What is project life cycle?

Project Life Cycle
Life cycle of a project consists of the following three phases:-

1. The Pre-investment phase 
2. The Constructive Phase 
3. The Normalization Phase

1 The Pre-investment Phase:
This is the first stage of the life cycle of a project. This phase involves the following process:-
i. formulation of objectives
ii. forecasting of demand
iii. selection of optimal strategy
iv. evaluation of input characteristics
v. financial projections
vi. cost benefit analysis
vii. Pre-investment appraisal.
During this phase an idea will be formed as to how investment should be made to accomplish the objectives of the project.

2. The Construction Phase
This is the second stage of the life cycle of the project. This stage involves the following process:-
a) Allocation of resources
b) Purchase of basic assets or establishment of necessary infrastructure facilities like purchase of land and building, plant and machinery, accommodation of ancillary units, installation of communication services, establishment of marketing organization etc. This stage is meant for development of infrastructure in a project which is a onetime affair in the life of the project.

3. The Normalization Phase:-
This is the third stage of the life cycle of the project. During this stage only, production of goods and services, using the infrastructure facilities created during the construction phase, will be ensured effectively. For this purpose, a provision has to be made for raw materials and other consumables. The requirement of raw materials and other consumables can be determined by analysing the production cycle of the project. During this process only, the assets created during the construction phase are put to use for achieving the objectives of the project.