Engineering economy lorie m. Cabanayan francisco d. Cuaresma

Technical Study 
This aspect identifies whether the project could be produced at the highest possible quantity 
level with a minimum cost. In a manufacturing firm, the items that are taken into consideration are 
the product itself, the manufacturing process, plant size and production schedule, machinery, plant 
location and layout, structure, raw materials, utilities, waste disposal and other information deemed 
necessary in determining technical feasibility. 
The composition of the product specifically relating to physical, mechanical and chemical 
properties is described. This also includes the use of the product. 
A very important item in the technical study is the manufacturing process, where the 
detailed flow-charts indicating materials and energy requirement at each step, and the normal 
duration of the process are taken into account. In addition, the processes used by the competitors 
and the process o a combination of processes to be adopted are looked into. 
The production capacity of the plant, the number of days the project shall operate per year, 
the factors determining the plant size and the unexpected attainable yearly production are 
considered. 
Another relevant information of the machinery number, specification, rated capacities of 
major mac
hinery‟s, prices of equipment, and balancing of capacities of each major and auxiliary 
equipment, availability of spare parts and repair services, including the quotation from suppliers, 
machinery guarantees, delivery, terms of payments and other arrangements. 
Plant location and layout should likewise be considered and studied. Here, it is determined 
whether the location is desirable in terms of distance to source of raw materials and markets and the 
other factors. The effect of layout in materials flow and treatment of materials handling and storage 
including provisions of expansion are taken up. Corollary to this, are the structures to be constructed 
or rented including the improvements to be done such as roads, drainage facilities and their 
respective costs. 

---

60 
Facts concerning raw materials are similarly significant. Raw materials are described 
specifically relating to their physical, mechanical, and chemical properties. Also considered are the 
alternative raw materials, availability, combination, current and prospective sources and costs. 
Finally, utilities and waste disposal are taken into account indicating specific utilities like 
electricity, fuel, water, supplies and their respective uses, quantity required, balances, availability of 
sources and costs.