--- title: "Techniques of project formulation" subject: "Project Engineering" chapter: 2 key: "semester_7/project_engineering:techniques-project-formulation" source: https://www.bctengineer.com/q/semester_7/project_engineering/techniques-project-formulation site: BCT Engineering --- # Techniques of project formulation Project Engineering · Chapter 2: Project Appraisal and Project Formulation - Asked in: 2080 Baisakh, 10 marks; 2079 Baisakh, 6 marks; 2075 Asoj, 8 marks (asked 3 times) - Video: [Project Formulation and Stages Involved in it - Construction Projects and Report Preparation](https://www.youtube.com/watch?v=HyM6d1ZXxXs) — Ekeeda - Answer checked by Claude Opus 5.5 (high effort) on 2026-10-14 - Page: https://www.bctengineer.com/q/semester_7/project_engineering/techniques-project-formulation - Whole chapter: https://www.bctengineer.com/md/semester_7/project_engineering/chapter-2 ## Question Describe the different techniques (methods) 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. ## Answer **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. ## Check yourself The answer's key points as multiple-choice questions, with the correct option and why. 1. What is project formulation? A. Paying contractors B. Developing a project idea into a detailed plan defining objectives, scope, design, cost, benefits and arrangements so it can be appraised C. Closing a project D. Daily supervision Answer: B. Formulation makes the idea ready for appraisal and implementation. (Key point: Definition) 2. What does cost-benefit analysis compare? A. All costs and benefits in monetary terms (B/C, NPV, IRR) B. Only costs C. Only environmental effects D. Only schedules Answer: A. CBA compares costs and benefits monetarily. (Key point: CBA) 3. What does input analysis study? A. Resources needed, such as materials, manpower, equipment, utilities, finance, their availability and cost B. Impact on people C. Demand and price D. Layouts only Answer: A. Input analysis studies resource needs. (Key point: Input analysis) 4. What does sensitivity and risk analysis assess? A. Bid security B. Colour of drawings C. Team motivation D. Effect of changes in cost, benefit or time on viability Answer: D. It tests how viable the project is when inputs change. (Key point: Sensitivity) 5. What does the logical framework structure? A. Staff only B. Objectives, outputs, indicators and assumptions C. Costs only D. Legal clauses Answer: B. The logframe structures objectives, outputs, indicators and assumptions. (Key point: Logical framework) ## Related in Project Engineering - [Necessity of appraisal; formulation techniques](https://www.bctengineer.com/question.md?key=semester_7%2Fproject_engineering%3Aappraisal-necessity-formulation-techniques) — Project Engineering, chapter 2, asked 2× - [Appraisal vs formulation; formulation techniques](https://www.bctengineer.com/question.md?key=semester_7%2Fproject_engineering%3Aappraisal-vs-formulation-techniques) — Project Engineering, chapter 2, asked 2× - [Need of formulation; techniques for ToR](https://www.bctengineer.com/question.md?key=semester_7%2Fproject_engineering%3Aformulation-need-techniques-tor) — Project Engineering, chapter 2 - [Formulation and appraisal; proposal procedure](https://www.bctengineer.com/question.md?key=semester_7%2Fproject_engineering%3Aformulation-appraisal-define-procedure) — Project Engineering, chapter 2 - [Formulation, appraisal, proposal procedure, CBA drawbacks](https://www.bctengineer.com/question.md?key=semester_7%2Fproject_engineering%3Aformulation-appraisal-cba-drawbacks) — Project Engineering, chapter 2 - [Short note: Environmental analysis for formulation](https://www.bctengineer.com/question.md?key=semester_7%2Fproject_engineering%3Aenvironmental-analysis-formulation-note) — Project Engineering, chapter 2 ## Related in other subjects - [Isoparametric formulation; eight-noded shape functions](https://www.bctengineer.com/question.md?key=semester_8%2Fcomputational_techniques_in_civil_engineering%3Aisoparametric-eight-noded) — Computational Techniques in Civil Engineering, chapter 4 - [Evaluate project using AW at 12%](https://www.bctengineer.com/question.md?key=semester_6%2Fengineering_economics%3Aaw-project-12-percent) — Engineering Economics, chapter 3 - [Best project for 4-year and 8-year service periods](https://www.bctengineer.com/question.md?key=semester_6%2Fengineering_economics%3Aselect-best-project-fw-4yr-irr) — Engineering Economics, chapter 4 - [Risk identification techniques](https://www.bctengineer.com/question.md?key=semester_7%2Fict_project_management%3Arisk-identification-techniques) — ICT Project Management, chapter 12