Time-Capacity Expansion of Waste Treatment Systems

by Thomas M. Rachford,
Russell F. Scarato,
George Tchobanoglous,

Serial Information: Journal of the Sanitary Engineering Division, 1969, Vol. 95, Issue 6, Pg. 1063-1078

Document Type: Journal Paper


A minimum cost method is developed for quantifying the opposing cost factors of economies-of-scale and the time cost of money as they jointly affect optimal capital investment decisions for the expansion of wastewater treatment systems. For a linear demand growth rate, optimal facility expansion, with regard to both timing and capacity requirements, is determined using a mathematical model. The economic implications of different expansion policies are graphed for various interest rates and scalar cost effects, using cost data mathematically formulated as a function of system capacity. The model is used to demonstrate that the optimal timing of facility expansion is a function of the time cost of money and the economy-of-scale characteristics of that facility, and is independent of the absolute capacity of the facility. Further, additional economies inherent in individually expanding separable components of a wastewater treatment system are quantified by the model.

Subject Headings: Waste treatment | Facility expansion | Economic factors | Wastewater treatment | Mathematical models | Assets | Investments | Linear functions

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