The present study is an effort to examine a technique for evaluating the expenses associated with the production of biodiesel from waste dairy scum oil in Pakistan, to create an economic assessment of this option. A survey was conducted on ten dairies in Gujrat to encourage them participation in the biodiesel supply chain. The survey aimed to collect data on waste dairy scum creation, disposal methods and quantity, as well as purchase cost. The waste dairy scum oil was extracted by solvent extraction method. Acetone solvent has been used to extract the waste dairy scum oil. A two-step acid treatment was done to reduce the FFA value of WDSO from 4.6 to 0.98 mg KOH/g. The independent variables of the transesterification process parameters including catalyst concentration, methanol to oil ratio, temperature, speed, and reaction time were kept 0.25 w/w, 8.50:1, 57.50℃, 600 rpm, and 1h respectively. The maximum biodiesel yield at these operating parameters was observed 93%. The economic feasibility of the conversion of WDSO into biodiesel was assessed using the information obtained from the surveys conducted by the different dairy’s owners. Approximately 70% of diaries produced scum and wanted to convert this waste dairy scum into biodiesel. The net biodiesel production cost was found to be 171 rupees. The logistic cost of biodiesel produced from the WDSO was found to be 22 rupees. The overall cost of 1L biodiesel would be 193 rupees. A two-way sensitivity analysis was performed to determine the profit of the conversion of the WDSO into biodiesel. The environmental analysis revealed that the emissions like CO, HC, and NOx significantly reduced during the combustion of biodiesel as compared to conventional diesel.