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Neha Tikoo, Lovely Professional University Unit 2: Project Analysis and Selection

Unit 2: Project Analysis and Selection Notes

CONTENTS
Objectives
Introduction
2.1 Project Initiation & Resource Allocation

2.2 Resource Allocation
2.3 Why is Resource Allocation needed?
2.4 Market Analysis and Demand Analysis
2.5 Criteria for a Good Forecasting Method
2.6 Technical Analysis
2.7 Material Inputs and Utilities

2.8 Basis of Government Regulatory Framework
2.9 Summary
2.10 Keywords
2.11 Review Questions
2.12 Further Readings

Objectives

After studying this unit, you will be able to:
Know about project initiation and resource allocation;
Understand market analysis and demand analysis;

Know about the technical analysis.
Introduction

A project should earn sufficient return on the investment. The very idea of promoting a project
by an entrepreneur is to earn attractive returns on investment on the project. Projects sponsored/
undertaken by Government may take into account social cost benefits of the proposed project
and in such cases, financial return alone needs not be the criterion. But for such Government
projects, all other projects have the prime motive of getting maximum return on investment. If
there are many alternative projects, all of which, prima facie, appear to be more or less equal in
profit earning capacity, the investor should make a comparative study of the return on the
different alternative proposals before choosing one.

2.1 Project Initiation & Resource Allocation

The purpose of Project Initiation is to begin to define the overall parameters of a project and
establish the appropriate project management and quality environment required to complete
the project.

Development of the Project Charter is a pivotal starting point for the project, establishing the
project definition that will serve as the foundation for all future efforts. The completion of this

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