5 5 PROJECT LIFE CYCLE Three Stages in

5. 5. PROJECT LIFE CYCLE

Three Stages in Project Life Cycle • 1. The Pre-investment Phase • 2. The Construction Phase • 3. The Normalisation Phase

• 1. Pre Investment Stage • First phase in the life of the project • Concerned with objective formulation, demand forecasting, selection of optimal strategy, evaluation of input characteristics, projections of the financial profile, cost-benefit analysis and pre-investment appraisal. • During this phase project idea is developed into an investment proposition.

• 2. The construction phase • After investment decision this phase begins • Consists of developing the infrastructure for the project • Resources are invested during the phase in building the basic assets of the project • Assets may be land buildings, plant and machinery, ancillary accommodation, communication services , control systems and marketing organization • Developing necessary manpower resources also comes under this phase.

3. The Normalisation Phase After trial run of the project framework Involves routine procedure performed in a cyclical order Production of goods and services takes place Provision has to be made for raw materials and other resources required for production • Determined by the analysis of process and sequence of process operation • The assets created during construction phase are utilised • Proper utilisation is required to achieve the objectives • • •