technical and commercial appraisal

technical and commercial appraisal

1. TECHNICAL APPRAISAL & COMMERCIAL APPRAISAL GEETH LEKSHMI P ROLL NO : 032

2. PROJECT APPRAISAL The exercise of project appraisal simply means the assessment of a project in terms of its economic,social and financial viability. It basically aimed at determining the viability of a project and also in reshaping the project so as to upgrade its viability. Systematic and comprehensive review of the economic, environmental, financial, social, technical and other such aspects of a project to determine if it will meet its objecti ves.

3. SCOPE OF APPRAISAL Choice of technical process and appropriate technology Size and scale of operations. Locational aspects of the project and availability of infrastructural facilities. Plant layout and factory buildings Technical engineering services.

4. ASPECTS OF PROJECT APPRAISAL TECHNICAL ASPECT COMMERCIAL ASPECT FINANCIAL ASPECT ECONOMIC ASPECT MANAGERIAL ASPECT

5. TECHNICAL APPRAISAL Technical appraisal is an in-depth study to ensure that a project is (i) soundly designed, (ii) appropriately engineered and (iii) follows accepted standards . These considerations differ from project to project. But, in any case, the emphasis is on the inputs needed for the project and the resulting outputs of goods & services. Every project must be technically feasible. It provides a comprehensive review of all technical aspects of the project. It involves a critical study of Location and Site.

6. Factors that influence industrial location are: Raw material supplies Proximity of markets Transportation facilities Power and fuel supply Water Taxes and fees

7. Technical Feasibility Manufacturing process/technology selected Technical collaboration arrangements made Availability of physical and social infrastructural facilities. Technical engineering services. Plant layout and factory building

8. COMMERCIAL APPRAISAL Related with market,product demand,competitors,marketing strategies. Its purpose is to establish whether a proposed activity will be viable in a commercial sense. A proposal may be considered commercially viable if over its useful life,it is expected to earn sufficient revenue to cover its costs and yield an acceptable financial rate of return. Arrangements for supply of inputs and marketing the project output.

9. Whether demand projections made for the output of the project is reasonable? Based on available survey Based on industry association projection independent market survey Adequacy of marketing infrastructure Distribution network Transport facilities Warehousing and stock level

10. DEMAND FORECASTING Techniques of Demand Forecasting Qualitative methods: rely on human judgment and opinion. Buyers’ Opinion Sales Force Composite Market Simulation Test. Delphi method

11. Quantitative method Use mathematical or simulation models based on historical demand or relationships between variables. Trend Projection Barometric techniques Econometric techniques