WRT333: Notes

Feasibility Study

 

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A feasibility study is a formal report that documents decisions concluding in a choice of one from two or more alternatives. It establishes possibilities, evaluates economics, and forces reflections on the perceptions of a decision (social, political). It begins, of course, with a consideration of the audience that will read the study and your purpose in writing to that audience, as always.

The feasibility study is an important tool in engineering and management because it formalizes much of the openness of a brainstorming process (it forces you to think of novel solutions), and it encourages you to think in quantifiable terms about real dimensions to the problem you are trying to solve. The phrase "systems approach," used below, refers to a number of steps, taken as part of a formal study, that begin with problem definition (via a feasibility study) and progress through modeling, selection and construction of a single solution, and follow-up evaluation of the real-world system.

In the feasibility study, the problem is carefully described, and one or more potential solutions to the problem are considered in some depth. Later decisions about what particular steps to take to actually effect a solution are based upon the results of the feasibility study. Often, the feasibility study -- in the form of a grant proposal or an impact assessment statement -- provides the basis for action by funding agencies. A well done feasibility study should tell its author whether further action is desirable, and should be able to convince others as well. This section outlines several essential features of a feasibility study and explains why they are important.

Needs analysis. Of the several steps in the systems approach, this is one of the most critical. This step establishes the reasons for the system, and indeed is essential in determining whether changes in the management of an existing system or the design of a new system are warranted. That is, it is a statement of what is or is not working in an existing system, describing hoped-for improvements (e.g., lower costs, better products or services). Needs analysis also clarifies quantifiable standards to be used to measure options, including measures of minimal needs (requirements) and additional desired wants (preferences).

Hall (1962) outlines steps to be considered in the conduct of "needs research," and serious students are urged to study these in greater detail.

 

"Before a new system is developed, exploratory study must reveal that it is needed. Any claim for urgency must be supported by factual evidence. The process of determining the absolute value of the need in terms of all its component factors, the value relative to other needs, and the particular system properties wanted, is called needs research."

 

Initially, needs may be expressed in non-specific terms, creating a blurry image of what it is the future users of the system would have it do. Such primitive needs may be clarified somewhat through techniques developed in marketing or economic texts, providing there is a sufficiently clear economic aspect to the problem allowing questions to be couched in terms of what people might be willing to pay for various alterations in system behavior. For example, appropriate government investment in anti-pollution technologies might begin with an assessment of how much additional tax burden a polled sampling of people would be willing to bear to eliminate the source of contamination. However, in many ecological problems, there is no useful conversion established to permit transposing of aesthetic values, health concerns in the face of uncertainty about cause and effect relationships, energy costs, etc., into simple economic equivalents useful for weighing value or establishing need. This is a fundamental weakness in contemporary economics, one dealt with briefly (see A Note on Value Judgments, below).

Needs analysis should aim for a specific statement answering simple questions. What is it the system should do? For whom? How will changes in system design or management meet existing needs more effectively (i.e. lower cost, reduced energy or material demand, greater safety, less impact on the environment)? For the ecologist involved in assessing the impact of technological developments or regional economic plans, expression of needs will focus on the crucial questions, what should the system look like in its most desirable form? and, alternatively, what do we not want the system to become?

Needs analysis must consider all potential users of the system, including people and institutions, managers, administrators, maintainors, distributors if goods or services are involved, and users of goods and services. If the system requires continual decisions to regulate performance, interactions with decision makers must also be considered.

System identification (options). From an initial list of needs to be met by the system, a more specific statement of ways to meet the needs must be drawn up. In most cases it is wise to suppress the human tendency to adhere tightly to what already is. Insight can be lost by overemphasizing any particular system during this phase. Rather, the general characteristics of any and all systems that can meet determined needs are to be sought (Manetsch and Park 1980). "At this stage the emphasis is on searching, which is synthetical in nature, not on screening, which is analytical in nature," advises Hall (1962). Clearly this requires personal qualities of openness of thought, good judgment, and creativity, characteristics specified by Hall (1962) in defining the "ideal systems engineer."

 

"First comes the faculty of judgment, of sound appraisal with complete objectivity. This quality is to some extent antithetical to imagination, so the systems engineer must be able to subordinate, at will, synthesis to analysis and vice versa. "Second, creativity is so vital a part of the systems engineering process that a vigorous imagination is essential. There is some evidence that this trait is trainable...but there is also evidence that basic creative potential has limitations determined by birth and childhood environment."

 

Because the system identification process involves a necessary and dynamic mixture of free thinking ("brainstorming") and sober practicality, it can be both a refreshing and an exhausting phase. In assembling research teams, individuals with contrasting personalities ("dreamers" vs. "realists," or "left-brain" vs. "right-brain" thinkers (Manetsch 1983)) may therefore become a major asset at this point.

Briefly, we seek a description of any system capable of satisfying the list of needs developed above (Needs Analysis). Note that here we begin developing a dichotomy between System and Environment, including in our description of system(s) only those things necessary to meet specified needs. In this sense, the goal orientation of the systems approach is quite apparent during the system identification process.

Information is sought about the system under 3 general categories:

  1. System input variables are of two types. Exogenous (or environmental) inputs affect the system but are not affected by it. Weather or geologic factors are exogenous to most ecosystems. Overt inputs are necessary for the system to carry out its function (i.e. to meet needs). Overt inputs may be further categorized as useful or not useful in effecting control of the system. For example, fertilizer is a key variable controlling the productivity of an agricultural ecosystem. On the other hand, a weather tight barn may also be essential to productivity (sheltering the cows and keeping the hay from rotting) but are not normally very influential in altering the behavior of the farm system.
  2. System outputs are likewise of two types, desired and undesired. The former are those which meet needs. The latter are unavoidable by-products. Undesired outputs may be biological, physical, social, economic, moral, etc. Churchman (1968) argues that too narrow a view of system outputs may lead to bad results. For example, "the argument is that concentration on efficiency per se may be a very inefficient way to manage a system, from the overall point of view." Indeed, in keeping with the systems approach, any one-dimensional approach to defining systems outputs (i.e., economy, labor efficiency, yield) is counter to the fundamental intent of systems science. Unfortunately, a great many of the undesired outputs of human activity in the 20th century involve lack of identifiable cause-and-effect linkages, so that adverse effects of technological activities may not be detected until long after major system changes have been implemented.
  3. System design parameters involve measures used to quantify the capabilities of the existing system to behave as desired or to respond to anticipated changes in management strategy. These include fixed biological attributes (e.g. growth potential of a population, rate at which an organism can metabolize its food, etc.) and physical capacities of the environment (e.g., the size of an aquifer).

The problem of buying a house illustrates the needs analysis and system identification stages.

 

Upon the birth of their second child, Bob and Janet decided that renting an apartment in a building largely populated by University undergraduates was no longer appropriate for them. They began the process of buying a new house with a primitive realization, "We don't fit in to College Acres anymore!" Because they liked the area where they lived, and felt they would probably remain there for many years, they began exploring the alternatives to apartment living. To establish an initial list of things they wanted in living accommodations, they decided that proximity to Janet's job, ability to accumulate equity for the future, space to plant a large garden, and conditions good for raising children were very important. And, because their current apartment offered none of these attributes, staying where they were was listed as an initially undesirable option, and Bob and Janet were able to agree that they needed to move.

In further specifying just what it was that they wanted in a new place, Bob and Janet considered space [bedrooms for two kids, a shared study, a shop area for Bob, a greenhouse or sunporch for Janet], location [neighborhood schools, status, resale value], and cost as important variables. They agreed that other apartments, mobile homes, and condominiums would not satisfy their specifications, and that they should look for a single family residence.

 

Problem formulation. Within the constraints of the system as is, or within the bounds of anticipated limits on design of new systems, there are a limited number of ways in which identified needs may be met. These ways, and the steps they imply will be taken in the future, must be explicitly stated, and this is the function of a problem formulation. If it is possible, the problem formulation will include details of specific behaviors the system should exhibit, including numerical characterizations if possible. The problem formulation would establish how various inputs would be provided, how undesired outputs would be avoided, etc., as well as listing any additional constraints to be met in the operation of the system.

 

Bob and Janet decided that they would look for a house within 10 miles of Janet's job, and that only one of several possible school districts was unacceptable. Taking a conservative estimate of joint incomes for the next five years, they felt that an initial cost of $125,000 was all they could afford. They also agreed to consider building their own home in a new development that had recently begun to sell house lots. Without strong feelings about styles and age of the house, Bob and Janet agreed to remain flexible in looking at bedrooms, living areas, etc., but Bob insisted that he wanted a shop area at of at least 150 square feet. They also agreed that any existing house might not have to have a sun porch or greenhouse, because Bob was sufficiently skilled as a carpenter that he could build such an addition for Janet in the near future. In considering the needs of the children, they agreed that priority would be given to neighborhoods with children of similar ages. Bob also held several talks with his friend Ray, the local city planner, to make sure that he would avoid choosing areas near proposed new shopping malls and highways.

 

Generation of System Alternatives. Once a complete statement of the problem has been made, various ways of solving the problem are defined. Here again there is a need for a broad approach, focusing on exploration of as many possible solutions as can be formulated. Creativity at this point is also essential. For example, there is a tendency in planning transportation projects to think initially of designing the network of roads, etc., to fit the existing pattern of residences and current traffic flow. However, many planners now realize that one way to design new roadways is to first consider where future developments of residential and industrial centers would be best. By creating a high quality system of roads and rails, developers are encouraged to locate near the best transportation infrastructure, following the same principles which led early pioneers to settle along major river systems. Here, transportation planners are not linking two points, they are creating a link and allowing the points to move!

Difficulty in formulating precise statements of viable system alternatives may point to inadequacies in the statement of needs or in the system identification phase. As suggested by Hall (1962),

 

"Most frequently ... problems arise from questions no one asked, or from answers no one sought. These "sins of omission" probably arise more often when a new system with increased function is under study; i.e., when something really new is being tried for the first time. When a functionally old system is being redesigned for better performance, lower costs, or increased salability, the management and project leaders will be more attuned to the pitfalls."

Bob and Janet had to choose between moving to an existing old house, finding a new house already built, or arranging to have their own house built. They allowed themselves 6 weeks to evaluate existing houses, during which time they visited 5 realtors and looked at 36 different houses in 4 neighborhoods. Four places fit their previously identified needs. Janet, however, began to realize that a large family room, and a spacious kitchen were more important to her than she first realized. Bob also found himself very much concerned with the outside appearance of the house, and whether the neighbors seemed to share his enthusiasm for careful landscaping. As they discussed this, it seemed that only 2 places fit their redefined needs.

During the same period, they bought several periodicals advertising complete sets of house plans. They compared the ideas they saw with what was available, and began to feel a strong preference for a limited set of architectural styles. After consulting with a few friends from work, they contacted two local contractors to discuss the feasibility of having their own house built. It was soon obvious that the complete house of their dreams was somewhat beyond their current financial means. One of the contractors, however, suggested an alternative design, which would let them build a slightly more modest house, but one built with the intent of being expanded in the future to include a large family room and greenhouse, which Bob and Janet felt they could afford sometime in the not too distant future.

 

Determination of Physical, Social and Political Realizability. Alternatives capable of meeting perceived needs must be further scrutinized to see whether they are in fact practical.

Whether a new system can be built or an old system managed in a better way depends on a mixture of technological and social arrangements. Many of the most fundamental problems facing mankind in the foreseeable future have uncertainties of a technical nature casting shadows of doubt over our abilities to adequately cope. The question of supplying adequate energy to feed, shelter, and clothe a global population of an expected 10 to 12 billion depends in large part upon our ability to develop replacements to rapidly dwindling supplies of liquid fossil fuels (oil and natural gas). The technological future of nuclear fission, nuclear breeders, and nuclear fusion systems are recently in question: at the very least, growth projections for the nuclear industry have been radically altered by political response to questions of a technological nature.

Other equally important questions depend as much on non-technological solutions (i.e., They respond to Hardin's (1968) call for "fundamental extension in morality"). Solutions to problems of global pollution, competition for finite natural resources for widely differing end uses, and the population problem itself require innovation in social and political institutions. Some form of "mutual coercion mutually agreed upon," involving the majority of people affected by a problem, will be required to solve a score of ominous ecological problems. Ecologists practicing today may not long continue the luxury of practicing their science as though their concerns were isolated from the needs of mankind. There are too many practical reasons why this is true, as well as a wealth of moral ones.

Determination of Economic and Financial Feasibility. A final check on the likelihood that any system can become a reality involves two additional analyses. Is the system capable of economic sustainability? Is it profitable or sufficiently supported by social and political will that use of public or private funds will be justifiable? In the latter case, one must also determine whether adequate capital resources exist to finance a project, either through private or public sources.

Ecologist Kenneth Watt (1974) estimated the approximate costs for such needed projects as investment in new power plants, mass transit, water pollution treatment, air pollution control from cars and secondary sources, etc., and estimated an annual requirement approximately equal to half the investment made by all U.S. industry in new plant and equipment (1972 base). In general, in order to solve the problem of finding substitutes for liquid fossil fuels, major capital investment will have to be made to simultaneously replace national energy generating plants, most of the automobile dependent transportation system, much of the current physical plant for industry, and a significant portion of human settlements in both urban and suburban systems. Is the capital there? Is there adequate financing available to end acid rain, to curb contamination of drinking water supplies, to curtail ocean dumping, etc.? Increasingly, at least according to some analysts (e.g. Malabre 1987), the question of ability to finance government sponsored projects (which includes most support for work on ecological systems problems) has become a cause for considerable concern. It appears to Malabre and an increasing number of economists that one legacy of the Reagan economic "revolution" has been not only the unprecedented increase in the national per capita debt, but also the destruction of necessary capital to deal with vital future public works programs. This misallocation of capital -- as it will likely be labeled by future generations -- is an example of failure to maintain a sufficiently broad and long range perspective in assessing needs.

When complete, the feasibility phase of the systems approach provides a working statement that outlines a set of realizable options capable of meeting a specified set of needs. If none exist, the problem will remain as before, and the systems approach will be terminated until such a time as system design characteristics appear to have changed or until social, political, or economic barriers can be traversed.

A Note on Value Judgments: Throughout this and previous sections, I have stressed the importance of developing a clear understanding of goals, i.e., a statement of just what set of behaviors we want to see from the system in question, hopefully expressible in measurable terms. Three things need to be expanded upon in this regard. The first is that the effort to establish a goal orientation for a system does not imply that some direct benefit to man must be the objective. Surely human society is reaching a stage where we can now acknowledge that natural systems need to be left alone, or if necessary protected from human influence, so that the goal orientation of such a system might be assessed by traditional measures of, say, ecological stability over time, species diversity, etc., without any sort of flow of anything "useful" to people. In such a context, the goal orientation is valuable in delimiting system boundaries, i.e., in selecting among the available things in the system a discrete set to be used as state variables (explained in next section).

Second, we must recognize the need to rise above the one-dimensional dollar based measures of value currently stifling conventional economics. We need to alter somewhat our economic perceptions, in a fashion perhaps like that suggested by Madden (1986):

 

"While most economists make a preeminent value judgment in favor of what is often termed 'positive' as opposed to 'normative' economic analysis, the definitions underlying this choice are often fuzzy, if not untenable [see original for references]. The feature of positive economics most attractive to economists is (presumed) objectivity or value neutrality. 'Objective' decisions are more easily defended than 'subjective' ones -- hence objectivity is a source of security to the economist. Furthermore, the economist's clients typically expect objectivity -- an analysis of the effects that given means will have upon given ends.

"Friedman states that positive economics is in principle independent of any particular ethical position or normative judgments.... In short, positive economics is, or can be, an 'objective' science, in precisely the same sense as any of the physical sciences.' Normative economics is thought to deal with value judgments as to 'what ought to be,' while positive economics presumably deals with ''what is'."

 

Madden also quotes Daly (1980) in this regard:

 

"We absolutely must revise our economic thinking so that it will be more in conformity with the finite energy and resource limits of the earth, and with the finite limits of man's stomach. Standard economics confines its attention to the study of how best to allocate given means among given ends. It does not inquire very deeply into the nature of means or the nature of ends.... Our narrow economics is likely to commit the error of wishful thinking (assuming that just because something is desirable it must also be possible). Likewise, unless we inquire into the nature of ends and face the question of ultimate values, ethics, and the ranking of our ends, we are likely to commit the opposite error, that of technical determinism (assuming that just because something is possible it must also be desirable).
"Finally, we must learn to include more than present time in our procedures for establishing goals. Simply put, we need to develop a means whereby to factor in the values of future generations, to consider economic measures as they might be set by our children or later generations. Will the citizens of 2088, for example, understand why we squandered the last of the finite global reserves of liquid fossil fuels driving ourselves to work, 1 person per 3000 pound vehicle, or why we destroyed the ozone layer keeping our Big Macs warm?"

 

References

Churchman, C. W. 1968. The Systems Approach. Delacorte. 243. p.

Daly, H. E. 1980. Economics, Ecology, Ethics -- Essays Toward a Steady-state Economy. W.H. Freeman.

Hall, A. D. 1962. A Methodology for Systems Engineering. Van Nostrand. 478 p.

Hardin, G. 1968. The tragedy of the commons. Science 162: 1243-1248.

Koenig, H. E. 1976. Human Ecosystem Design and Management: A Sociocybernetic Approach. In Patten, B. C. Systems Analysis and Simulation in Ecology. Vol IV. Acad. Pr. 593 p.

Madden, P. 1986. Beyond Conventional Economics -- An Examination of the Values Implicit in the Neoclassical Economic Paradigm as Applied to the Evaluation of Agricultural Research. In Dahlberg, K. A. New Directions for Agriculture and Agricultural Research. Rowman and Allanheld. 436 p.

Malabre, A. L., Jr. 1987. Beyond Our Means. Random House. 175 p.

Manetsch, T. J. and G. L. Park. 1980. Systems Analysis and Simulation with Applications to Economic and Social Systems. Dept. Elect. Eng. and Systems Science, Michigan State University.

Watt, K. E. 1974. The Titanic Effect: Planning for the Unthinkable. Dutton, 268 p.