As of February 2016, AquaSafi assembled water purification machines at its head office in Hubli, Karnataka. The company then entered into partnerships with village leaders and NGOs to operate its plants in various villages. AquaSafi provided the water purification technology at cost to the villages and NGOs, and the plants were then operated either by village residents or by operators who were hired by the NGOs. AquaSafi's main NGO partner was the Shri Kshethra Dharmasthala Rural Development Project (SKDRDP).

Once a plant was in operation, AquaSafi was contracted to provide technical support and maintenance for the plant's equipment. These contracts constituted AquaSafi's main source of revenue, generating a monthly income of3,250 per plant. This price was fixed, regardless of the amount of water filtered and sold. AquaSafi extended credit terms of 45 days to the villages.

The villages and NGOs used their water sales12to pay for the plant's utilities, the plant operator salaries, the maintenance fees charged by AquaSafi, and all other plant costs. The remaining profits remained with the villages or the NGO, and SKDRDP often used these funds to provide microfinance loans13to the villagers.

The villages and NGOs often had to purchase replacement components from AquaSafi in order to keep their plant equipment in working order. These component sales, equal to 10 per cent of the monthly maintenance charges, offered an additional source of revenue for the company. AquaSafi earned a 10 per cent margin on component sales and maintained 30 days' worth of components in inventory at all times.

AquaSafi employees provided plant maintenance. Each employee serviced 10 of AquaSafi's plants monthly and was paid20,000 at the end of every month. Other related technical support and maintenance costs were fixed at1,000 a month and were paid promptly.

AquaSafi's current operating model was working well, but under this operating model, the NGOs handled the hiring of plant operators and day-to-day operations; AquaSafi was contacted to provide plant maintenance only. Thus, AquaSafi gave up control of the plants' operations and depended on the NGOs to manage the water purification technology. By altering the current operating model, Pankajan thought there was some potential to increase AquaSafi's profits.

How would I make a differential analysis for a new water filtration plant under the current operating model