June 2002

Columns

HP Water Management: Analyze the economics of a capital improvement

Manufacturing cost-reduction efforts increase during weak markets. Utility systems are typical candidates for cost savings. In general, these projects involve some amount of capital inv..

Huchler, L. A., MarTech Systems, Inc.

Manufacturing cost-reduction efforts increase during weak markets. Utility systems are typical candidates for cost savings. In general, these projects involve some amount of capital investment for process redesign. However, just describing the cost savings of a project ignores the initial cost for the capital improvement. Economic analysis of utilities projects can range from simple to complex. The simplest analysis compares the installation, equipment and operating costs with cost savings. More realistic economic analyses include a comparison of alternative uses for these funds, depreciation, inflation and the value of mo

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