Introduction to Feasibility Studies

Abstract

The purpose of this chapter is to introduce the reader to feasibility studies, project appraisal, and investment analysis. Feasibility studies are an example of systems analysis. A system is a description of the relationships between the inputs of labour, machinery, materials and management procedures, both within an organisation and between an organisation and the outside world. Similarly, buildings may be seen as combinations of spaces and inputs interacting with each other and the physical, social and economic environment. Systems analysis is a set of techniques used to understand and improve methods of production. While systems analysis is usually applied to existing organisations and methods of production, feasibility studies are used to examine the practicality of proposals. In economic terms, feasibility studies are simplifying models of the real world, focusing attention on certain aspects of alternative schemes.