Northwestern Visayan Colleges

COLLEGE OF HOSPITALITY
AND TOURISM MANAGEMENT

FEASIBILITY STUDY
(Your Project Title Here)

Example of Working Title:

(Feasibility Study of Establishing a Food Park that
Showcases Local Cuisines and Products in a
Tourist Destination)

Conducted by:

(NAME)
Lead Researcher

Members:

1. (NAME)
2.
3.

Submitted to:

MS. MAILA RUIZ, LPT

Subject Instructor

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 Date:
TABLE OF CONTENTS

1. EXECUTIVE
SUMMARY.................................................................
........................(put your Page number here)

2. DESCRIPTION OF PRODUCTS AND

SERVICES................................................................

3. TECHNOLOGY
CONSIDERATIONS.....................................................
.................................

4. PRODUCT/SERVICE
MARKETPLACE..........................................................
.......................

5. MARKETING
STRATEGY ................................................................
......................................

6. ORGANIZATION AND
STAFFING..................................................................
........................

7. SCHEDULE................................................................
.............................................................

8. FINANCIAL
PROJECTIONS ...........................................................
......................................

9. FINDINGS AND
RECOMMENDATIONS ...............................................
................................

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 10. REFERENCES
…………………………………………………………………
…………………………………….

EXECUTIVE SUMMARY:
The executive summary provides an overview of the content contained in
the feasibility study document. Many people write this section after the
rest of the document is completed. This section is important in that it
provides a higher-level summary of the detail contained within the rest of
the document.

DESCRIPTION OF PRODUCTS AND SERVICES:

This section provides a high-level description of the products and/or
services which are being considered as part of the feasibility study. The
purpose of this section is to provide detailed descriptions of exactly what
the organization is considering so this information can be applied to the
following sections of the document. It is important that this description
captures the most important aspects of the products and/or services that
the organization is considering as well as how it may benefit customers
and the organization.

TECHNOLOGY CONSIDERATIONS:
This section should explain any considerations the organization must
make with regards to technology. Many new initiatives rely on technology
to manage or monitor various business functions. New technology may be
developed internally or contracted through a service provider and always
result in costs which must be weighed in determining the path forward.

PRODUCT/SERVICE MARKETPLACE:

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This section describes the existing marketplace for the products and/or
services the organization is considering. It may describe who the target
market consists of for these products or services, who the competitors
are, how products will be distributed, and why customers might choose to
buy our products/services. Most marketplaces are dynamic environments
in which things change constantly. To enter a new marketplace blindly will
usually result in an organization not fully understanding its role and not
maximizing its resulting benefits.

MARKETING STRATEGY:
This section provides a high-level description of how the organization will
market its product or service. Some topics which should be included are
how does an organization differentiate itself from its competitors; types of
marketing the organization will utilize; and who the organization will
target. Marketing efforts must be focused on the right target groups to
yield the greatest return on investment.

ORGANIZATION AND STAFFING:

With many new products or services there may be a need for additional
staffing or for an organization to restructure to accommodate the change.
These are important considerations as they may result in increased costs
or require an organization to change its practices and processes.

SCHEDULE:
This section is intended to provide a high-level framework for
implementation of the product or service being considered. This section is
not intended to include a detailed schedule as this would be developed
during project planning should this initiative be approved. This section
may include some targeted milestones and timeframes for completion as
a guideline only.

FINANCIAL PROJECTIONS:
This section provides a description of the financial projections the new
initiative is expected to yield versus additional costs. Financial projections
are one key aspect of new project selection criteria. There are many ways
to present these projections. Net present value (NPV), cost-benefit
calculations, and balance sheets are just some examples of how financial
projections may be illustrated. This section should also provide the
assumptions on which the illustrated financial projections are based.

FINDINGS AND RECOMMENDATIONS:

This section should summarize the findings of the feasibility study and
explain why this course of action is or is not recommended. This section
may include a description of pros and cons for the initiative being
considered. This section should be brief since most of the detail is
included elsewhere in the document. Additionally, it should capture the
likelihood of success for the business idea being studied.

REFERENCES:

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Put all your references here (link, books & etc.)

Output in Operations Management

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 (Service Industry)

Process mapping and improvement.

Supply chain design and optimization.
Quality control plan development.
Production scheduling and inventory management.
Lean or Six Sigma project implementation.

Process mapping and improvement:

Supply chain design and optimization:

Quality control plan development:

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Production scheduling and inventory management:

Lean or Six Sigma project implementation:

Case Study: Make Versus Buy

ABC Ltd. is a manufacturing company engaged in the manufacturing of valves. They have
been in the business for last 3 years and have been manufacturing only one type of valves. They
started their business initially with sales of 10,000 valves per month and now they have grown the
volume to about 50,000 valves per month. They have been buying all the raw material for the valve
and were doing all the manufacturing in house. Now they have established themselves in the market
and are planning to expand and produce different varieties of valves. They have their plant in the
main city and the total area of the plant is 50,000 sq. ft. Now if they want to expand and continue
doing all the activities of manufacturing of all the varieties in house, they will need another 50,000
sq.ft. of the area. In the recent times, the land prices in the area have more than doubled in the last
3 years and still land is available with great difficulty. Mr. Mohan is the production head of ABC Ltd.
and has been successful with the production and the level is continuously increasing. But in recent

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times, he is facing the problem of quality complaints which have gone up from average 0.2 % in
previous 2 years to 0.5 % this year. Also, he is finding that there is a high level of dissatisfaction
among the workers regarding workload as well as salary levels. The workers are regularly
complaining about the over work.

Although, Mr. Mohan has found that the workers have been spending lot of time on tea
breaks, lunch breaks and even in between the production spending lot of time talking to each other.
But, due to insufficient workers and staff, he is unable to take strict action and the workers are
taking advantage of this situation. For completing the work and delivering the products timely, he
must employ workers on overtime and his overtime cost has also increased 3 times. Mr. Mohan is
worried about the new expansion plan of the management and is worried where the new workers
would come from as he is already finding shortage of workers for the existing job. He has requested
the management not to go for expansion immediately and look at improving and consolidating the
existing set up. He has sent his request to Mr. S. Kumar Director – Operations.

Mr. Kumar has gone through the request of Mr. Mohan and called a meeting of all the
department heads and explained the situation to all concerned. The marketing manager has
expressed very bullish prospect about the company’s growth and said that the company should take
advantage of growing economy and established brand image of the company and go for expansion.
The finance manager also expressed that this would result in economy of scale for the products and
will further increase the profitability of the products. Mr. Mohan again expressed his problems
regarding availability of manpower as well as production control and effect on quality and
productivity. The Marketing manager asked the Production manager about the option of
outsourcing.

Mr. Mohan is skeptical about the outsourcing option as he felt that the outside agency will
always charge more as he will try to make his profit as well and is worried about the possible
problems of deliveries. Mr. Kumar asked the Mr. Naresh who is the Purchase manager about his
views. He said that since the suppliers would also be interested in doing the business, they would
not like to delay as with delay they also incur loss. The Finance manager said that we can look at cost
comparison for buying against in house manufacturing.

After listening to all the views, Mr. Kumar told Mr. Mohan to work out the cost of
production for future sales as per the forecast given by the Marketing department. He also told Mr.
Naresh to collect the details of the future requirements to get the purchase cost details for few
components of the valve.

Mr. Mohan and Mr. Naresh have collected their data and they have presented the data in
the meeting called by Mr. Kumar to review the plan. First the marketing head Mr. Suresh presented
his market forecast and then Mr. Mohan presented his report and explained the details as follows.

One supervisor with monthly salary of Rs. 5000 with expected increase of 10 % per year.
Direct wages of worker as Rs. 4 per unit.
With 10 % reduction in second year, no change in 3rd year and increase of 10 % every
subsequent year.
Material cost of Rs. 14 per unit with an increase of 10 % every year.
Power and fuel cost of Rs. 2 per unit with increase of 10 % every year.
Indirect labor as 50 % of direct labor.
They will have to buy a new machine with a cost of Rs. 50 lac. With usable life of 5 years

Mr. Naresh explained his details as follows:

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 Component price from supplier at Rs. 20 for the first 2 years with an increase of 10 % every
subsequent year.
Transportation cost of Rs. 2 per unit for the first year with increase of Rs. 0.20 every
subsequent year.
Inventory cost (storage cost) as 5 % per year of the basic material cost.

The Marketing manager has given the sales forecast for next 5 years as follows:

Year 1 2 3 4 5

Sales Quantity 300000 500000 700000 900000 100000

Case Study: Make Versus Buy

Questions:

1. Based on this data, is it economical for ABC Ltd.to go for buying the product from market
or manufacturing in house.

Answer:

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 2. What other factors should ABC Ltd. look at for making this decision?

Answer:

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