AWWA ACE91146

This paper introduces production costing and illustrates how it can be used in the evaluation of water conservation projects or alternative supplies. Production cost models are useful tools to evaluate supply- and demand-side alternatives. The model calculates the costs incurred in producing a water supply to meet forecasted loads. Comparisons between conventional and alternative resources can be completed with the aid of a production cost model tailored to a utility's unique situation. Finally, the use of a production cost model for scenario planning helps to address uncertainty about the future. Comparisons of production costing results for the scenarios are valuable in the creation of robust water utility plans. This paper covers a description of the planning process for production costing, a detailed outline of what a production cost model contains, and a simplified example that demonstrates how a production cost model can be used. A number of tables show a seven-year simplified production costing model under various conditions.