OPERATIONS MANAGEMENT

Lecture 9

Feasibility Report
A report about the possible success of the business in future. It is a plan for the proposed function of the business to be established covering a period of 5 to 7 years.

Contents of the Feasibility Report

i. ii. iii. iv. Cover Sheet Executive Summary Introduction --- History of the group (personal portfolio) Management (Administration) Briefly describe the Board of Directors and Management. v. Location of plant and project (Head Office and Factory) vi. Description of the project:
a. b. c. d. Process Technical Know-how Technical Collaboration Competitors edge for quantity and quality

Contents of the Feasibility Report

vii. Production Process viii. Raw Material ix. Expense Estimates: (Proposed amounts) a. Capital expenditures ---at different levels b. Saving through extra shift c. Provision for future expansion d. Revenue expenditure x. Capital Structure:
a. b. Initial capital required Second phase requirement

Contents of the Feasibility Report

x. Capital Structure:
c. d. e. f. Requirement for expansion Borrowings Government aid and grants Foreign loan and investment funding

xi. Market Consumption: (Survey & policies)

a. Market Potential b. Consumption ( whether local or international) c. Policy evolved through committee

Contents of the Feasibility Report

Market Consumption: d. Government Contracts e. Market Expansion Plans xii. Dividend Policy: a. Higher than interest rates b. 5 Years plan preferably c. Provision for allowances and reserves xiii. Economic Factors: (GDP, NNP)

Contents of the Feasibility Report

xiv. Other Socio-Economic Benefits: a. Employment Opportunities b. Benefit of Economies of Scale c. Training and Manpower d. Saving of Foreign Exchange (Import substitutes) e. Transfer of technology f. Taxes and revenue generation g. Raising living standard