Is it true that the Return on Investment (ROI) for a PSA Medical Oxygen Generator can be less than one year? Let’s explore the answer.
This is an important question for hospitals and healthcare facilities looking to reduce costs and improve efficiency. In this article, we will explore whether this statement holds true by calculating the ROI of a PSA Medical Oxygen Plant compared to using liquid medical oxygen or medical oxygen cylinders.
Table of Contents
- 1 Factors Influencing ROI Calculation
- 2 PSA Medical Oxygen Plant vs. Medical Oxygen Cylinders
- 3 Table 1.0 :- ROI Calculation Table (PSA Oxygen Plant vs. Medical Oxygen Cylinders)
- 4 PSA Medical Oxygen Plant Versus Liquid Medical Oxygen
- 5 Table 1.1 :- ROI Calculation Table (PSA Oxygen Plant vs. Liquid Oxygen)
- 6 Conclusion
Factors Influencing ROI Calculation
To calculate the ROI of a PSA Medical Oxygen Generator, several key inputs must be considered. These inputs will help determine whether investing in a PSA Oxygen plant can yield significant financial benefits for healthcare facilities.
- Quantity of liquid Medical Oxygen required per day or number of Medical Oxygen Cylinders used per day: Understanding the daily oxygen requirement is crucial. This input provides a basis for comparing the cost of producing oxygen on-site versus purchasing cylinders or liquid oxygen.
- Cost of liquid Medical Oxygen per unit or cost of one Medical Oxygen cylinder: The price of oxygen, whether in cylinder or liquid form, can vary widely depending on the supplier, region, and market conditions. This cost factor plays a significant role in determining ROI.
- Additional expenses like transportation or rental of Liquid Medical Oxygen or Medical Oxygen cylinders: Transportation costs for delivering liquid oxygen or cylinders can add up over time, as can rental fees for tanks or storage systems.
- Electricity cost per unit: Transportation costs for delivering liquid oxygen or cylinders can add up over time, as can rental fees for tanks or storage systems.
- Capital investment of PSA Medical Oxygen plant: This includes the initial cost of purchasing and installing the PSA Oxygen generator, compressors, and related infrastructure.
- Total maintenance expenses in 10 years: Like any machinery, a PSA Oxygen generator requires regular maintenance. Estimating the total maintenance costs over the plant’s lifespan helps to accurately calculate long-term savings.
- Working hours per day: The number of hours the PSA plant operates daily affects electricity consumption and output. This input is critical for determining operational efficiency.
PSA Medical Oxygen Plant vs. Medical Oxygen Cylinders
Let’s take a real-world example by comparing the ROI for a hospital using medical oxygen cylinders versus a PSA Medical Oxygen Plant.
Assumptions:
- Cost of a medical oxygen cylinder: ₹300
- Cost of electricity: ₹8 per unit
- Medical oxygen cylinders used per day: 40
- Cost of the PSA Medical Oxygen Plant: ₹30,00,000
- Working hours per day: 24 hours
Based on these assumptions, let’s calculate the ROI.
Table 1.0 :- ROI Calculation Table (PSA Oxygen Plant vs. Medical Oxygen Cylinders)
As calculated above, the ROI for a PSA Medical Oxygen Plant compared to Oxygen cylinders is less than one year. However, Variations in the cost of electricity & cylinder prices will play an important role in determining the ROI
PSA Medical Oxygen Plant Versus Liquid Medical Oxygen
Now, let’s compare the same hospital using liquid medical oxygen instead of cylinders. The assumptions for liquid oxygen are:
- Cost of liquid medical oxygen per Nm³: ₹25
- Cost of electricity: ₹8 per unit
- Liquid oxygen used per day: 325 liters
- Cost of PSA Medical Oxygen Plant: ₹30,00,000
- Working hours per day: 24 hours
Table 1.1 :- ROI Calculation Table (PSA Oxygen Plant vs. Liquid Oxygen)
In this example, the ROI for a PSA Medical Oxygen Plant compared to liquid medical oxygen is approximately 1.8 years, or less than 22 months. This further demonstrates why many hospitals are making the switch to PSA Medical Oxygen Plants instead of relying on cylinders or liquid oxygen.
Conclusion
In conclusion, investing in a PSA Medical Oxygen Generator can provide significant cost savings for hospitals and healthcare facilities when compared to using liquid medical oxygen or oxygen cylinders. By calculating the ROI based on daily oxygen consumption, electricity costs, and initial capital investment, it’s clear that a PSA plant can deliver a return in less than one year when replacing oxygen cylinders, and in just under two years when replacing liquid oxygen. Over the long term, the savings in operational costs make PSA Medical Oxygen Plants a financially and operationally sound investment, ensuring reliable, cost-effective oxygen supply while enhancing overall efficiency.
Whether you’re planning to upgrade your Medical Oxygen supply system or just need advice, do remember that we’re always here to help. Please feel free to get in touch with us through either our toll-free number 1800 3010 3394 or email us at info@absstem.com.
