Applying the make-or-buy decision process to sodium hypochlorite in water treatment plants

The water treatment plants are required to apply the 'make-or-buy' decision process to high-concentration commercial sodium hypochlorite solutions, due to the increased safety concerns associated with the storage of liquefied chlorine gas. The decision process involves calculating the life-cycle cost (LCC) of each alternative, as the alternative provide a lower cost solution over the products useful life. The make-or-buy decision process involves the determination of the evaluation period, interest, and inflation rates, determination of annual hypochlorite requirements, and determination of the capital cost of the make option. It is also required to calculate the LCC of the make option and obtain the unit cost of purchasing hypochlorite. The decision process also involves the creation of a cash flow table associated with the buy option and selection of the option with the lowest LCC.