By Frederick L. Harrison, Dennis Lock
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4 Build all the processing plant to produce refined copper at the mine. 5 Build not only the basic processing plant at the mine, but also include plant and machinery to produce semi-finished or finished product (such as copper wire or rods). A large international company, with mines and processing plants in many different countries, would probably be able to identify and consider many different business strategies for dealing with newly discovered ore deposits. When each of these different strategies is analysed in depth it is clear that each of them will result in a different business case.
Consider, for instance, a company compelled to spend £500000 on building improvements ordered by the local authority for reasons of health and safety or fire regulations. Although that project must be carried out for no direct financial return, failure to authorize the work could result in successful legal action to close the company down. So, a project feasibility study is a mix of careful investigation and definition, consideration of different strategic options, risk appraisal and, usually, an appraisal of the financial outcome.
Thenceforth the specification becomes known as the purchase specification. 28 Advanced Project Management The purchase order and specification will set out not only the technical and commercial requirements, but will also give details of packaging standards, pack marking and delivery arrangements. A binding contract will exist once an order has been issued and accepted by the supplier. Once the order has been committed it will be too late to rectify any spending over budget. Cost control can only be exercised before this stage: afterwards it will be too late.
Advanced Project Management: A Structured Approach by Frederick L. Harrison, Dennis Lock