Feasibility Studies and Reports

Purpose and Format

What are Feasibility Studies?

Feasibility studies analyze the technical and economic
practicalities of potential courses of action.
The results of these studies are reported in feasibility reports.

What are Feasibility Reports?

Feasibility reports are similar to activity reports [e.g. lab
reports with results] and product evaluations because they
discuss activities and products.
However; feasibility reports discuss proposed activities and
products, whereas activity and product evaluations discuss
completed activities and products already in use.

What are Feasibility Reports?

Because hard data is often not yet available, feasibility
reports may use projected, rather than substantiated facts and
data.
Also, feasibility reports may discuss multiple proposed
activities and products, whereas activity and product
evaluations discuss only one completed activity or product.

What are Feasibility Reports?

 Feasibility reports recommend courses of action based on

technical and economic analyses. They are written in
response to requests from management and clients under
circumstances like those following:

Circumstances Warranting Feasibility ReportsExamples

To evaluate the potential for success or a proposed activity or

product, such as

a new marketing strategy

the replacement of an obsolete tool to improve production

the purchase of a new product to improve production

Circumstances Warranting Feasibility Reports

To evaluate success potential for a proposed course of action.
When taking no action is the only alternative to the proposed
course to determine potential damage control.
To compare proposed activities or products to determine the
best of multiple alternatives .

Circumstances Warranting Feasibility Reports

Usually feasibility studies and reports are undertaken to evaluate the

potential for success of a proposed activity or product, such as a new
marketing strategy, the replacement of an obsolete tool to improve
production, or improve performance.

The proposed activity or product is hoped to be an improvement over

the present satisfactory activity or product.

Circumstances Warranting Feasibility Reports

Taking no action is sometimes the only alternative to the single

proposed activity or product, but taking no action may not always be a
viable choice, as in the case of sanctions imposed on a company by an
outside agency like the EPA or OSHA.

In such cases, the damage control model applies to the report.

Circumstances Warranting Feasibility Reports

To compare proposed activities or products to determine the best of

multiple alternatives such as the site location for a new facility or the
purchase of a new pump.

To determine (when the present activity is satisfactory), whether

taking no action is the best alternative.

To determine, when the present activity is unsatisfactory, which one of

the proposed activities must be selected.

The Economic Feasibility Report

1

When the present activity or product is satisfactory, and therefore,

taking no action is an alternative, to the proposed activity or product,
for a proposal to be a satisfactory alternative, either:

The benefits must exceed the costs (commonly used in private industry) or

The benefits divided by the costs must equal 1.0 (commonly used by government
agencies and non-profit organizations such as educational institutions).

The Economic Feasibility Report

2

When the present activity or product is unsatisfactory, and therefore

taking no action is not an alternative. (e.g., action must be taken either
by necessity of situation, or contractual obligation), the most
satisfactory alternative then is selected based on either:

The greatest benefits minus costs, even when the costs exceed the benefits for all
alternatives (commonly used in private industry). Or

The highest ratio of benefit divided by cost, even when this ratio does not exceed
1.0 for all alternatives (commonly used by government agencies and nonprofits).

The Economic Feasibility Report

A technical feasibility analysis is typically the result of significant
research aid development.

The criteria for acceptance of an activity (e.g.. an improved chemical

process) or a product (e.g. a larger carburetor) are determined by
comparing the increased benefits (e.g., increased acceleration using a
proposed carburetor) with the increased cost in dollars plus the
"disbenefits" (disadvantages) (e.g. increased fuel consumption and
maintenance).

The Sections of a
Feasibility Report

INTRODUCTION

BACKGROUND

SCOPE

DISCUSSION

CONCLUSIONS

RECOMMENDATIONS

INTRODUCTION

The introduction is first a statement of the problem, in

essence the big question that is to be answered by the reports
recommendations.

The introduction should include the. subject and purpose of

the study and its authorization.

Note the importance of the authorization, which provides you

with the authority to gather data and enlist the help of other
employees.

BACKGROUND
The background should include the changes that occurred to
create the necessity for this study.
It should also discuss why the circumstance is important and
merits this consideration.

SCOPE
The statement of scope discusses proposed alternatives to the present
activity or project that are the basis of the study.

 It should be clearly stated in the scope section when the present

activity or product (or its absence if no activity or product presently
exists) is satisfactory.

When only one alternative is proposed, the present activity or product

(or its absence) is deemed to be a viable option unless otherwise
stated.

Scope - continued
Include the basis for selecting the proposed activities or products (e.g.,
data from scale model tests that arc deemed to be sufficiently
accurate) and

conditions that limited the selection of proposed activities or products

(e.g., the proposed activity must not require an inventory of spare
parts, or the proposed product must not cost more than $2000/yr. for
operating expenses.).

Discussion
It is in the discussion phase that you must present your
figures and calculations for each alternative, treating each
alternative as a separate unit to avoid confusion.
In this section, spreadsheets, graphs, and other materials may
be inserted into the text, or they may be referenced by
appendix numbers.

Conclusions

The Conclusions section discusses the natural results from the

information presented in the discussion section. This section is the
link between the Discussion and the Recommendations.

Because this section links the Discussion and Recommendations, the

Conclusions section should be logical and all bottom-line figures
should be calculable by the reader from the information provided.

Recommendations
The Recommendation section presents the course or action
determined as a result of this study. The first recommendation
discussed is usually the course of action that is the most advantageous
to resolve the problem.

When a proposed course of action is recommended over the present

course of action, it is appropriate to discuss other concerns that are not
the subject of the analysis. For example, for each recommended
course of action, discuss the method, time required, internal capability
of the organization, and availability of resources.

Recommendations - continued
Also, related effects can be discussed such as the impact on
other departments, other components, and the environment.
When the present course of action remains the preferred
course of action, alternative courses of action may be
suggested for further study.

Establishing Criteria
In order to evaluate choices properly, one must first establish
the standards for evaluation.
A criterion (singular) has three elements:
Name

uniform identification

Standard

established limit of the criterion

Rank

weighted value in the decision

Three Types of Criteria

Technical Criteria: operating characteristics of processes,
mechanisms, etc.

 Management/Maintenance Criteria: concerns of day-to-day

operation
Financial Criteria: cost and budget matters

Development of Criteria
To create criteria, you must first list questions that must be
answered to make a proper decision and make
recommendations.
Next, develop answers to these questions that establish
parameters for the decision process: maximum and minimum
performance standards, material quality, etc.

Using Criteria
Once the criteria have been established, they must be applied
uniformly.
Measurement standards must also be consistent; all length
measurements, for example, should be expressed in either
metric or English standards; all temperature measurements
should be expressed on the Fahrenheit, Celsius, or Kelvin
scale.

Ranking Criteria
Ranking is accomplished by determining how seriously each
item can affect the successful completion of the project or
process.
Example: will the item under consideration
Prevent or halt the activity if the standards are not met?
Slow or impede the activity if standards are not met?

 Have little or no effect on the activity either way?

Format and Organization

Your format should be consistent with the standard format for
your company or group.
If no format is prescribed for you, you may develop your
own. You must, however, be consistent in your application of
headings, tabulation, spacing, numbering, bulleting, and all
other aspects of the physical document.

Format and Organization

Organize the discussion section according to criteria, with
each criterion receiving a major heading. Dont try to play
down an unfavorable item by placing that criterion in a subpart.
Use parallel construction in your organization, treating all
criteria sections in the same respective order for each option.

Format and Organization

Each section should deal with one criterion and evaluate the
alternatives in terms of that criterion.
Each section should be a microcosm of the larger context of
the report: introduction, body and conclusion.
The introduction should define the criterion and discuss its
standard, rank, and source if these aspects are not discussed
previously.

Format and Organization

 In the body, explain the relevant facts about each alternative

in terms of the criterion.
In the conclusion, state the judgment you have made as a
result of applying this criterion to the facts.
In cases of multiple options, you may wish to treat each
option separately, applying the criteria in uniform order to
each choice within each options section.

A Final Note:
Take your audience into consideration. Readers of the report
may not have the same technical background that you do.
Thus, you should follow Orwells dictum to use everyday
English equivalents in place of jargon.