Feasibility Study — definition
Structured assessment of the technical, commercial, financial and operational viability of a proposed industrial project before significant capital commitment is made.
Feasibility studies typically evaluate site conditions, process technology options, capacity, cost estimates, market demand and regulatory requirements. Findings often feed directly into a business case and inform the level of cost estimate accuracy used at each subsequent project stage.
Why it matters to industrial buyers
Investing modestly in feasibility work early reduces the risk of costly redesign, schedule overrun or outright project failure later in execution.
Key reference points
Typical cost
Feasibility studies commonly cost a small fraction, often around 1-5 percent, of estimated total project capital cost.
Commonly confused with
Business case
The feasibility study produces the technical and financial evidence; the business case packages that evidence for approval.
How it is used in practice
Before committing capital, a processor commissions a feasibility study comparing three site options for a new facility.
Frequently asked questions
Is a feasibility study mandatory?
It is not legally mandatory in most jurisdictions, but it is widely regarded as good practice before major capital commitment.
How long does a feasibility study take?
Duration varies with project complexity, commonly ranging from a few weeks to several months.
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Related terms
Business Case
Structured document that justifies a proposed capital investment by presenting its objectives, costs, benefits, risks and expected financial return to decision-makers.
Class 5 Cost Estimate
Earliest and least detailed AACE International cost estimate classification, typically accurate to a wide range and used for initial screening of concept-stage industrial projects.
Greenfield Project
Industrial development built on previously undeveloped land, requiring new site infrastructure, utilities, permits and construction rather than modification of an existing facility.
Production Capacity Planning
Process of forecasting demand and determining the equipment, staffing and facility capacity needed to meet it within a defined planning horizon.
Basic Engineering Design
Basic engineering design is the early project phase that establishes process flow, major equipment sizing, layout and technical specifications sufficient to define scope and budget.
Capacity Utilisation
Percentage of a facility's or line's maximum theoretical production capacity that is actually used over a given period, reflecting demand, scheduling and reliability constraints.
Contingency Budget
Reserve of funds set aside within a project budget to cover identified and unidentified risks, cost estimate uncertainty and unforeseen changes during execution.
Grant Funding
Non-repayable financial support provided by a government, multilateral body or other institution toward a project, typically awarded to advance defined policy or development objectives.
Greenhouse Project
Capital investment in a controlled or semi-controlled growing structure equipped with climate management, irrigation and, in advanced installations, supplemental lighting to enable year-round or off-season crop production.
Hydroponic System
Soilless crop production method that delivers nutrients directly to plant roots through a water-based solution, using media, film or aeroponic techniques within a controlled growing environment.
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Reference content only. Global B2B Group is independent of equipment manufacturers and financing institutions; definitions are provided for education and do not constitute engineering, financial or legal advice.