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What Is a Completion Test?

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  • Written By: Malcolm Tatum
  • Edited By: Bronwyn Harris
  • Last Modified Date: 08 November 2016
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    Conjecture Corporation
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A completion test is a type of evaluation process that seeks to determine if a given project is truly a success. This is usually accomplished by identifying specific criteria that the project must meet in order to reach the define goals for the effort. When the results of the test indicate that the project is not in compliance with the stated goals and aims outlined at the beginning of the effort, there is a good chance that the project will either be reworked extensively or even abandoned in favor of a project that shows more promise.

One of the first phases of the completion test is to determine how well the project has met the specifications for the original structuring and launch. While some specifics of the structure may be refined during the forward movement of the project, the idea is to make sure that, over time, the original focus has not been lost. If the design is found to still be relevant to those original goals, then the first phase is considered successfully completed and further evaluation of the project can commence.

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After confirming the design specifications are in order, the next phase of the compliance test will often focus on the level of performance achieved by the project. This involves ascertaining if each cycle within the process of the project is producing the desired results. For example, if the project involves the successful production of 1,000 widgets each eight-hour period of a business day and the production is actually at 1,200 widgets per eight-hour period, then the project is not only in compliance but is exceeding expectations.

One other key element of the completion test is to determine if the cash flow anticipated from the project is living up to the original goals. At this juncture, the idea is to determine whether or not the project is progressing toward or has already reached a point of generating the anticipated returns envisioned at the onset of the effort. This means that if the goal was to be selling 30,000 widgets per month after the project had been in operation for five months, and the current sales volume is at 31,000 units for that fifth month, then the results of the completion test indicate the project is truly successful and is worthy of continuing as is. Assuming that the completion test indicates that the project has been successful, the launch can be considered complete and the funding for the effort can move from recourse or temporary financing to permanent or non-recourse financing.

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