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Techniques of project formulation
Short answer
Project formulation uses feasibility analysis, techno-economic analysis, project design and network analysis, input analysis, financial analysis, social cost-benefit analysis, environmental analysis, socio-economic survey, SWOT, sensitivity and risk analysis, and logical framework. These techniques together produce a project report with terms of reference, design basis, cost estimate and indicators.
Describe the different techniques (methods) of project formulation.
Project formulation is the process of developing a project idea into a detailed plan by defining objectives, scope, technical design, cost, benefits and implementation arrangements, so that it can be appraised and implemented.
Techniques of project formulation
| Technique | Description |
|---|---|
| Feasibility analysis | Checks that the project is possible technically, economically, financially, environmentally and socially |
| Techno-economic analysis | Selects technology, capacity, location and layout, and estimates demand, cost and market potential to screen the options |
| Project design and network analysis | Defines the activities, their sequence and timing (WBS, network, CPM/PERT) and the resources each needs |
| Input analysis | Studies the resources needed: materials, manpower, equipment, utilities, finance, and their availability and cost |
| Financial analysis | Cost, funding, cash flow, profitability |
| Social cost-benefit analysis (SCBA) | Compares all costs and benefits to society in monetary terms (B/C ratio, NPV, IRR) |
| Pre-investment appraisal | Final review of all the above analyses before funds are committed |
| Environmental analysis | Impacts and mitigation (IEE/EIA) |
| Socio-economic survey | Effects on people, participation |
| SWOT analysis | Strengths, weaknesses, opportunities and threats |
| Sensitivity and risk analysis | Effect of changes in cost, benefit or time on viability |
| Logical framework / ToR preparation | Structures objectives, outputs, indicators and assumptions |
The techniques are used together; the output is a project report with ToR, design basis, cost estimate and indicators for decision.
✓ Answer checked by Claude Opus 5.5 (high effort)
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