Feasibility Study and System Planning

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Questions and Answers

Which of the following is NOT a step in the feasibility study?

Implement the proposed system (correct)

Rank the alternatives

Prepare a system proposal

Develop system flowcharts

What is assessed during the technical feasibility phase?

The legal implications of the project

The existing technological resources (correct)

The availability of human resources

The budget constraints of the project

Which type of feasibility ensures the existing system can respond properly to new technological demands?

Technical feasibility (correct)

Operational feasibility

Legal feasibility

Economic feasibility

What should a feasibility study provide as an output?

A formal system proposal Signup and view all the answers

What is emphasized as a critical factor in the credibility of the feasibility study results?

Bias in judgment Signup and view all the answers

To determine technical feasibility, what question should be considered?

Is the existing technology sufficient? Signup and view all the answers

How are the candidate systems ranked in a feasibility study?

According to their performance and cost-effectiveness Signup and view all the answers

Which of the following best describes the term 'business case'?

The justification for a proposal based on organizational needs. Signup and view all the answers

What is the primary purpose of Systems Planning in the System Development Life Cycle?

To establish the business case for a proposal and identify system requirements. Signup and view all the answers

What is Strategic Planning primarily focused on?

Long-term organizational objectives and strategies. Signup and view all the answers

What preliminary analysis is part of strategic planning?

SWOT Analysis. Signup and view all the answers

During which phase are the objectives of the proposed system considered?

Systems Planning Phase. Signup and view all the answers

Which of the following is NOT a factor that system analysts need to consider when evaluating a system proposal?

Historical employee turnover rates. Signup and view all the answers

What is a common immediate IT need in an organization?

Fixing a logic problem during payroll. Signup and view all the answers

What should successful IT managers primarily engage in alongside daily maintenance?

Long-range strategic planning. Signup and view all the answers

What is the primary purpose of a system service request form?

To initiate information system projects within an organization Signup and view all the answers

Which of the following is NOT mentioned as a reason for a systems project?

Reduced operational costs Signup and view all the answers

In what scenario is immediate approval for a system request most likely required?

When the problem involves a mission-critical system Signup and view all the answers

Who typically examines a system service request for its approval?

The designated system analyst or a system review committee Signup and view all the answers

What may indicate that the current system does not fulfill performance requirements?

It is old and slow to respond to inquiries Signup and view all the answers

What does 'stronger controls' refer to in the context of systems requests?

Improved organizational policies and system checks Signup and view all the answers

What is a common trait of systems that generate insufficient information?

They fail to adapt to changing information needs Signup and view all the answers

Which method can be used to submit a system request to the IT department?

Via manual submission, email, or web-based download Signup and view all the answers

What is the primary purpose of reallocating resources from non-critical tasks?

To assist critical path elements during issues Signup and view all the answers

What is Slack Time in project management?

The amount of time a project can be delayed without affecting the overall timeline Signup and view all the answers

Which of the following is NOT a benefit of using PERT analysis?

Delaying critical path tasks Signup and view all the answers

What information is typically included inside the task box of a PERT chart?

Milestones, time to complete, earliest start and finish dates Signup and view all the answers

Which of the following is the first step in creating a PERT chart?

List your project milestones and tasks Signup and view all the answers

Why is understanding task dependencies important in project management?

To determine the earliest start date for tasks Signup and view all the answers

What does the critical path in a PERT chart indicate?

The sequence of tasks that directly impacts project completion Signup and view all the answers

What is one way PERT analysis aids team leaders?

By providing a visual basis to assess skills Signup and view all the answers

What is the formula to calculate the Net Economic Benefit?

Total Cost Reduction + Error Cost Reduction Signup and view all the answers

What does 'i' represent in the formula for Discount Rate?

Discount rate (or interest rate) Signup and view all the answers

Which term describes the financial analysis metrics that compare an investment's profitability?

ROI, NPV, and Payback Period Signup and view all the answers

How is Return on Investment (ROI) calculated?

(Profits - Initial Investment) / Initial Investment Signup and view all the answers

What does the Overall NPV represent?

NPV of All Benefits - NPV of All Costs Signup and view all the answers

When calculating the Present Value (PV) of Benefits, which formula is used?

Net Economic Benefits * Discount Factor Signup and view all the answers

What is a key purpose of the Cost-Benefit Analysis?

To assess risks of a project Signup and view all the answers

What is the role of the Discount Factor in the context of present value calculations?

To convert future cash flows to their present value Signup and view all the answers

Study Notes

### Feasibility Study

A feasibility study is an investigation into the viability of a proposed system.
Its aim is to assess problem scope, not provide solutions.
The output of a feasibility study often takes the form of a system proposal, which acts as a decision document.

Types of Feasibility Study

Technical feasibility assesses whether the proposed system can be supported by existing technology.
Operational feasibility examines whether the proposed system aligns with the company's operations, workflows, and existing resources.
Economic feasibility considers the financial viability of the proposed system, including cost-benefit analysis.

System Planning

Systems planning is the initial phase in the SDLC (System Development Life Cycle).
It involves identifying system requirements and assessing if the proposal presents a strong business case.
A business case is a justification for a proposal, outlining the rationale for investing in a new or enhanced system.

Strategic Planning

Strategic planning is the process of identifying long-term organizational objectives, strategies, and resources.
SWOT analysis (Strengths, Weaknesses, Opportunities, Threats) is a fundamental tool for assessing potential systems.
System requests are initiated through forms, either manually or electronically.
System requests are reviewed by analysts or committees to prioritize them and determine if they warrant further investigation.

Reasons for System Requests

Improved services: This refers to enhancing customer, supplier, or internal user experience.
Better performance: This addresses issues like system slowness, limited flexibility, or inadequate capacity to support growth.
More Information: This addresses the need for more comprehensive or detailed information.
Stronger controls: This relates to improving the security and efficiency of data management.

PERT Chart

PERT (Program Evaluation and Review Technique) is a project management tool used to plan, schedule, and track complex tasks.
Each task is represented as a node connected by arrows indicating dependencies.
The critical path is the longest sequence of dependent tasks, determining the overall project duration.
ESD (Earliest Start Date) is the earliest possible time to start a task based on dependencies.
EFD (Earliest Finish Date) is the earliest possible time to complete a task based on its duration and ESD.

Cost-Benefit Analysis

This analysis quantifies the financial benefits and costs associated with a proposed system project.
Key metrics used include:
- NPV (Net Present Value): Determines the present value of future cash flows, including the investment costs.
- ROI (Return on Investment): Calculates the percentage return on the investment over time.
- Payback Period: Determines how long it takes for the investment to generate enough returns to cover the initial cost.

ROI (Return on Investment)

Represents the percentage return generated from an investment over a given period.
Calculated by dividing the profit from the investment by the initial investment cost.
Used to compare investment options and make informed decisions based on expected returns.

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Description

This quiz covers the fundamentals of feasibility studies, including technical, operational, and economic feasibility types. It also introduces systems planning within the System Development Life Cycle (SDLC), discussing the importance of aligning proposals with business goals. Test your knowledge on these essential concepts in system development.