FEASIBILITY STUDY

CHAPTER 4

TECHNICAL STUDY

REGINALDO, JERICHO VIA I.

OPLEGIDA, MANILYN F.
BSBA- HRDM 4A
 NATURE AND CONCEPT

The second major component of a project feasibility study is the

technical study. It provides the details as to how the products will
be produced or how the services will be delivered. It is a written
explanation of the whole manufacturing processes, and serves as
the technical plan as to how the business will produce, store and
deliver the product to end users.
 The technical study is usually written after the market study has been
conducted and the unsatisfied demand has been determined. in specific terms,
the technical study aims to determine

1. the manufacturing processes to be adopted;

2. the plant capacity and design;
3. the production schedule;
4. product composition, physical appearance, and chemical properties;
5. the available suppliers of machinery;
6. machinery specification, capacity, prices, and auxiliary equipment;
7. the sources of raw materials, labor, and utilities;
8. the plant layout, including plant location and specifications;
9. the specifications and requirements of utilities; and
10. provisions for waste disposal.
 There are three major interrelated activities comprising the
whole technical study. These are the

1. Selection process;
2. Determination process; and
3. Projection process.

These three major activities congruently move towards one

common objectives, that is, to determine whether the cash
generated from the project is large enough to achieve the
desired rate of return on investment. This underlying objective
should be answered squarely at the end of the technical study.
 SELECTION PROCESS
The selection process is a major area tackled in a technical study.
Selection is done in the following major technical actions:

1. The manufacturing process to be adopted as influenced by the type of raw

materials, chemical content, type and capacity of manufacturing plant and
other related factors affecting the choice of manufacturing process;
2. The plant and machinery capacity to be used, including the specific design
and layout;
3. The physical appearance of the product, including its mechanical
components; and
4. The suppliers of machinery and auxiliary equipment.
 The proponent should discuss the different options available and present
the alternatives, vividly indicating all possible consequences, advantages and
disadvantages, and the specific requirements of each alternative. Supposing
there are three processing methods available to manufacture the proposed
product, i.e., high-pressure method, low-pressure method, and moderate-pressure
method. The differences between these three manufacturing processes should
be clearly outlined in terms of processing time, types of raw materials to be used,
ingredients to be used, formula applied, types of processing, and if possible, the
estimated cost of each alternative procedure.
The proponent should make the necessary recommendation as to which
process should be adopted and the cite the reason for the recommendation,
along with the benefits that may be derived from each. This will help the
investors decide as to which should be adopted. However, the prospective
investors may select a manufacturing option that is different from what is
recommended.
 DETERMINATION PROCESS
Following the selection PROCESSING METHOD
process is the determination
HIGH MODERATE LOW
process. Once the preferred
PRESSURE PRESSURE PRESSURE
processing method has been
QUANTITY OF PRODUCT XXXX XXXX XXXX
selected, the study should next
determine the requirements for RAW MATERIALS A XXXX XXXX XXXX
raw materials in terms of RAW MATERIALS B XXXX XXXX XXXX
quantity and quality, the
RAW MATERIALS C XXXX XXXX XXXX
required labor, and the overhead
expenses. The technical study DIRECT LABOR X XXXX XXXX XXXX
may present in a tabular format DIRECT LABOR Y XXXX XXXX XXXX
what have been determined as
DIRECT LABOR Z XXXX XXXX XXXX
necessary inputs to produce on
unit of product. FACTORY OVERHEAD XXXX XXXX XXXX