Banking Exam Question - What is Project Formulation? What are it's Various Stages & Techniques of Project Formulation? Explain

• FEMMTE, Analysis

F = Financial analysis
E = Economic analysis
M = Marketing  analysis
M = Managerial analysis
T = Technical analysis
E = Environment analysis

Project formulation & Various Stages of Project Formulation

Project formulation is a concise, exact statement of a project to set the boundaries or limits of work to be performed by the project. It is a formal document that gives a distinctive identity of the project and precise meaning of a project work to prevent conflict, confusion or overlap. 

Project formulation can be also defined as one of the stages in the life-cycle of a project. The formulation stage is also called initiation, conceptualization, definition, pre-project. Concept development is the preliminary stage as first stage of the project. To implement the activities of the project, various techniques can be applied. This stage aims to:

1. Carefully identity and weight various components of project work
2. Analyze project feasibility and cost effectiveness.
3. Examine and approve project inputs and outputs.
4. Identity stakeholders and their involvement and contribution.
5. Define benefits and expectations.
6. Estimate resources needed.
7. Perform a preliminary analysis of risks.
8. Make an outline of project schedule.
9. Estimation of demand and benefits.
10. Evaluation of the technology.
11. Sustainability and environmental impact.
12. Estimation of costs an income.
13. Financing the investment.
14. Organization and investment management.
15. Evaluation and preparation of recommendations.
16. Preparation for the investment.