In this paper some of the many relationships involved in comprehensive studies to determine the economic selection between alternative water supplies will be discussed. While these studies are complex and would require more space than is available to present completely, the paper will show the types of relationships and their importance in developing a water supply system. The need for data on the water demand for a service area is explained and the type of information required is discussed. The relationship between water deficiencies and the resultant economic loss is also presented. Several typical situations in which a desalter might be justifiably involved in a water supply and the utilization of its output are explained and illustrated analytically. The case where the desalter is the sole source of supply is selected to illustrate, by example, the type of optimization that can be accomplished. A procedure is programmed for computer solution to show the relationship between storage capacity and the desalting plant load factor. A model to determine optimum operation will be presented. A brief discussion of different types of storage facilities and of representative average cost of such storage facilities in California is presented in an Appendix.