Basic Element of An Investment Project: Technical Study (I)
All those resources to be taken into account to carry out the production of goods or services.
Concept.
“It consists of designing the optimal production function that best use available resources to obtain the desired product. It is what we are going to claim to produce, what equipment to use.
Objectives.
• Verify the technical feasibility of manufacturing the product to be created.
• Analyze and determine the optimum size, the optimal location, equipment and facilities required for production.
1. Product Description, 2. Description of the manufacturing process chosen (with flowcharts), 3.Determination plant size and production program, 4. Selection of machinery and equipment, 5. Location of the plant, 6. Plant distribution, 7. Availability of materials and facilities, labor 8.Requirements 9. Waste, 10. Estimating the cost of investment and production of the plant.
Optimal size.
It is one that ensures the highest return from the private point of view or the biggest difference between social benefits and costs. The size of a project is its capacity and is expressed in units of production per year.
According to the market segment that was obtained through market research, determine the quantity of products to produce and thus the size of the plant, can also claim based on both present and future.
Factors that determine or constrain the size of a plant.
In practice, determining the size of a new production unit is a task limited by the mutual relationships between the size and demand, availability of raw materials, technology, equipment and funding. All these factors contribute to simplify the process of successive approximations, and alternatives among which size to choose from, are being reduced as the conditioning factors are discussed above.
1.The size of the project and demand. A very important factor that determines the size of the project is demand. By comparing the size of the demand draft can get 3 different results;
a) That the demand is greater than the minimum size of the project.
b) That the magnitude of demand is the same order as the minimum size of the project.
c) The demand is very small relative to the minimum size.
The proposed project size may be accepted only if that demand is clearly superior to that size.
2.The size of the project and supplies and consumables. The supply sufficient in quantity and quality of raw materials is a vital aspect in the development of a project, since it depends directly on the quality of goods or service will address the timely delivery of the same, and the image consumers will have it. This involves the search for suppliers and public standing nearby.
3.The project size, technology and equipment. At present there are certain processes or production techniques that require a minimum scale to be applicable, that below that level would be too high costs.
It is very important to observe the relationship between the size, investment, production costs, supply and demand.
4.The size of the project and financing. Financial resources are insufficient to meet the investment needs of the minimum size plant, it is clear that the project is impossible. On the contrary, if sufficient resources are available to choose between different sizes, the wisest course would be to choose that size that can be financed with greater comfort and safety.
The size of the project and organization. When it has done a study to determine the most appropriate size of the project is necessary to ensure that staff have to address it.
Production process.
To get to the finished good or service requires a process. It is understood as the technical process used in the project to obtain the goods or services from inputs, and is identified as the transformation of a series of inputs into products by a particular product function.
It is necessary to systematically describe the sequence of operations to submit inputs to its original state so as to obtain the product in its final state. In each type of project inputs and outputs terms have specific meaning must be:
a) Initial state:
• major inputs. Property, natural resources or persons subject of the transformation process.
• Input Side. Goods or resources to carry out the transformation process, both for its operation as for maintenance.
b) The process of transformation:
• Process. Brief description of the steps needed to go from start to end.
• facilities, equipment and facilities necessary to perform transformations.
• Staff needed to run the transformation process.
c) Final state:
• Main products. Assets, resources or people who have undergone the process of transformation.
• By-products. Assets, resources or people who have experienced only partial transformation process or are not pursued a result of this process, but has an economic value, albeit marginal, to justify total operation.
• Produced Residuos.-processing which may lack economic value.
credit to: Mr. Jose Luis Hernández Cabrera
Source: www.gestiopolis.com/finanzas-contaduria/elementos-de-un-proyecto-de-inversion.htm
image source: www.judgelloydassociates.com/sitebuildercontent/sitebuilderpictures/architect75_plans.jpg
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