Hi,
Its better to go for a overhead tank connected with a pump. Once the tank attains low level, pump should start and the same shall be stopped at high level.
Samayraj,
This is for protection of pump and not for fluctuating demand.
Chemical.Engineer,
Assuming that your pump is a centrifugal pump, you should always have a minimum flow recycle from the pump discharge. When your demand (forward flow) reduces, the pump will recycle the flow to the suction side of the pump (preferably the suction tank). If there is a restriction orifice or control valve in the recycle line sized for the minimum safe continuous flow the pump will be in operation all the time despite zero demand (forward flow). This means more energy costs due to continuous operation of pump. If energy costs are not an issue this scheme will work fine without any problems for the pump.
If you are really looking to operate the pump intermittently, only when there is demand (forward flow), and want to save energy the best option would be to provide a "dual hi-low pressure switch" on the discharge side of the pump. On high discharge pressure (no demand or no forward flow), the pump will trip and on low discharge pressure (demand or forward flow) the pump will start.
Hope this helps.
Regards,
Ankur.