projects to the public and the national economy.

However, Owner decision makers and financial institutions build their decisions to proceed with and/or finance any project based on the results of the feasibility study of that project (Abou-Zeid et al., 2007; Vancas, 2003)in other to ensurethat the validity of economic feasibility studies of infrastructure projects is a vital step in ascertaining decisions related to the construction of infrastructure facilities are based on consistent and standard procedures that avoid the use of misleading or inadequate information. Economic benefits include the profits the project owners earned, taxes that are paid to the governments, benefits to the clients etc.

Theoretical Framework

Theoretical framework for the study is based on cost-benefit analysis of a construction project. Inability of the quantity surveyor to properly ascertain if a project is viable can lead to loses or project failure. The analysis is to determine the success factor, risk assessment and management, repition of project scoping and scaling, estimate the financial return, and select possible project options through the use of cost benefit analysis. Therefore a major theoretical approach that will be used for the study is to examine the cost-benefit of a construction project.

Cost-Benefit of Construction Projects

The major cause of project failure is described as the variation or deviation from the original project plan. Project monitoring and control could only effect corrective actions to bring deviated project plans on course, but failed to be mindfulness of identifying and analyzing the root causes of such variations.

Also project monitoring and control are not final cost and time effective to implement. Therefore, this study intends to fill those gaps created by project monitoring and control. Oberlender (2000) in his reports states that there is proneness for some designers to make changes during design in order to please clients without regard to the effect on these changes on the project final cost and schedule.

He furthermore by saying that changes can be catalogued as either project development or scope growth. Project development relates to changes that are needed to give consideration to the scope as currently defined scope growth relates to changes that alter the projects original scope; the scope that was approved before starting the design process.

These changes, though inevitable usually add final cost and time to the original design. The usual practice is that the lead designers must develop a system of monitoring the design effort to ensure that work is progressing without excessive billable hours, but is still producing adequately defined plans and specifications for the contractors to execute the work during construction.

Though this will reduce the contractor's complaints of pretty drawings in construction that are full of error and lack constructability, they will still add to final cost and time of the project. This study favors' identifying the prominent factors responsible for scope growth and other variations in plans, address them accordingly before the final project design with a view of mitigation or eliminating the negative effects.

Therefore It is compulsory that every propose change must be subjected to a formal review and approval process that considers final cost and schedule implications as well as the quality specification and standards; plus consequential effects on other activities. The authority to approve changes during design must be limited. It is a fact of life that changes the variations in plans occur during the implementation stages of project and they might result to project failure if not properly rectified. nevertheless project managers need to be always ready to address the problems.

The earned-values system presented by Oberlender (2000) can be determined by multiplying the percent complete times the budgeted designed hours for each task. The earned-value can be compared to actual design-hours billed to the job and the planned design-hours to measure the performance of the design process.

  • Earned-value = Percent complete x Budget for that account Percentage completion = Actual final cost or work-hours to date Forecast at completion
  • For the determination of the overall project percent complete, therefore;
  • Percent complete = Earned work-hours/Naira all accounts
  • Budget work-hours/Naira all accounts
  • Final cost performance index (CPI) = Sum of earned work-hours of task included
  • Sum of actual work-hours of task include Schedule performance index SPI = Sum of earned work-hours to date Sum of scheduled work-hours to day
  • Scheduled variance (SV) Earned work hours or naira-Budgeted work Hours or Naira
  • SV = BCWP – BCWS
    Final cost Variance (CV) = Earned work-hours or Naira-Actual work-hours or Naira
  • CPI = BCWP - ACWP
  • Where BCWP = Budgeted final cost of work performed
  • BCWS = Budgeted final cost for work scheduled
  • ACWP = Actual final cost of work performed
  • CPI = final cost performance index problems.

The original final cost estimate is the budget actual final cost (BAC) in the earned-value analysis. Therefore, if the original final cost estimate for the project is incorrect, then all progress measurements during execution of the project would be measured against an incorrect budget. The system of recording final costs charged against the job must be consistent to provide realistic comparisons from one reporting period to another.

Also the method of measuring work completed must be consistently applied from one reporting period to another, otherwise the predicted status of the job will vary widely. Each project must be assessed based on the unique circumstance and conditions that apply to the project in order to use the earned-value system to manage the project.

The partial list of items that can cause the final cost or schedule to vary from the original project plan are presented by Oberlender (2000) as follows: estimating errors, technical problems, design errors, test data problems, constructability and equipment problems, scope control (change orders), management problems, personnel skill level, resource availability organization structure, economic/inflation, delay material deliveries, delay equipment deliveries, poor production rates, subcontractors interference and delay, act of God (weather, fire, flood etc).

Telsang (2004) also observes that the following affects plan; non availability of materials due to shortages or late delivery, plant, equipment and machine breakdown, change in demand, design and rush orders, absenteeism of workers, and lack of communication among various functional areas of business.

In a similar vein, variation factors of quality plans are usually described as assignable variation. According to Stevenson (2002), unlike natural variation, the main sources of assignable variation can usually be identified (assigned to a specific cause) and eliminated. He further states that; tool wear, equipments that needs adjustment, defective materials, human factors (carelessness, fatigue, noise and other distractions, failure to follow correct procedures and so on) and problems with measuring devices are typical sources of assignable variation.

Some challenges faced by the analysis includes:

  • The poor awareness of the importance of feasibility/viability analysis
  • Benefits are not easily quantifiable in terms of social, economic and environmental benefit.
  • The scope of feasibility/viability was poorly judged.
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